Oil prices today: Brent slips as Saudi exports recover despite Middle East tensions
Oil prices fell on Monday as investors assessed signs of improving Saudi crude exports against continued security risks in the Middle East.
Brent crude futures fell to around $101.70 a barrel, while US West Texas Intermediate (WTI) crude dropped to about $98.20, with both benchmarks reaching their lowest levels since September 10.
The decline came despite fresh attacks claimed by Yemen's Iran-backed Houthis. The group said it had targeted sites in Riyadh with missiles and drones and an Aramco facility in Yanbu, an important oil export hub on the Red Sea.
Saudi oil exports recover
A key factor weighing on oil prices has been the recovery in Saudi crude shipments.
Attacks on Saudi Arabia's East-West pipeline have disrupted some shipments through Yanbu. Saudi Aramco has responded by increasing exports through the Strait of Hormuz and using alternative shipping arrangements.
Saudi exports have recovered to more than 4 million barrels per day in September, compared with 2.4 million barrels per day in August, according to provisional Kpler data cited by Reuters.
Aramco is also reportedly planning around 60 million barrels of crude exports from Ras Tanura through ship-to-ship transfers at Oman's Sohar port during September and October.
Houthi attacks keep supply risks elevated
The recovery in Saudi shipments has not removed concerns about energy infrastructure and shipping routes.
The latest Houthi attacks have added to risks surrounding Saudi oil facilities and regional export routes. At the same time, traffic through the Strait of Hormuz remains substantially below pre-conflict levels. Reuters reported that only about a dozen commodity vessels passed through the waterway over the weekend, compared with 35 the previous weekend.
The Strait is a major global energy route, making any sustained disruption significant for crude and LNG supplies.
US-Iran tensions remain in focus
The oil market is also tracking developments between the US and Iran.
US President Donald Trump has said he is open to meeting Iranian President Masoud Pezeshkian, who is expected in New York for the United Nations General Assembly. The possibility of renewed diplomatic engagement has contributed to some reduction in the oil market's risk premium.
However, tensions remain high, with Iran and the US continuing to exchange threats. Any renewed escalation could put additional pressure on regional oil supplies and shipping.
What it means for India
Crude prices remain an important factor for Indian markets because India is heavily dependent on imported oil.
Reuters reported that Indian shares were expected to open broadly flat on Monday, with investors watching crude prices and geopolitical developments. The Nifty 50 had closed at 23,346.4 on Friday, while elevated oil prices continued to be a concern for inflation and interest-rate expectations.
A sustained rise in crude prices can increase India's import costs and put pressure on inflation, the current account and the rupee. Conversely, continued recovery in regional oil supplies could ease some of those pressures.
Three factors are currently pulling the oil market in different directions.
1. Saudi supply recovery: Higher Saudi exports are reducing immediate concerns about a severe regional supply shortage.
2. Houthi attacks and shipping risks: Attacks on Saudi infrastructure and reduced traffic through the Strait of Hormuz continue to create uncertainty around future supplies.
3. US-Iran diplomacy: Expectations of possible diplomatic engagement have reduced some of the geopolitical risk premium in crude prices, although there is no confirmed resolution to the conflict.
For India, the direction of crude prices will remain closely linked to domestic energy costs, inflation expectations, the rupee and investor sentiment.