Oil prices drop as Middle East crude exports rise
What's the story
Oil prices fell on Monday, with Brent crude futures dropping by $0.7 to $101.60 a barrel and US West Texas Intermediate crude declining by $0.9 to $90.15 a barrel. The decline comes despite ongoing concerns about potential damage to Gulf oil infrastructure amid the Iran war. The decrease is largely attributed to increased crude exports from the Middle East and planned stock releases by Group of Seven (G7) nations, which have added supply into the market.
Export surge
Middle Eastern crude exports exceed pre-war levels
Shipping data has revealed that Middle Eastern crude exports have exceeded pre-war levels on four out of seven days in the last week of September.
This is despite attacks on vessels transiting through the Strait of Hormuz.
The increase in supply has kept prices under pressure, even as fears persist over possible further damage to energy infrastructure across the Gulf region.
Conflict escalation
Houthis attack Saudi Aramco sites
The Houthis have claimed responsibility for launching ballistic missiles and drones at Saudi Aramco sites in Riyadh and Khurais.
They said the attacks were retaliation for 50 Saudi-led air and missile strikes in Yemen over the last 12 hours.
Meanwhile, Yemen's internationally recognized government has announced a major military campaign to reclaim all areas controlled by Iran-backed Houthis.
Price reduction
Aramco cuts November crude oil prices for Asia
In a surprising move, Aramco has cut its November crude oil prices for Asia to six-year lows. This comes amid the ongoing conflict and uncertainty over how it could develop.
JPMorgan analysts have said, "We simply don't know how to model the endgame" of this war, as several economic thresholds that US administration would not cross have already been crossed without a clear exit strategy.
Price forecast
Goldman Sachs warns of potential price surge
Goldman Sachs has warned that if attacks on vessels in the Middle East escalate, oil prices could rise as high as $120 a barrel.
However, if exports return to normalcy, prices are likely to stabilize around $80 a barrel.
Daan Struyven, co-head of global commodities research at Goldman Sachs, said shipping risks have become a key driver of oil prices and they expect "meaningful upside to crude oil prices."