Oil Prices Ease as Gulf Supplies Show Resilience

Key Developments:

• Brent falls below $100 as supply concerns ease
• Gulf oil flows recover to more than 81% of pre-war levels
• G7 reserve release adds 100 million barrels to supply

SINGAPORE (Business Recorder) — October 06, 2026: Oil prices moved lower as stronger crude shipments from the Middle East and a coordinated G7 emergency stockpile release eased immediate concerns over a global supply shortage.

Brent crude declined 83 cents, or 0.8%, to $99.49 a barrel, while US West Texas Intermediate fell $1, or 1.1%, to $88.43. The retreat came despite continuing security risks around key Middle Eastern shipping routes.

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Recent shipping data indicates that oil producers in the Gulf have managed to maintain substantial export volumes despite disruptions caused by attacks on infrastructure and vessels. Excluding Iran, Gulf oil flows recovered to more than 81% of levels recorded before the regional conflict, with Saudi Arabia accounting for a significant portion of the increase.

Market analysts said alternative shipping arrangements and changes in logistics have allowed producers to keep crude moving even as security costs remain elevated.

Priyanka Sachdeva, head of market insights at Phillip Nova, said: “Shipping data shows regional crude exports actually exceeded pre-war levels on several days in late September.”

She cautioned, however, that the improvement should not be interpreted as a complete return to normal conditions, pointing to continued risks to vessels using regional waterways.

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“There have been renewed attacks on tankers around the Strait of Hormuz, and the number of incidents has increased in recent days,” Sachdeva said, adding that transportation, insurance, routing and security costs remain elevated.

The latest figures show the recovery is uneven across the energy sector. Reuters reported that crude and condensate exports have recovered to about 91% of pre-conflict levels, while refined fuel shipments remain considerably weaker. Saudi crude exports rose sharply during the period, helping lift overall Gulf supplies.

Saudi Arabia has also reduced the official selling price of its Arab Light crude for Asian buyers, another indication that physical supply conditions have improved sufficiently to put some downward pressure on regional pricing. The reduction was reported at the steepest discount for the grade since 2020.

Additional relief is coming from emergency reserves. G7 countries have agreed to make 100 million barrels of diesel and crude available from emergency stocks while committing to avoid energy export restrictions. The International Energy Agency said the broader energy situation remains under pressure, particularly in refined products and diesel markets.

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The G7 move follows a much larger emergency response already undertaken through the IEA. Member countries previously agreed to release 400 million barrels from emergency reserves, with more than 80% of that amount already released by the time of the latest G7 discussions.

Despite the improvement in physical crude flows, traders remain cautious because the security situation could quickly reverse recent gains. The Strait of Hormuz remains a crucial route for global energy shipments, while attacks on tankers have increased the cost and complexity of moving oil through the region.

Oil field and Oil Pump near Bakersfield, California, USA. CREDIT: Getty Images.

The conflict along Yemen's Red Sea coast is adding another layer of uncertainty. Saudi-backed Yemeni government forces have advanced toward the Bab al-Mandab Strait, while Houthi forces have claimed retaliatory attacks on Saudi targets, including oil infrastructure. The claims regarding some of the attacks could not immediately be independently verified.

The developments around Bab al-Mandab are significant for energy markets because the waterway connects the Red Sea with the Gulf of Aden and is part of an important maritime corridor. Any sustained disruption could increase shipping distances, insurance costs and pressure on already strained energy supply chains.

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For now, higher Middle Eastern exports and the additional availability of emergency reserves have reduced some of the immediate pressure on crude prices. However, continued attacks, constrained refined-product supplies and elevated shipping risks mean the market remains sensitive to any fresh disruption in the region.

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