Oil prices fell on Tuesday, with Brent crude dropping below $100 per barrel as recovering Middle East exports and the release of emergency stocks by Group of Seven countries eased concerns over global supply.
Brent crude oil, the international benchmark for Nigerian crude oil, declined 83 cents, or 0.8 percent to $99.49 per barrel at about 07:50 a.m. Nigerian time, while United States West Texas Intermediate crude fell $1, or 1.1 percent to $88.43 per barrel.
The decline extended losses recorded on Monday when Brent settled 1.89 percent lower at $100.32 per barrel and WTI dropped 1.84 percent to $89.43.
The latest retreat reflects growing evidence that Middle Eastern producers are finding ways to maintain crude shipments despite continued security risks around the Strait of Hormuz.
Shipping data showed that crude exports from the region exceeded pre-war levels on several days toward the end of September as producers relied on alternative routes and logistical adjustments to keep oil moving to international markets.
The recovery has weakened earlier expectations that disruption around the Strait of Hormuz would severely restrict Middle Eastern crude supply for an extended period.
Additional pressure on prices came from the decision by G7 countries to release 100 million barrels of crude oil and diesel from emergency reserves.
The intervention is intended to increase available supplies and reduce pressure on energy markets following months of disruption associated with the conflict in the Middle East.
However, uncertainty remains over how much additional supply the latest commitment will ultimately introduce into the market.
The International Energy Agency had previously coordinated a 400-million-barrel emergency release in March, with about two-thirds of those volumes already released, according to the agency.
The recovery in Middle Eastern exports has nevertheless become increasingly important to the direction of crude prices.
Regional oil flows rose sharply toward the end of September, exceeding the pre-war level of about 18 million barrels per day on several consecutive days.
Saudi Arabia has increased shipments through alternative routes, while other Gulf producers have also adjusted their operations to maintain exports despite disruption around key shipping corridors.
The improved supply picture has emerged even as attacks on tankers and energy infrastructure continue to create significant risks for the market.
The Strait of Hormuz remains particularly important because of the large share of global oil and liquefied natural gas supplies normally transported through the waterway.
Continued attacks could therefore quickly reverse the recent decline in crude prices if physical shipments are significantly disrupted.
The market is also dealing with tight supplies of refined petroleum products, particularly diesel, meaning stronger crude availability does not necessarily translate immediately into lower fuel prices.
Saudi Arabia’s decision to cut the November official selling price of its flagship Arab Light crude to Asian customers has further reinforced expectations of improving crude availability.
Saudi Aramco reduced Arab Light for Asian buyers to $5 per barrel below the Oman/Dubai benchmark average, the widest discount since June 2020.
The decline in Brent below $100 marks a significant reversal from the elevated levels reached during the height of concerns over Middle Eastern supply disruption.
For Nigeria, sustained oil prices around or below $100 would present a mixed economic impact.
Lower international crude prices could reduce the cost of petroleum products and ease some inflationary pressure, but a prolonged decline would also moderate Nigeria’s oil export earnings and government revenue.
The immediate direction of the market will depend on whether Middle Eastern producers can sustain the recent recovery in exports and whether the G7 stock release provides sufficient additional supply to offset continuing geopolitical risks.