Brent Rebounds as Middle East Tensions Flare

Brent crude dropped below $100 per barrel on Tuesday, extending losses from the previous session, pressured by signs that Middle East crude exports are recovering toward pre-war levels. JPMorgan said crude shipments have rebounded to 17.5 million barrels a day, or 98% of pre-war levels, while product flows such as diesel and gasoline reached 3 million barrels a day, or 58%. Gulf producers are moving larger volumes through the Strait of Hormuz despite elevated shipping risks, with Iraq seeking to hire additional vessels to transport its cargoes through the waterway. Kuwait also said it is pumping oil at around 75% of the level seen before the Iran war. In addition, Saudi Arabia sharply reduced the price of its flagship crude grade for Asian buyers as supply flows improved, further signaling a loosening market. Meanwhile, investors are awaiting the US EIA’s Short-Term Energy Outlook, due later today, for fresh insights into the US energy market.

Brent crude fell below $102 a barrel on Monday, with markets balancing easing supply pressures against renewed geopolitical risks. Prices came under pressure after Saudi Aramco cut the November selling price of Arab Light to Asian buyers to $5 a barrel below the regional benchmark, a deeper discount than the $2 offered for October. The move suggests stronger competition for market share as oil flows through the Strait of Hormuz recover, while the G7’s latest emergency stockpile release is also weighing on prices. However, supply concerns remain significant. Saudi Arabia’s East-West pipeline continues to operate normally after reports of a fresh attack had briefly raised fears of another disruption. Meanwhile, OPEC+ agreed to leave production quotas unchanged next month.

Brent crude fell toward $101 per barrel on Monday, giving back some of last week’s gains as signs of increasing global supply outweighed concerns over persistent geopolitical risks in the Middle East. On Friday, G7 countries agreed to release 100 million barrels of crude and diesel from emergency reserves while pledging not to impose restrictions on energy exports. Major OPEC+ members also agreed over the weekend to keep production quotas unchanged next month amid prolonged supply disruptions caused by the Middle East conflict. Meanwhile, data showed Persian Gulf crude exports exceeded pre-war levels on four of the seven days during the final week of September, despite disruptions in the Strait of Hormuz and the ongoing US-Iran conflict. In Yemen, Saudi-backed forces launched a full-scale military operation to retake areas controlled by the Houthis following weeks of escalating tensions between the Iran-backed group and Saudi Arabia.