Key Moments
- ICE Brent has continued to trade with firm support around the $100/bbl level amid elevated geopolitical risks in the Persian Gulf.
- Attacks on Saudi infrastructure, adjusted production in Kuwait, and Saudi pricing moves for Arab Light into Asia point to a complex, shifting supply landscape.
- European natural gas storage is just under 73% full, lagging last year’s 83% and a 5-year average of 88%, leaving the market exposed heading into winter.
Geopolitical Premium Keeps Brent Near $100
ING analysts Warren Patterson and Ewa Manthey report that ICE Brent prices are still being underpinned close to the $100 per barrel mark as ongoing geopolitical concerns in the Persian Gulf overshadow signs of improved oil supply.
According to the analysts,
“ICE Brent continues to find support around the $100/bbl level, with geopolitical risks outweighing an improvement in the supply picture.”
Market Anxiety Over Persian Gulf Supply
Patterson and Manthey point out that even though indicators suggest oil shipments from the Persian Gulf are recovering, sentiment in the market remains fragile.
They write:
“While there are growing signs of a recovery in oil flows from the Persian Gulf, the market remains nervous about potential supply disruptions from the region. This is keeping prices well-supported for now. This nervousness is likely to persist until there are signs of progress in a deal between the US and Iran.”
Saudi Infrastructure Under Threat
The analysts highlight that recent security incidents in Saudi Arabia continue to reinforce concerns about the reliability of regional supply routes.
“Reports yesterday said Saudi Arabia’s East-West pipeline was targeted again. It only recently returned to operation following an earlier attack. Though the latest attack doesn’t appear to have disrupted flows through the pipeline, it’s a reminder that flows remain at risk.”
Gulf Producers Adjust Output and Pricing
Producers across the Persian Gulf are recalibrating production levels and official prices in response to the evolving situation.
“Oil producers in the Persian Gulf continue to adapt to the region’s situation. Kuwait said that it is producing at 75% of pre-war levels, while the Saudis also cut the official selling price of their Arab Light into Asia for November loadings, a sign of an improving supply picture.”
| Producer/Region | Action/Status | Implication |
|---|---|---|
| Kuwait | Producing at 75% of pre-war levels | Partial recovery in output |
| Saudi Arabia | Cut official selling price of Arab Light into Asia for November loadings | Signals an improving supply picture |
| Saudi East-West pipeline | Targeted again after a previous attack; currently not disrupting flows | Ongoing risk to infrastructure and flows |
European Gas Storage Still Exposed
Beyond oil, the analysts also underscore continued fragility in the European natural gas market, despite an uptick in liquefied natural gas shipments from the Persian Gulf.
“The European gas market remains vulnerable, despite signs of a more recent pick-up in LNG flows from the Persian Gulf. EU gas storage is just shy of 73% full. This is down from 83% at the same stage last year, and below the 5-year average of 88%.”
| EU Gas Storage Comparison | Level |
|---|---|
| Current storage | Just shy of 73% full |
| Same stage last year | 83% full |
| 5-year average | 88% full |
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