EL7.AI
BondsMedium•2 November 2026•
3 min read

Oil Falls 4.2% to $108.66, Boosting Demand for Indian Bonds

Key Facts

1Brent fell 4.2% to $108.66 a barrel by 12:50 GMT on November 2.
2West Texas Intermediate fell 4.1% to $99.83 a barrel at the same time.
3Iran said its proposed plan to reopen the Strait of Hormuz and resume talks would take two days, instead of 7 days.
4The IMF estimated that a $10-a-barrel increase in oil prices sustained for a year adds about 0.4% of GDP to India's current-account deficit.
5The Energy Information Administration set November 12 for publication of its report for the week ended November 6, 2026.

Demand for Indian government bonds rebounded at the start of trading on November 2 as lower oil prices eased some inflation and supply-related pressure, Reuters reported. The move came as Iranian and Qatari officials continued talks on a deal to end the U.S.-Israeli war on Iran. Reuters said a drop of more than 4% in crude brought some buyers back to the Indian bond market. Traders are also watching the U.S. midterm elections for indications about the course of the war, oil prices and global yields. The interest links developments in the Middle East with energy costs in India, a major oil importer.

By 12:50 GMT, Brent futures had fallen $4.77, or 4.2%, to $108.66 a barrel. West Texas Intermediate fell $4.29, or 4.1%, to $99.83. The move reflected a decline in the immediate risk premium as talks on ending the war continued, Reuters reported. An analyst at KCM Trade said lingering hopes of diplomatic progress, alongside the absence of any tangible military escalation over the weekend, had "taken some immediate heat out of prices for now." These factors remained tied to market expectations, while the comment did not confirm that a deal had been reached.

Iran said on November 2 that it had a two-day plan to reopen the Strait of Hormuz and resume nuclear talks with the United States, provided Washington met its demands, the Associated Press reported. Tehran had previously discussed a 7-day process, making the announcement a shortening of the proposed timeline. The agency said ships transiting the strait after its reopening would follow a route agreed between Iran and Oman and move under Iranian supervision. Iranian officials' demands also include lifting sanctions on oil sales and a ceasefire that includes Lebanon. The plan remains a basis for negotiations through mediators, while the Iranian foreign ministry spokesman gave no indication that Washington had accepted it.

Crude prices remain high compared with last year despite falling in Monday's session. Brent stood at $108.68 a barrel, down 4.2%, compared with about $65 at the same time in 2025, the Associated Press reported. That gap underscores India's sensitivity to any sustained change in the cost of oil imports. The International Monetary Fund estimated that a $10-a-barrel increase in oil prices sustained for a year adds about 0.4% of GDP to India's current-account deficit. Lower crude prices could therefore ease inflation, current-account and fiscal pressures, according to a Reuters report, and may also curb expectations of sharp monetary tightening; these are potential channels, not certain outcomes.

Attention will next turn to energy developments and U.S. data, as markets count the midterm elections among the indicators that could affect expectations for a ceasefire, oil prices and global yields, Reuters reported. On crude data, the U.S. Energy Information Administration set November 12 for publication of its weekly report for the week ended November 6. The agency said the timing was related to the Veterans Day holiday. The schedule follows a session in which crude fell sharply, while supply routes through the Strait of Hormuz and the positions of Washington and Tehran remain in focus for investors. Any change in expectations for Indian monetary policy will depend on the course of economic pressures, not on a one-day decline in oil prices.