Oil stabilizes as Russia, Middle East concerns balance with oversupply worries

Oil prices showed little change on Monday, as concerns over developments in Russia and the Middle East balanced with worries tied to oversupply.

Brent crude futures, which have traded between about $65.50 and $69 per barrel since early August, fell by 12 cents or 0.2% to $66.56 a barrel by 10:00 GMT. US West Texas Intermediate (WTI) crude for October delivery slipped 3 cents or 0.1% to $62.65 a barrel.

The October WTI contract expires on Monday, while the more active November contract fell 18 cents or 0.3% to $62.22 a barrel.

The Polish armed forces, a NATO member, said Polish and allied aircraft were deployed early Saturday to secure the country’s airspace after Russia carried out airstrikes targeting western Ukraine near the Polish border.

The deployment followed an incident on Friday when three Russian military aircraft violated the airspace of NATO member Estonia for 12 minutes.

In the Middle East, four Western countries recognized a Palestinian state, prompting an angry response from Israel and adding to concerns in the oil-rich region.

Brent and WTI had ended Friday’s session down more than 1%, posting a slight weekly decline under pressure from ample supplies and weakening demand.

Analysts at SEB Bank said: “The current state of the oil market indicates that global demand for oil will fall from the third quarter to the fourth, and again into the first quarter of 2026. At the same time, OPEC+ production is on an upward path.”

They added: “The big question, of course, is whether China will absorb the growing surplus into storage, or if oil prices will fall into the $50s range. We favor the latter scenario.”

Iraq’s state oil marketer SOMO said the country, OPEC’s second-largest producer, has raised oil exports under the OPEC+ agreement.

SOMO expects September exports to average between 3.4 and 3.45 million barrels per day.

Baghdad has also given preliminary approval to a plan to resume oil exports via pipeline from the semi-autonomous Kurdistan region through Turkey, after delays to a restart that had been expected, according to sources familiar with the talks cited by Reuters.