Oil prices fell in early trading on Monday as recovering crude exports from the Middle East and plans by the Group of Seven (G7) to release emergency oil stocks eased immediate concerns over global supply, although persistent geopolitical and maritime security risks continued to support prices.
As at 3:45 am (WAT), Brent crude was trading at $101.66 per barrel, down 0.58%, while West Texas Intermediate (WTI) stood at $90.14 per barrel, down 1.01%.
The decline followed the G7’s decision to release 100 million barrels of crude and fuel products from emergency reserves. A substantial portion of the release is expected to be diesel, with supplies due to enter the market within 20 days, providing additional relief to markets facing disruption from the conflict involving Iran.
Meanwhile, Middle Eastern crude exports recovered during the final week of September, with Kpler data showing volumes exceeded pre-war levels on four days. Exports reached between 19.5 million and 22.5 million barrels per day on September 24 and between September 27 and 29, while the seven-day moving average stood at 18.5 million bpd on October 1, above the pre-war average of 18 million bpd.
The improvement has been supported by increased crude flows through the Strait of Hormuz and alternative export routes. However, the recovery has not eliminated the risks facing vessels operating in the region, with shipping security remaining a major concern for crude and refined-product movements.
The security situation was further complicated by claims from Yemen’s Iran-aligned Houthis that they had launched missiles and drones at Saudi Aramco facilities in Riyadh and the Khurais area in response to Saudi-led strikes in Yemen. Saudi Arabia had not confirmed the reported attacks at the time of the report.
Saudi Aramco also unexpectedly reduced its November official selling price for Arab Light crude to Asia by $3 per barrel, placing it at a $5-per-barrel discount to the Oman-Dubai average. The discount was reported as the widest since June 2020, as the producer responds to changing market conditions and higher freight costs.
OPEC+ meanwhile agreed to keep its November production targets unchanged, with the group scheduled to meet again on November 1. The decision leaves the existing production framework intact as producers and traders continue to assess the durability of Middle East supply recovery.
For Nigeria’s downstream market, movements in international crude benchmarks remain important to refined-product economics, particularly for products priced with reference to import-parity conditions. However, freight, insurance, shipping availability and refined-product supply will remain important variables while geopolitical risks persist.
The immediate market picture therefore remains balanced between improving physical supply and continuing security risks. While higher Middle Eastern exports and the G7 reserve release are easing supply concerns, the threat to shipping and energy infrastructure means the market has not fully removed the geopolitical risk premium.