Oil Prices Dip as G7 and Middle East Crude Supplies Prepare to Enter Market

Oil prices experienced a slight decline on Monday, driven by an increase in global energy supplies. Additional crude shipments from the Middle East and the Group of Seven’s (G7) decision to release oil from emergency reserves contributed to this easing of concerns. As of 7:15 am IST, Brent Crude was down 0.54% at $101.70, while WTI Crude fell 0.92% to $90.27.

G7’s Strategic Release

Last week, the G7 agreed to release 100 million barrels of diesel and crude from emergency stocks, responding to pressure from U.S. President Donald Trump. The member countries also committed to avoiding energy export restrictions. This decision coincided with a rise in Middle Eastern crude exports, which were reported to be above pre-war levels on four of the seven days in the last week of September, despite ongoing attacks on vessels in the Strait of Hormuz.

Geopolitical Tensions

The market remains sensitive to developments in the Gulf region. The Houthis have claimed responsibility for launching ballistic missiles and drones at Saudi Aramco facilities in Riyadh and Khurais, citing retaliation for recent Saudi-led airstrikes in Yemen. In response, Yemen’s internationally recognized government announced a major military campaign to reclaim territory held by the Iran-backed Houthis. Additionally, Saudi Aramco has unexpectedly lowered its November crude oil prices for Asia to six-year lows.

OPEC+ Review Postponed

OPEC+ has delayed a review that was set to address oil output quotas for its members in 2027. Sources indicate that the ongoing U.S.-Israeli conflict with Iran has disrupted projects aimed at expanding production capacity in the Middle East, leading to uncertainty in future production estimates. Meanwhile, developments in Europe are also influencing oil markets, with Ukrainian President Volodymyr Zelenskyy stating that Ukraine would intensify attacks on Russian oil refineries.

Brent crude has lost most of its gains from the previous week, while WTI is down 1.6% following the G7’s decision. The ongoing conflict in the Middle East has kept the oil market volatile, with current prices significantly lower than the peak of $126 per barrel seen earlier in the crisis.

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