Oil prices have dropped sharply - what's behind it
Tengrinews.kz — Oil prices are retreating amid expectations of a potential dialogue between the U.S. and Iran and a partial recovery of Saudi Arabian supplies. Brent crude has dropped below $100 per barrel.
As of 3:18 PM Astana time, November futures for Brent crude on the London ICE exchange fell by 2.17 percent to $98.16 per barrel.
Screenshot from ice.com
November futures for U.S. WTI crude dropped by 2.70 percent to $89.87 per barrel.
Screenshot from ice.com
Why oil prices are falling
The primary factor behind the decline in oil prices was reports suggesting that Iran could open the Strait of Hormuz within seven days, provided the U.S. takes steps to reduce military pressure and ease the blockade of Iranian ports. According to media reports, Tehran has already conveyed this proposal to Washington through intermediaries.
Further downward pressure on prices stemmed from hopes for a diplomatic de-escalation between Washington and Tehran. Earlier, U.S. President Donald Trump expressed readiness to meet with Iranian President Masoud Pezeshkian on the sidelines of the UN General Assembly in New York.
Another contributing factor was the partial recovery of Saudi exports following attacks on its oil infrastructure. On September 20, Saudi Aramco loaded approximately 14 million barrels of oil onto seven supertankers. Over a six-day period, the average volume of Saudi oil passing through the Strait of Hormuz reached 2.9 million barrels per day. By comparison, that figure stood at approximately 700,000 barrels in August.
Why this matters for Kazakhstan
Fluctuations in oil prices are critical for Kazakhstan, as they impact budget revenues, the National Fund's status, and the tenge exchange rate, oil and gas expert Askar Ismailov previously noted. Market instability can also affect inflation, investment activity, and financial markets.
Kazakhstan's 2026–2028 budget is based on key benchmarks: $60 per barrel for oil and 540 tenge per dollar. These parameters are used to calculate export revenues and government spending.
Meanwhile, the draft 2027 budget for Kazakhstan incorporates an oil price of $70 per barrel. According to the Ministry of National Economy, this benchmark was established based on a consensus forecast from approximately 18 international financial institutions.