Oil prices moved lower in Asian trading on Monday as rising Middle East crude exports and a planned release of emergency oil reserves by Group of Seven nations eased some immediate supply concerns.
However, ongoing geopolitical tensions across the region limited the decline.
Brent crude futures for December fell around 0.7% to $101.58 per barrel, while November West Texas Intermediate crude futures dropped about 1.1% to $90.14 per barrel.
G7 Plans Release of 100 Million Barrels
The G7 agreed on Friday to release 100 million barrels of crude oil and fuel products from emergency reserves.
A significant portion of diesel supplies is expected to be released within 20 days.
The move is intended to reduce pressure on global energy markets following supply disruptions linked to the conflict involving Iran.
The additional supply helped ease some concerns that oil markets could face severe shortages in the near term.
Middle East Oil Exports Recover
Middle Eastern crude exports have also shown signs of recovery.
Reports citing Kpler data showed that exports exceeded pre-war levels on four days during the final week of September.
Daily exports reached between 19.5 million and 22.5 million barrels on September 24 and again between September 27 and 29.
The seven-day moving average stood at approximately 18.5 million barrels per day on October 1, above the pre-war average of around 18 million barrels per day.
Strait of Hormuz Flows Improve
The rebound in exports has been supported by higher volumes moving through the Strait of Hormuz as well as increased use of alternative shipping routes.
However, transportation risks remain elevated.
Shipping companies continue to operate in a highly uncertain environment, with military activity and potential attacks threatening key infrastructure and trade routes.
Regional Attacks Keep Oil Market on Edge
Despite improving export flows, geopolitical risks remain a major factor for oil prices.
Yemen’s Iran-aligned Houthis said they launched missiles and drones at Saudi Aramco facilities in Riyadh and the Khurais region.
The group said the attacks were carried out in response to Saudi-led military strikes in Yemen.
Saudi Arabia had not confirmed the reported attacks.
The continued threat of disruption is preventing oil prices from falling more sharply.
Saudi Aramco Cuts Asia Selling Price
Saudi Aramco also unexpectedly reduced the November official selling price for Arab Light crude to Asian customers.
The company cut the price by $3 per barrel, bringing it to a discount of $5 compared with the Oman-Dubai benchmark.
That represents the widest discount since June 2020.
The move suggests Saudi Aramco is seeking to protect market share as rising freight costs and increasing competition affect oil trade flows.
OPEC+ Keeps Production Targets Unchanged
OPEC+ added another element to the market outlook by keeping its November production targets unchanged.
The group decided not to make additional changes to output levels despite recent volatility in global oil markets.
OPEC+ said its next meeting is scheduled for November 1.
Oil Market Balances Supply Recovery and Geopolitical Risk
For now, oil traders are balancing improving supply conditions against persistent geopolitical uncertainty.
Higher Middle Eastern exports and the planned G7 reserve release have reduced some fears of a near-term shortage.
However, continued military activity and risks to shipping routes mean that oil prices remain vulnerable to sudden changes in sentiment.
