Brent Falls 3.2% to $109.75 as Qatar-Iran Talks Continue
Key Facts
Brent crude fell 3.2% to $109.75 a barrel, while West Texas Intermediate dropped 3.3% to $100.69, in Monday, Nov. 2 trading as of 0407 GMT, according to Reuters data. The decline came after Iranian and Qatari officials held a third consecutive day of talks seeking an agreement to end the U.S.-Israeli war on Iran. The talks do not mean an agreement has been reached or hostilities have ceased; their aim remained to advance diplomatic efforts. The price decline kept supply concerns in focus for traders amid disruption to oil tanker traffic through the Strait of Hormuz. At the same time, the possibility of escalation after the U.S. midterm elections continued to influence the course of crude prices.
Tim Waterer, chief market analyst at KCM Trade, described the drop as a technical pullback after strong gains the previous week. He said, "Ongoing hopes of some form of diplomatic progress, along with the absence of any significant military escalation over the weekend, have eased some of the immediate pressure on prices for now." The assessment reflects the effect of diplomatic expectations and relative calm over the weekend on market moves, without resolving the course of the conflict. Brent ended October at its highest level in six months amid concerns that the conflict between the United States and Iran could flare up again after the U.S. midterm elections. Monday's drop therefore followed a period of rising prices, while military and political risks remained.
Iranian Foreign Minister Abbas Araghchi said the purpose of the "ongoing and advanced" talks was to continue consultations with Qatari mediators, adding that Tehran was ready for "defense and diplomacy." The Associated Press reported that Iranian negotiators were in Qatar to discuss a proposal that could allow the Strait of Hormuz to reopen soon. The news agency also quoted Araghchi as saying that direct talks with the United States were not taking place. In a statement reported on Saturday, Oct. 31, the agency said the proposal could allow the strait to reopen within two days if the United States met Iranian conditions. These statements remain part of the negotiations, with no indication of a final agreement in the information provided.
Diplomatic hopes are set against fragile shipping through the Gulf. Reuters reported that attacks on oil tankers transiting the Strait of Hormuz are raising energy and shipping costs globally. Qatar's gas tanker company Nakilat said its vessel Al Reem was damaged by unidentified objects in the Arabian Gulf on Friday evening, with no crew injuries or environmental impact, and remained operational, according to the Associated Press. A UAE presidential adviser expressed hope that a diplomatic breakthrough could be achieved through Qatar-led mediation to avoid a new round of confrontation between the United States and Iran. But continued risks to tankers keep transit security and shipping costs among the factors monitored by energy markets. The price outlook remains tied to developments in the negotiations and events in the strait.
EL7 data show Brent closed at $113.43 a barrel on Oct. 30, compared with a close of $110.8 on Oct. 29. These levels put Monday's decline in the context of market moves after the end-of-week close, with different measurement times for closing prices and the quote recorded at 0407 GMT. ING analysts said the question after the midterm elections is whether the market will continue to price in a large geopolitical risk premium or whether that premium will begin to gradually recede. Reuters quoted a KCM Trade analyst as warning that escalating rhetoric on Iran could push Brent toward $120 after the elections. This reflects the possibility of price moves in either direction depending on political and security developments.
On the supply side, the seven OPEC+ participating countries decided to keep December production at the level required for September 2026, according to the organization's statement issued on Nov. 1. OPEC set its next meeting for Nov. 29, 2026. The decision leaves December production unchanged from the September benchmark as crude retreats on hopes tied to the talks. The date of the next meeting provides another point at which to track participating countries' production decisions. Until then, supply policy intersects with developments in mediation and transit risks in the Strait of Hormuz in shaping the market's direction.