Brent falls 3.2% to $109.75 as Iran-Qatar talks continue
Key Facts
Brent crude futures fell $3.68, or 3.2%, to $109.75 a barrel by 0407 GMT on November 2, while West Texas Intermediate fell $3.43, or 3.3%, to $100.69, Reuters reported. The decline came as Iran and Qatar continued talks aimed at ending the war, with markets watching for any diplomatic progress. Tim Waterer of KCM Trade said diplomatic hopes and the absence of any tangible military escalation over the weekend "have taken some immediate heat out of prices for now." Brent had ended October at its highest level in six months, amid concerns that the U.S.-Iran conflict could escalate again after the U.S. midterm elections scheduled for Tuesday. Crude fell in early trading even though prices remained elevated compared with pre-war levels.
Iranian Foreign Minister Abbas Araghchi said ongoing, advanced talks were aimed at continuing consultations with Qatari mediators, and affirmed Tehran's readiness for "defense and diplomacy." The Associated Press reported that Iranian negotiators in Qatar were discussing a proposal that could allow the Strait of Hormuz to reopen within two days if the United States met several conditions. The report did not disclose details of those conditions, and Araghchi said there were no direct talks with Washington. The proposal puts reopening the strait at the heart of mediation efforts, but implementation remains tied to the U.S. response to Iran's conditions. Two Iranian officials later said the Iranian delegation had left Qatar after days of discussions, while messages continued to be exchanged with the United States through the mediator.
Diplomatic hopes are countered by renewed concerns over the security of regional energy flows. The International Energy Agency said escalating attacks on energy infrastructure and tanker traffic threaten supply recovery gains, while October saw the highest number of reported attacks on commercial vessels in the Strait of Hormuz since March, according to the Associated Press. By contrast, crude exports from Gulf producers rose by 4.4 million barrels per day to 13.9 million in September from the previous month, the IEA said. Oil flows through the Strait of Hormuz increased by 3.7 million barrels per day to 10.9 million, with ship-to-ship transfers in the Gulf of Oman contributing. These figures reflect the recovery in flows in September, while the safety of infrastructure and tankers remains a concern.
The IEA said Brent futures had risen 13% since the start of September to about $107 a barrel at the time its October report was prepared. It also said observed global inventories were 509 million barrels below pre-war levels at the end of September, and onshore stocks were at their lowest level since at least 2016. Observed global inventories fell by 10 million barrels in September, as an increase in oil at sea was offset by a 113 million-barrel decline in onshore stocks. The agency forecast that the oil market would remain in deficit through the end of the year, with supply constraints on middle distillates continuing through 2027. It also forecast that global oil demand would fall by 2.6 million barrels per day in 2026 to 102.4 million, as high prices and a deteriorating economic outlook in some countries weigh on consumption.
EL7's Brent closing data show a decline from $113.43 on October 30 to $110.36 on November 2; these are two separate daily closes and differ from prices Reuters tracked during trading. In an update at 1020 GMT on November 2, Reuters reported that Brent had fallen $4.79, or 4.2%, to $108.64, while West Texas Intermediate had declined $4.41 to $99.71. In a broader comparison, the Associated Press said Brent was at $109.01, down 3.9% in Asian trading, but still above about $72 in late February before the war. China is set to send a special envoy to Iran, Oman and Saudi Arabia in early to mid-November, a Chinese Foreign Ministry spokesperson said.