Crude oil prices significantly decreased following the decision of G7 member countries to withdraw from strategic oil reserves. On Monday (October 5), the price of North Sea Brent crude oil reached $101.59 per barrel, indicating a decrease of 72 cents or 0.71 percent.
Decline in WTI Oil Prices
Additionally, the price of American WTI crude oil fell by $1.05, reaching $90.05 per barrel. This price drop occurred after G7 member countries agreed on Friday (October 1) to withdraw 100 million barrels of diesel and crude oil from strategic reserves. This decision directly impacted prices and erased much of the growth in Brent oil prices from the previous week.
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Impact of Reserve Release
Shipping data shows that the release of reserves has contributed to an increase in oil supply in the market. The price of diesel on the International Commodity Exchange (ICE) in London also rose by more than 2 percent to $1,390.25 per barrel. Tim Waterer, a senior analyst at KCM Trade, stated that the G7's decision to use strategic reserves has alleviated some supply concerns. However, the risk of further damage to energy infrastructure in the Gulf region still exists.
Meanwhile, Saudi Aramco unexpectedly lowered the selling price of crude oil to Asian customers for November to the lowest level in six years. Analysts at ING Bank noted in a memo that due to ongoing geopolitical tensions, Brent oil prices will remain above $100 per barrel.
Two informed sources reported that following disruptions in the implementation of capacity expansion projects in the Middle East and ambiguity in future production capacity estimates, the OPEC coalition and its allies decided to postpone the review of member oil production quotas for 2027. This situation will clearly impact the oil market.
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