Oil prices edged lower after Middle East oil exports resumed

Oil prices fell on Monday after crude exports from the Middle East returned, on some days, above levels recorded before the war with Iran, while G7 countries decided to release 100 million barrels of oil and diesel from emergency reserves, according to the Wall Street Journal.

The increased availability of oil eased supply concerns despite continued attacks on vessels and energy infrastructure in the Gulf region.

Brent crude futures fell by 72 cents, or 0.71%, to $101.59 a barrel, while U.S. West Texas Intermediate (WTI) crude declined by $1.05, or 1.2%, to $90.05 a barrel.

Brent thus lost most of the gains accumulated the previous week, while WTI fell by 1.6%, after G7 countries agreed on Friday to release 100 million barrels of diesel and crude oil from strategic reserves. Member states also pledged to avoid imposing restrictions on energy exports, following pressure from U.S. President Donald Trump.

Pressure on prices was amplified by the recovery in Middle East exports. Preliminary data from shipping-tracking company Kpler show that crude shipments from the region exceeded pre-war levels on four of the seven days in the final week of September.

Exports moved above the pre-conflict threshold on September 24 and during September 27-29, reaching volumes ranging from 19.5 million to 22.5 million barrels per day.

By comparison, between March 2025 and February 2026, before the outbreak of the war between the U.S. and Israel, on the one hand, and Iran, on the other, regional crude exports averaged around 18 million barrels per day.

The seven-day average of crude exports reached 18.5 million barrels per day on October 1. The data include shipments through the Strait of Hormuz and the Red Sea, exports through terminals, as well as ship-to-ship oil transfers in the Gulf of Oman.

When crude oil, petroleum products, chemicals and liquids other than gas are included, total export volumes averaged 22.4 million barrels per day in the seven days ended September 30.

Liquefied natural gas shipments through the Strait of Hormuz also recorded a recovery, with the number of cargoes leaving the strait in September reaching the highest monthly level since February.

The data do not, however, include any vessels that may have crossed the area with their Automatic Identification System (AIS) transponders switched off to avoid detection.

Before the outbreak of the war with Iran on February 28, around 125 large commercial vessels typically passed through the Strait of Hormuz each day, including oil tankers, gas carriers, bulk carriers and container ships. The route accounted for around 20% of the world's daily crude oil and LNG supply.

"The G7 decision to tap strategic reserves reduces some of the immediate supply concerns, while there is a growing prospect that volumes exported by Saudi Arabia are returning toward pre-war levels, even if those barrels continue to be transported at higher costs and via less efficient routes,” said Tim Waterer, chief analyst at KCM Trade.

"That combination is enough to keep prices under pressure for now, even though the risks of further damage to energy infrastructure in the Gulf region have not disappeared,” he added.

• Attacks in the Strait of Hormuz keep Brent above $100

Despite the recovery in exports, geopolitical risks continue to provide support to oil prices. Maritime intelligence company Marisks reported at least seven incidents targeting tankers in and around the Strait of Hormuz.

The very large crude carrier Kazimah III was reportedly struck by an unknown projectile on October 1 while sailing through the strait, with the incident causing a fire on board.

"All crew members were reported safe and were subsequently evacuated from the vessel,” Marisks said.

According to Kpler, Kazimah III had last been observed unloading two million barrels of Kuwaiti crude at the port of Ras Markaz in Oman on September 17.

The United Kingdom Maritime Trade Operations agency also reported at least one attack per day in the Strait of Hormuz or the Gulf of Aden since October 2.

Marisks warns that commercial vessels transiting Hormuz face a "heightened and increasingly unpredictable kinetic threat” amid a sharp increase in traffic.

According to the company, available information does not necessarily indicate that the recent incidents represent deliberate attacks on individually selected commercial vessels. One hypothesis is that Iranian forces are launching missiles into a predetermined engagement area, a so-called "kill box,” and that the weapons may identify and track available radar signatures within it. Under these circumstances, the mere presence of a vessel in the area at the time of an attack could represent the main risk factor.

Tensions have also intensified elsewhere in the region. Houthi rebels said they launched ballistic missiles and drones at Saudi Aramco facilities in Riyadh and the Khurais region in response to 50 air and missile strikes carried out in Yemen by the Saudi-led coalition over the past 12 hours. Reports of attacks on Saudi facilities have not been confirmed by authorities in Riyadh.

At the same time, Yemen's internationally recognized and Saudi-backed government announced the launch of a major military campaign to retake territories controlled by Iran-backed Houthi rebels.

Against this backdrop, ING analysts believe that persistent geopolitical tensions and the intensification of attacks on commercial vessels in the Gulf continue to keep Brent crude above the $100-per-barrel threshold. The price remains significantly above the roughly $73 per barrel recorded before the outbreak of the war with Iran at the end of February.

• OPEC+ keeps production targets unchanged

Another factor being watched by the market is OPEC+ policy. The group decided on Sunday to keep production targets for November unchanged, in line with market expectations, as further significant changes to production policy are considered unlikely before next year, according to Reuters.

The decision was taken during a brief online meeting of seven key members of the alliance comprising the Organization of the Petroleum Exporting Countries and its allies: Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman.

OPEC+ producers in the Gulf, however, have pumped volumes considerably below the established ceilings amid disruptions caused by the war with Iran. In recent months, exports have stood at around 60%-80% of normal levels.

"The group of seven OPEC+ countries kept its production ceilings unchanged, in line with market expectations. However, despite increased flows through the Strait of Hormuz, production levels remain well below quotas,” said UBS analyst Giovanni Staunovo.

"Consequently, the oil market remains tight,” he added.

The seven main producers pumped around 25 million barrels per day in August, 630,000 barrels per day more than in July, but around 5 million barrels per day below the levels recorded before the war, in February, according to OPEC data.

Although OPEC+ raised production targets for most of 2026, following several years of cuts, a large portion of the announced increases remained only on paper because the Middle East conflict prevented producers from actually delivering the additional volumes.

The war also prompted OPEC+ to postpone the assessment of member states' production capacities, a process essential for setting quotas for 2027. The conflict disrupted capacity expansion projects in the Middle East and made it more difficult to estimate future production potential.

OPEC+ continues to maintain production cuts of around two million barrels per day, applicable to most members. The results of the capacity assessment will be needed to determine how any future production increases will be distributed, and industry sources consider a significant change before 2027 unlikely.

The next meeting of the seven main members is scheduled for November 1.

Despite the recovery in oil flows from the Middle East and the G7 intervention through the release of strategic reserves, the market thus remains caught between two opposing forces: the increased physical availability of crude oil, which is exerting downward pressure on prices, and the risk of a new military escalation in the Gulf, which continues to support a significant geopolitical premium in oil prices.