Brent Slips as Supply Outlook Improves

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.

Brent crude fell below $102 per barrel on Monday as investors continued to monitor rising tensions in the Middle East, while OPEC+ agreed to maintain oil production quotas unchanged next month. Saudi-backed forces in Yemen 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. The Houthis seized control of the Bab el-Mandeb, a strategic chokepoint between the Red Sea and the Gulf of Aden that Saudi Arabia had been using to export oil while avoiding the Strait of Hormuz. Meanwhile, major OPEC+ members agreed over the weekend to leave production quotas unchanged next month amid prolonged supply disruptions from the Middle East conflict. The decision comes as oil prices climb back toward the $100-a-barrel level and diesel prices reach record highs at the pump, prompting G7 nations to release emergency oil reserves amid the continuing conflict.

Brent crude traded around $102 a barrel on Friday amid reports of additional US military deployments to the Middle East and China’s decision on Thursday to halt fuel exports this month. The US is reportedly sending a third aircraft carrier strike group to the region, along with an amphibious force carrying 2,000 Marines, raising concerns over a potential escalation in the months-long conflict. The deployment comes as US President Donald Trump has signaled an intention to resume strikes on Iran after the November midterm elections. Meanwhile, China’s major refiners have suspended most refined fuel exports for October. However, a strong rebound in oil flows from the Persian Gulf has largely offset upward price pressures. Middle Eastern crude exports have recovered close to prewar levels, although uncertainty over US-Iran negotiations continues to cloud the outlook. The G7 have agreed to release as much as 100 million barrels of diesel and crude stocks over the next four months.