Brent Closes at $115.72 as Mediation Paths Diverge and Israeli Election Results Tighten
Key Facts
Brent crude closed at $115.72 a barrel on Oct. 28, up from $113.88 the previous day, according to EL7 data. The contract settled Monday down $1.93, or 1.67%, at $113.88, according to Reuters. The decline came as markets followed mediation efforts with Iran and supply concerns linked to tensions in the Middle East. But the daily closing trend reversed in the following session, with prices showing a contrast between Monday’s fall and Wednesday’s higher close. Moves remained tied to simultaneous diplomatic developments and market signals on supply and inventories.
On the Tehran track, Reuters reported that officials from Saudi Arabia, Turkey and Pakistan met Iranian officials on Monday as part of efforts to de-escalate tensions. The agency quoted Iranian state media as saying the parties agreed to continue talks to strengthen cooperation on peace and security. Saudi Arabia said the visit aimed to open channels for negotiations to prevent a return to military escalation. The meeting was a separate track from the draft Qatar submitted to Iran and does not establish that Qatari officials took part in the Tehran meeting. A senior Iranian official said the ideas put forward by Doha were "unacceptable and do not amount to an offer," adding that Tehran’s position against showing flexibility on the nuclear issue had not changed.
On the Qatari mediation track, Doha submitted a new draft to Iran on Sunday, with the Iranian side due to respond by the end of the week, Reuters reported. An official familiar with the proposal said it set a 7-day timetable to address the concerns of Tehran and Washington and build confidence through daily steps. Bloomberg reported that Iran had shown flexibility toward a proposal to reopen the Strait of Hormuz in exchange for the lifting of the U.S. blockade within 7 days. The ideas come amid concerns that escalation could disrupt supply flows through the strait. Ole Hansen, head of commodity strategy at Saxo Bank, said prices would need clear statements from all sides that the situation was calming and freedom of movement could be restored before returning to lower levels. He added that traders needed signals allowing them to confirm transit was stable, not negotiating proposals alone.
Turnout in Israel’s election reached 77.7% of eligible voters, the highest since 1999, according to the Associated Press. Preliminary results, with 85% of votes counted, showed Benjamin Netanyahu’s Likud party with 20.8%, against 16.1% for Yashar, led by Gadi Eisenkot. The results indicated that neither bloc had secured the 61 seats needed for a parliamentary majority. Eisenkot left the door open to an alliance with Arab parties under certain conditions, but some potential partners ruled that out, leaving the formation of a government unresolved. President Isaac Herzog said Wednesday that everything possible should be done to avoid another election round, warning that failure to form a majority coalition could lead to an early election at the beginning of next year.
In a separate development related to the war in Ukraine, Finnish President Alexander Stubb and Norwegian Prime Minister Jonas Gahr Støre spoke by phone with Russian President Vladimir Putin on Oct. 27. Finland’s presidency said the call took place in consultation with Ukraine and that the leaders spoke as representatives of their countries, not on behalf of all Europe. This track differed from mediation efforts related to Iran, as the call concerned the Russia-Ukraine war. The diplomatic moves coincided with markets monitoring U.S. inventory data and upcoming political and economic dates. U.S. crude inventories fell by 1.9 million barrels to 410.6 million in the week ended Oct. 23, compared with expectations for an increase of 15 thousand barrels, according to data from the Energy Information Administration.
In Wednesday trading at 11 a.m. Eastern time, Brent was at $115.66 a barrel, up $1.78, while West Texas Intermediate rose $2.48 to $102.38, according to Reuters. This intraday snapshot provides context for the market’s movement during the day, while EL7 data showed Brent’s close rising to $115.72 from $113.88. Prices had topped $117 the previous week, their highest since April, before touching $117 on Monday, according to Reuters. On the calendar, the Federal Reserve held its meeting on Oct. 27 and 28 and scheduled its news conference for Oct. 28. Bloomberg also noted that the U.S. midterm elections on Nov. 3 were a near-term milestone, after President Donald Trump hinted at the possibility of resuming strikes on Iran after the vote.
In Israel, the election commission said the count of absentee ballots would continue through Thursday evening, with official results to be certified by Nov. 4. The ongoing count meant the final distribution of seats had not been settled when preliminary results emerged, while no bloc had reached the required majority threshold based on the results available. The blocs’ ability to gather enough partners remains central to determining whether a government can be formed. Herzog has urged that another election be avoided, while the possibility of an early election remains if talks fail to produce a majority coalition. Part of the picture is expected to become clearer when the absentee ballots are fully counted on Thursday evening and the official results are certified by the legal deadline.