Brent settles at $103.60, down 1.1%, despite supply risks

Key Facts

Brent crude settled at $103.60 a barrel on Tuesday, down 1.1% from Monday, as traders weighed hopes for diplomatic de-escalation against concerns about supply disruptions. The Associated Press reported that the price topped $107 a barrel overnight before briefly falling below $101 on Tuesday morning. The decline came as Qatar’s foreign ministry said contacts between Washington and Tehran were continuing and mediators were exchanging proposals. It said, however, that it was not possible at the time to speak of a specific breakthrough. The session’s price action highlights the market’s sensitivity to any development that could alter its assessment of regional risks or the prospects for oil flows to resume.

In Doha, a Qatari foreign ministry spokesperson said a Qatari delegation visited Tehran on Monday and held a meeting with its counterparts that lasted about three hours. They exchanged views on proposals aimed at bringing Washington and Tehran closer together. The ministry said contacts were developing and that the parties and mediators were exchanging proposals. It did not announce a specific outcome from the meeting or an agreement. The diplomatic track therefore remained a factor influencing oil prices, without providing a decisive signal at the time of an imminent settlement.

One point in the negotiations is the Strait of Hormuz, which is linked to the passage of energy supplies. The Associated Press reported that Iran offered to reopen the strait and resume talks on its nuclear program in return for the United States lifting its naval blockade of Iranian ports and waiving sanctions on oil sales, with a ceasefire to include Lebanon. These terms link maritime security and the possibility of resuming Iranian oil exports to the broader course of the conflict. The agency did not report that the parties had accepted the terms or that they had become an agreement. The prospect of improved supplies therefore remained contingent on developments in negotiations, while risks to flows persisted.

On the U.S. side, Vice President JD Vance said the president and administration were optimistic about the possibility of reaching a negotiated settlement. The Associated Press quoted him as saying: "The president and I are feeling very optimistic about the prospects of a negotiated settlement." The statement offers an indication of the administration’s position, but does not establish that the talks have made progress. On the U.S. midterm elections, polling and analyst forecasts before results emerged pointed to the possibility of Democrats winning the House, while control of the Senate remained undecided at the time. The Associated Press later reported that Democrats had won control of Congress, including both the House and Senate; that result came after the report on oil’s price moves.

For U.S. inventory data, the Energy Information Administration’s schedule sets the release of data for the week ended November 6 for Thursday, November 12, at 12:00 p.m. Eastern Time, because of the Veterans Day holiday. That means the report will not be released on November 4, as stated in the old draft. The release schedule does not include a forecast for the size of the change in inventories. The pending data will provide traders with another input in assessing the market balance, alongside developments in mediation and supply risks. The report is scheduled for the officially designated alternative release time.