Brent falls 1.63% to $114.82 amid diplomatic moves to ease tensions
Key Facts
Brent crude fell 1.63% to $114.82 a barrel in a snapshot at 0959 GMT on October 26, as diplomatic efforts to ease regional tensions continued. West Texas Intermediate fell 2% to $101.19 a barrel at the same time, according to Reuters. Monday’s losses followed a 6% gain in Brent over the previous week, while prices closed Friday up by nearly $3. EL7 data showed Brent closing at $115.99 on October 26, compared with $116.72 on October 23. The Reuters snapshot reflects an intraday price, while EL7 data represent the closes on the two days.
In Tehran, Saudi Defense Minister Khalid bin Salman, Pakistan Army Chief Asim Munir and Turkish intelligence chief Ibrahim Kalin took part in a meeting hosted by Mohsen Rezaei, secretary of Iran’s Supreme National Security Council. Saudi Arabia’s Foreign Ministry said the visit was part of efforts to ease tensions and encourage dialogue and diplomatic solutions. The ministry added that Riyadh supports mediation by Qatar and Pakistan and is seeking to open negotiating channels to prevent a return to military escalation. Representatives of the four countries agreed to continue talks on expanding cooperation, particularly in regional peace and security. No details were announced on the date or location of a future meeting, according to the Associated Press.
The meeting was preceded by the arrival of Qatari mediators in Tehran on Sunday, in a move coordinated with the United States as part of efforts to ease tensions, according to a regional official cited by the Associated Press. The agency said the mediators were working with Iran and the United States to reach an agreement that would end the fighting and reopen the Strait of Hormuz, with major obstacles to an understanding remaining. Under a draft agreement discussed by the mediators, the strait could be reopened under a separate understanding Iran was discussing with Oman, without transit fees. But a U.S. official said President Donald Trump’s administration would not reach an agreement with Tehran before addressing nuclear issues. U.S. demands include allowing inspectors into Iran, according to the official cited by the agency.
Alongside the diplomatic contacts, the Houthis said they had attacked pumping stations on Saudi Arabia’s East-West pipeline and Riyadh airport, Reuters reported. There was no immediate Saudi confirmation of the attacks, while Saudi Arabia said on Sunday it had intercepted more missiles and drones. These developments keep supply security risks in focus in the oil market, even as prices fell during Monday’s session. Prices had ended the previous week with strong gains, with Brent up 6% and WTI rising 2.3%. The market is therefore weighing the impact of de-escalation efforts against the risk of continued attacks on infrastructure and oil routes.
The International Energy Agency’s forecasts offer a mixed outlook for supply and demand. Global oil supply rose by 2.5 million barrels per day month on month in September, to 102.3 million barrels per day, driven by Gulf producers. OPEC+ supply increased by 2.1 million barrels per day, led by Saudi Arabia, according to the agency’s October report. By contrast, the agency expects oil supply to decline by an annual average of 5.8 million barrels per day to 100.7 million barrels per day in 2026. It then expects supply to rise by 7.7 million barrels per day in 2027, placing September’s monthly increase alongside an expected annual supply trajectory.
On the demand side, the agency expects a partial recovery of 2 million barrels per day in 2027, but demand will remain 0.6% below its 2025 level. The Associated Press, citing the agency’s report, said diesel accounts for 25% of the expected decline in demand in 2026. This comes amid higher fuel prices, limited supplies and weaker economic expectations. In September, the agency warned that continued constraints on Gulf supplies and depleted commercial inventories could require higher prices and further demand declines to balance the market. The next announced diplomatic step is for the four countries to continue their talks, with no date or location set for a new meeting.