Brent falls 1.7% to $114.70 as WTI drops 2.5%

Key Facts

Brent futures fell $2.03, or 1.7%, to $114.70 a barrel at 10:37 a.m. U.S. Eastern time on Monday, October 26, according to Reuters. West Texas Intermediate futures fell $2.60, or 2.5%, to $100.71 a barrel at the same time. Reuters attributed the decline in oil prices to hopes of an easing in fighting between the United States and Iran. But continued attacks on Saudi Arabia, a major producer, kept investors cautious. The moves followed strong weekly gains for both benchmarks, while daily closing data for Brent and WTI showed lower levels than Friday's close.

During Monday's session, Brent fell in the morning, approaching $109 a barrel, before erasing its losses and returning to $111.73, according to The Associated Press. The crude, the agency said, remained near the upper end of its range since the start of the war with Iran. That describes an intraday rebound, but does not change the daily closing direction recorded in EL7 data. Brent closed at $116.08 on October 26, compared with $116.72 on October 23. WTI also ended the session at $102.31, below its Friday close of $103.27.

Gains in the previous week had lifted Brent 6% and WTI 2.3% in the week ended October 23, according to Reuters. Prices settled on Friday more than $3 a barrel above their previous levels, the report said. EL7 data show Brent rose from a close of $108.82 on October 21 to $116.72 on October 23. The close then fell to $116.08 on October 26. WTI, over the same period from Friday's close to Monday's, fell from $103.27 to $102.31.

On de-escalation efforts, Saudi Arabia, Turkey and Pakistan were preparing to hold talks with Iranian officials in Tehran, and Riyadh said opening channels for negotiations was important, according to Reuters. Qatari mediators also traveled to Tehran on Sunday seeking to reduce regional tensions in coordination with the United States, according to an official familiar with the matter cited by the agency. In contrast, the Houthis said they had targeted pumping stations on Saudi Arabia's East-West oil pipeline and Riyadh airport. Saudi Arabia said it intercepted more missiles and drones on Sunday. These developments, Reuters said, kept investors on edge despite hopes of de-escalation.

Supply concerns extended to shipping, as companies adapted to trade disruption through the Strait of Hormuz and the Bab el-Mandeb Strait because of the war, according to Reuters. Citing data from the Washington Institute for Near East Policy, the report said October was the worst month for attacks on commercial shipping in the Strait of Hormuz and nearby waterways. In this environment, an analyst at PVM Oil Associates said dips in Brent could find buyers if prices returned to the previous week's lows. He added that the correction had not reached levels at which bulls would abandon their hopes. That remains the analyst's attributed view, while prices were lower when Reuters recorded them.

On the supply outlook, International Energy Agency chief Fatih Birol said on Monday at an event in Singapore that he did not expect energy markets in 2027 to return to pre-Iran war levels. Saudi Arabia and Singapore also announced that Aramco would begin storing crude oil in Singapore in the second half of 2027. The move aims to strengthen the resilience of the regional supply chain, according to Reuters. The announcements come as companies continue to adapt to the shipping disruptions cited in the report. The expected talks in Tehran remain among the specific developments cited by sources in the context of efforts to reduce tensions.