Brent falls 7.5% to $104.98 as Iran makes conditional offer on Hormuz
Key Facts
Iran said on November 2 that it had a plan to reopen the Strait of Hormuz and resume nuclear talks with the United States within two days if Washington met Tehran’s demands. In an Associated Press update that day, Brent crude fell about 7.5% to near $104.98 a barrel, amid signs of diplomatic progress. But Iran’s announcement is conditional and does not mean shipping has actually resumed through the strait. The available information also does not establish that the proposal alone caused the move in oil prices. The developments put the supply route through one of the world’s most important energy corridors at the center of negotiations.
The announcement marks a shortening of the timeline Iran previously set out, saying implementation could take a week if the United States met 7 conditions. Those conditions included lifting the blockade of Iranian ports, according to the Associated Press’s account of Tehran’s earlier position. Iran now says implementation can begin within two days if its demands are met. The change sets a shorter timeline, but the plan remains tied to political and security conditions. The available information does not say that those conditions have been met or that an agreement on them has been completed.
Iran’s stated demands include lifting U.S. sanctions on Iranian oil sales, as well as a ceasefire covering Lebanon, according to statements by Iranian officials cited by the agency. Iranian Foreign Ministry spokesman Esmail Baghaei said the plan remains the basis for negotiations with Washington through mediators, despite the shorter implementation timeline. The plan therefore remains part of a broader negotiating process, not a separate announcement from Tehran’s demands. Iran also said ships crossing the strait after it reopens will follow a route agreed by Iran and Oman. There has been no report that the route has come into effect.
The scale of energy flows through the strait underscores the significance of any change in shipping. Average oil flows through Hormuz reached about 20 million barrels a day in 2024, equivalent to roughly 20% of global petroleum liquids consumption, according to the U.S. Energy Information Administration. Flows through the strait also accounted for more than a quarter of global seaborne oil trade in 2024 and the first quarter of 2025, and about one-fifth of global oil and petroleum product consumption. The figures show the scale of trade and energy tied to the corridor, while Iran’s announced plan remains conditional. Iran has not said that flows have returned to normal levels.
On the diplomatic track, two regional officials told the Associated Press that mediators are seeking a framework under which Iran would stop attacking ships in the Strait of Hormuz in exchange for the United States lifting its blockade of Iranian ports. They said another round of talks is scheduled during the week that began on November 2. The effort aligns with Baghaei’s statement that Tehran’s plan remains the basis for negotiations through mediators. The officials did not announce that a final framework had been reached or specify an expected outcome from the talks. A halt to attacks and the lifting of the blockade therefore remain subjects for negotiation, not measures that have been implemented.
Meanwhile, the Associated Press reported that Israeli Prime Minister Benjamin Netanyahu is pushing for a new wave of strikes on Iran after the U.S. midterm elections scheduled for November 3. The agency said President Donald Trump had not committed to military action. The developments place signs of negotiations alongside the possibility of a new escalation, without meaning that strikes have been decided or that Washington will take part. On a parallel regional track, China said on November 2 that it plans to send a special envoy to Iran, Oman and Saudi Arabia in early to mid-November. It said the mission will focus on reducing tensions and promoting regional stability.
On the supply front, the seven countries participating in the OPEC+ agreement kept December’s required production levels unchanged from those set for September 2026, after a virtual meeting on November 1 to review global market conditions and prospects. The group said it would continue holding monthly meetings to review market conditions and set November 29 for its next meeting. The decision comes amid developments around Hormuz and negotiating efforts, but does not change the required production levels for December, according to the statement. The next milestones are mediator talks during the week, followed by the seven countries’ meeting at the end of the month. The Chinese mission is scheduled to begin in early to mid-November.