Brent crude fell below $92 per barrel and West Texas Intermediate (WTI) crude dropped below $86. This significant decrease in oil prices occurred following reports about a reduced likelihood of U.S. military action against Iran. According to information, the U.S. may allow Iran to continue uranium enrichment at a level close to 4%, and Iran seems to be inclined to accept this proposal. However, neither party has officially confirmed these reports so far.
Impact of Houthi Attacks on the Oil Market
Meanwhile, Houthi attacks on Saudi Arabia's energy infrastructure continue. In the latest incident, the country's East-to-West pipeline was targeted again, and according to an official from the Saudi Ministry of Energy, this attack caused a limited fire that was quickly contained and extinguished. Attacks on tankers in the Strait of Hormuz have also continued this week, but oil market traders have not reacted significantly to these developments.
Read more: Gasoline consumption management in Iran has reached a negative growth of 2%
Increased OPEC Production and Downward Pressure on Oil Prices
Increased OPEC production is another factor exerting downward pressure on the oil market. According to a Reuters survey, OPEC members' oil production in October reached 22.87 million barrels per day, indicating an increase of 1.38 million barrels compared to the previous month. Despite this increase, the production level remains below the average of 25.48 million barrels per day in February, but the gap between these two figures is narrowing.
OPEC+ had promised to increase oil production at the beginning of this year, but the war in Iran has complicated the implementation of this plan. OPEC+ member countries subject to the production quota agreement produced about 25 million barrels of oil per day in August, while their total targeted quota was 31.01 million barrels per day. This group has also decided to maintain the oil production quotas unchanged for October and November.
Read more: Attack on the Kinef refinery in Russia and the resulting fire · Brent crude oil price reached $92 per barrel
