This week, the international crude oil market experienced a classic "rollercoaster" ride.

From a clear decline at the Monday open, to midweek consolidation, to a single-day surge of over 4% on Thursday, and a modest continued gain on Friday, Brent crude ultimately posted a notable weekly advance, while US crude also recovered its losses and achieved a weekly gain.

The price action throughout the week fully reflected the intense tug-of-war between bullish and bearish factors in the current market: on one side, expectations of looser supply driven by an unexpected increase in Middle East exports and the G7's release of strategic reserves; on the other side, geopolitical and weather premiums supported by the ongoing Iran war, escalating threats to shipping through the Strait of Hormuz, attacks by Yemen's Houthi rebels, and large-scale production shutdowns caused by a hurricane in the Gulf of Mexico.

Ultimately, concerns over supply disruptions prevailed, and oil prices broke upward amid volatility.

Monday's Sharp Drop Sets the Tone: Middle East Export Recovery and G7 Reserve Release Deliver a Double Blow

Oil prices came under clear selling pressure early in the week.

Brent crude futures fell nearly $2 to settle at $100.32 per barrel, while US crude dropped about $1.68 to close at $89.43.

The core catalysts came from two directions.

First, shipping data showed that despite continued attacks on vessels in the Strait of Hormuz, Middle East crude exports exceeded pre-war levels on four days in the final week of September, and the market began to digest the signal that "supply has not been completely disrupted as previously feared."

Second, the G7, under pressure from US President Trump, agreed to release 100 million barrels of diesel and crude from emergency reserves and pledged not to impose energy export restrictions, further reinforcing expectations of looser supply.

However, the decline did not spiral out of control.

The market remained vigilant about long-term supply disruptions caused by the Iran war, with analysts noting that a Middle East ceasefire remains distant and that renewed hostilities between Saudi Arabia and the Houthis will continue to elevate the risk of attacks on energy infrastructure and vessels.

Meanwhile, the CEO of Saudi Aramco publicly stated that crude and refined product supply will remain tight, and that after the emergency reserve release, it could take two years for global inventories to be replenished.

US Strategic Petroleum Reserve inventories have fallen to their lowest level since 1982, providing some bottom support for the market.

Tuesday's Stabilization and Wednesday's Choppy Trading: Export Recovery Details and IEA Accelerated Reserve Release Intertwine

On Tuesday, oil prices were largely flat, with Brent edging up to $100.58, while US crude barely moved.

The market entered a digestion phase.

The CEO of commodities trading giant Vitol revealed that approximately 12 million barrels per day of crude and 2 million barrels per day of refined products had been shipped out of the Middle East by tanker over the past seven to ten days, and that Saudi Arabia's East-West pipeline was delivering 580,000 barrels to the Yanbu export hub, further confirming the reality of export recovery.

At the same time, attacks by Yemen's Houthi rebels on Saudi airports and a 100% assessed probability of cyclone formation in the Gulf of Mexico limited further downside for oil prices.

On Wednesday, prices closed lower in choppy trading, with Brent falling back to $100.20 and US crude posting a larger decline to close at $88.28.

The International Energy Agency's agreement to accelerate its previously announced reserve release and prioritize diesel became an important factor weighing on oil prices.

Analysts argued that Europe, as a region heavily affected by fuel shortages, would see its demand for US crude partially eased by the reserve release, thereby reducing supply pressure on the US.

However, US Energy Information Administration inventory data came in unexpectedly tight, with crude stocks falling by 3.2 million barrels in the week ending October 2, in stark contrast to analyst expectations of an increase, while gasoline inventories rose and distillate inventories fell, revealing structural tightness on the refined products side.

Warnings that a Gulf storm could develop into an Atlantic hurricane, along with news of Ukrainian attacks on Russian oil facilities, together provided bottom support for oil prices.

Thursday's Surge and Friday's Continuation: Hurricane Shuts In Production and Middle East Risk Premium Gets Repriced

The real turning point came on Thursday.

Oil prices surged more than 4% in a single day, with Brent settling at $104.28 and US crude at $91.49, and both contracts briefly rising by more than $5 during the session.

The driving factors were clear and powerful: on one hand, Middle East war concerns reignited as the number of tanker attacks in the Strait of Hormuz rose to the highest level since the war began, with the Iran war now in its eighth month and oil and fuel transported through the strait still accounting for about 20% of global volumes; on the other hand, Hurricane Isaias approached the Gulf of Mexico, and US Bureau of Ocean Energy Management data showed that about 1.3 million barrels per day of crude production had been shut in as of Thursday, accounting for more than 60% of total output, with Shell and Chevron curtailing operations and BP even evacuating all personnel and shutting in production at key platforms.

Trump's remarks about "productive discussions" with Iran and his pledge not to launch attacks before the midterm elections had briefly pulled oil prices back from their highs, but the market's concerns about actual supply disruptions clearly dominated.

On Friday, oil prices continued to edge higher, with Brent at $104.72 and US crude at $91.85.

As the hurricane pressed on, the proportion of Gulf of Mexico crude production shut in rose to over 70%.

News that China plans to resume refined product exports after the Golden Week holiday, along with Trump's hints of a possible major announcement on diesel and consideration of suspending the federal gasoline tax, exerted some downward pressure on oil prices but failed to reverse the weekly gain.

Deep Tension Between Fundamentals and Sentiment: Production Uncertainty and the Challenge of Inventory Rebuilding

Throughout the week, the market oscillated between "short-term supply increases" and "rising medium- to long-term supply risks."

The Iran war has disrupted capacity expansion projects in the Middle East, making future production potential estimates highly uncertain, and OPEC+ has consequently postponed its review of member production quotas for 2027.

The US Energy Information Administration even downgraded its forecast for global oil production and demand in 2026.

Saudi Aramco unexpectedly cut its official selling price for crude to Asia for November to the lowest level in six years, reflecting its delicate balancing act between pursuing market share and defending prices.

On the inventory front, the US Strategic Petroleum Reserve is at a historic low, and while commercial inventories showed expectations of recovery in some periods, actual data coexisted with structural shortages in refined products.

Analysts widely believe that even with reserve releases by the G7 and IEA, it will be difficult to quickly fill the long-term supply gap caused by geopolitical conflict, and global inventory rebuilding could take a considerable amount of time.

The sharp fluctuations in oil prices this week were essentially a rebalancing process between geopolitical risk premiums and actual supply recovery.

The phased recovery in Middle East exports and the release of strategic reserves temporarily alleviated extreme market panic, but the persistent threat in the Strait of Hormuz, Houthi attacks, substantial production shutdowns caused by the Gulf of Mexico hurricane, and the long-term drag of the Iran war on capacity expansion together supported oil prices in high-level volatility and ultimately an upward breakout.

Looking ahead, the market will closely monitor the actual navigation situation in the Strait of Hormuz, the final impact of the hurricane on Gulf of Mexico production, the specific pace of IEA reserve releases, and diplomatic signals between the US and Iran.

As long as there is no substantive easing in the Middle East situation, the risk premium for supply disruptions will be difficult to fully dissipate, and oil prices will continue to seek a new equilibrium amid high volatility.