Oil Falls More Than 7% as Iran-Qatar Talks Seek to End War
Key Facts
Oil prices fell more than 7% on Monday, November 2, after talks between Iranian and Qatari officials raised hopes of an agreement to end the U.S.-Israeli war on Iran and stabilize crude supplies in the Middle East, Reuters reported. By 12:24 p.m. Eastern Time, Brent futures were down $8.47, or 7.47%, at $104.96 a barrel. West Texas Intermediate fell $7.50, or 7.2%, to $96.62. In EL7’s daily closing data, Brent ended the November 2 session at $106.1, compared with $113.43 on October 30, while WTI closed at $97.46, against $104.12. Reuters linked the decline to hopes for supply stability, as no agreement had yet been reached.
An official briefed on the talks told Reuters that Iranian negotiators had held discussions with Qatari mediators over several days and that a draft proposal was being circulated, with a follow-up meeting possible. The Iranian negotiators left Doha on Sunday, according to an official familiar with the discussions. Iran’s president said the supreme leader had granted the government "certain powers" regarding peace talks, adding that Tehran would try to resolve the problem through dialogue, according to state media. The Associated Press reported that Iran announced a two-day plan to reopen the Strait of Hormuz and resume nuclear talks with the United States if Washington met its demands. The operation had initially been expected to take 7 days, but the announcement did not indicate that Washington had accepted the proposal.
The Iranian plan calls for ships to pass along a route agreed by Iran and Oman under Iranian supervision, while the stated demands include lifting sanctions on oil sales and a ceasefire covering Lebanon. The Associated Press also reported that fully reopening the strait within two days is conditional on meeting Iranian demands, including lifting the blockade of Iranian ports. The proposal puts shipping through the Strait of Hormuz at the center of negotiations, after the war disrupted traffic through it. Sultan al-Jaber, chief executive of ADNOC, said the world had drawn down nearly 1 billion barrels of inventories since shipping through the strait was disrupted. On the supply side, Saudi crude exports increased in October from September, according to two of three shipping-tracking firms, despite attacks by Iran-aligned Houthi militants on Saudi energy infrastructure.
Signs of progress drove prices lower, said Pavel Molchanov, an analyst at Raymond James, but he cautioned against excessive optimism after "false dawns" in recent months. An analyst at UBS added that concerns about an imminent escalation had pushed prices higher in the previous week, before they fell sharply at the start of the week as the diplomatic track continued. Brent ended October at its highest level in 6 months, amid fears that the conflict could escalate after the U.S. midterm elections scheduled for Tuesday. In a separate supply decision, 7 major oil-exporting countries in OPEC+ agreed to keep production steady in November, while the war had pushed Brent above $100 a barrel. Reuters said Goldman Sachs raised its price forecasts because of supply risks, citing a scenario in which Brent could reach $140 in 2027 if Gulf output remained 3.5 million barrels per day below the 2025 average.
Attention is turning to developments in the proposal and shipping through the strait, alongside a parallel Chinese diplomatic effort. The Associated Press said China would send a special envoy to Iran, Oman and Saudi Arabia in early to mid-November. In U.S. market data, the Energy Information Administration’s schedule sets November 12 as the alternate release date for its weekly report covering data for the week ended November 6, because of the Veterans Day holiday. The delayed date follows November 4, which appeared in the initial draft. The course of talks and reopening the strait remain tied to Iranian conditions that Washington has not said it would accept.