By Sumit Saha and Emily Chow
SINGAPORE, Oct 6 (Reuters) – Oil prices fell on Tuesday as resilient Middle Eastern crude exports and a G7 emergency stockpile release eased supply concerns, though lingering security risks in the region capped further losses.
Brent crude futures were down 83 cents, or 0.8%, at $99.49 a barrel at around 0650 GMT, while US West Texas Intermediate crude futures fell $1, or 1.1%, to $88.43 a barrel.
“Shipping data shows regional crude exports actually exceeded pre-war levels on several days in late September. Alternative routes and logistical adjustments have somehow allowed producers to keep barrels moving despite the disruption around Hormuz,” said Priyanka Sachdeva, head of market insights at Phillip Nova.
“However, calling this a full normalisation of supply doesn’t look justified quite yet … There have been renewed attacks on tankers around the Strait of Hormuz, and the number of incidents has increased in recent days. This means that while barrels are still moving, the cost, insurance, routing, and security risks of moving them remain elevated.”
Gulf oil flows excluding Iran surged to over 81% of pre-war levels in September, data showed, led by a recovery in Saudi exports despite attacks on the kingdom’s oil infrastructure and escalating Iranian attacks on regional shipping, while Iranian exports fell to zero due to a US blockade.
While the market remains nervous about potential supply disruptions from the region, Gulf oil producers continue to adapt to the region’s situation, ING analysts said in a Tuesday note.
“Kuwait said that it is producing at 75% of pre-war levels, while the Saudis also cut the official selling price of their Arab Light into Asia for November loadings, a sign of an improving supply picture,” they said.
Further easing supply concerns, G7 countries agreed on Friday to release 100 million barrels of diesel and crude from emergency reserves and pledged to refrain from energy export restrictions after pressure from US President Donald Trump.
The conflict between Saudi Arabia and Iran-backed Houthi forces in Yemen continued to fuel concerns over potential disruptions to supply from the region’s largest oil exporter amid a stalemate in US-Iran talks.
Saudi-backed Yemeni government forces staged a lightning advance on Monday to retake the coast around the Bab el-Mandeb Strait up to the city of Mocha. In response, the Houthis said they had attacked key locations in Saudi Arabia, including an Aramco refinery in Rabigh. The claims could not be immediately verified.
(Reporting by Sumit Saha in Bengaluru and Emily Chow in Singapore; Editing by Christopher Cushing and Jacqueline Wong)
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