Brent crude fell below $100 a barrel on Monday as signs of recovering Saudi oil exports and renewed hopes of diplomatic progress between the United States and Iran eased concerns over prolonged supply disruptions.
Brent crude dropped to about $99.50 a barrel, its lowest level since September 9, while West Texas Intermediate also fell below $96.
The decline came after reports indicated that Saudi Arabia was restoring crude shipments following attacks that had disrupted key export routes. Satellite data cited by JPMorgan showed Saudi oil flows through the Strait of Hormuz averaging about 2.9 million barrels per day, a sharp increase from roughly 700,000 barrels per day recorded in August.
Oil markets also reacted to growing expectations of possible US Iran diplomatic contacts during this week’s United Nations General Assembly in New York. Any progress towards negotiations could help ease concerns about prolonged disruptions to Middle Eastern oil supplies and reduce the geopolitical premium that has pushed crude prices higher.
Monday’s decline marked a notable turnaround from last week, when Brent crude climbed close to $110 a barrel amid mounting fears over supply disruptions across the Middle East.
However, concerns over global oil supplies have not disappeared. The continuing conflict in the region and uncertainty around the Strait of Hormuz remain key factors capable of triggering fresh movements in crude prices.
In Nigeria, elevated global crude prices have continued to contribute to pressure on local fuel prices, adding to concerns over the rising cost of living. Industry stakeholders have continued to call for stronger government support for domestic refining as a way of reducing dependence on imported petroleum products and easing pressure on consumers.
Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, called for greater support for local refineries and a reduction in petroleum product imports. He said strengthening domestic refining capacity would help Nigeria reduce its exposure to global supply disruptions and fluctuations in international oil prices.
