Rubio Rules Out Breakthrough with Iran as Brent Falls 1.7% to $96.67
Key Facts
U.S. Secretary of State Marco Rubio ruled out the prospect of talks with Iran nearing a breakthrough as oil prices fell on the morning of November 9. The Associated Press quoted him as saying, "I can't say we're on the verge of a breakthrough." Rubio described the talks as unproductive, attributing that to Iranian demands he considered some unacceptable, excessive and unrealistic. By 08:30 GMT, Brent crude had fallen 1.7% to $96.67 a barrel, while West Texas Intermediate was down 1% to $89.87, according to Reuters. That sets Rubio's pessimistic assessment of the negotiations against President Donald Trump's indication that renewed strikes could be avoided if progress is made and a strong deal is reached.
Rubio said some Iranian demands were "excessive, ridiculous and unrealistic," without declaring the negotiations collapsed or at an impasse. Tehran was reviewing proposals submitted by Qatar, the main mediator, to address disagreements with Washington over the nuclear program, according to the Associated Press. The reported Iranian conditions include ending the U.S. blockade of Iranian ports, lifting sanctions and releasing frozen assets. The demands also include compensation for war damage and a halt to hostilities in the region, including Israeli operations in Lebanon. These issues reveal the breadth of the disagreements Qatar's mediation must address, with Iran's nuclear program at the center of one area of dispute.
Trump set a condition for avoiding a return to military action, telling CNN that renewed strikes were "highly unlikely" as long as the United States sees progress in negotiations with Tehran and a "strong deal" is signed. At the same time, he said the United States had identified infrastructure to target if operations resumed, including 38 bridges, the Associated Press reported, citing his comments on Sunday, November 8. The report said the U.S. military had carried out limited strikes on Iran, including against its air defenses, at least twice during the previous week. U.S. forces also fired on and disabled a commercial vessel on Saturday, according to the U.S. account, which said it had tried to breach the naval blockade. These events keep the military threat in place alongside the negotiating track, despite Trump's remarks that strikes may not be necessary if progress is made.
Brent fell on November 9 after dropping 16% during the previous week, its biggest weekly decline since the start of the COVID-19 pandemic, according to Reuters. Analyst Sugandha Sachdeva said the oil market "appears to be pricing in a relatively optimistic de-escalation scenario," despite the lack of a comprehensive agreement between Washington and Tehran. She added that oil could retain a geopolitical risk premium unless a diplomatic breakthrough is achieved and shipping through the Strait of Hormuz improves on a sustained basis. One-fifth of the world's oil passed through the strait before the war, according to the Associated Press, which linked shipping disruptions to higher energy prices. The state of navigation through the strait therefore remains an important factor in assessing risks to energy supplies, even as prices fell on Monday morning.
JPMorgan estimates reported by Reuters indicate that the global oil surplus reached 1.1 million barrels per day in September and widened to 1.4 million barrels per day in October. The estimates attributed the widening surplus to recovering flows, higher production and weak demand. On the nuclear front, the Associated Press quoted the International Atomic Energy Agency as saying Iran had 440.9 kilograms of uranium enriched to 60% purity. These issues add context to the difficulty of the negotiations, as conditions for lifting economic and security restrictions overlap with disputes over the nuclear program and energy supplies. Rubio also defended Trump's decision to wage war, saying it may be necessary to confront security challenges even when doing so is unpopular.
Rubio was due to travel to Paris to attend a meeting of G7 foreign ministers, while Trump was scheduled to meet Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani at the White House on Monday, according to the Associated Press. The announced meeting comes as Iran reviews Qatar's proposals related to the nuclear dispute, while Rubio sees the negotiations as no closer to a breakthrough. The report quoted Trump as saying he was not seeking to escalate the war after the elections, adding: "I'm not looking for that, and I don't think there's any reason for that." The stated U.S. position on avoiding strikes depends on continued progress in negotiations and reaching a strong deal. The Associated Press report did not announce a timetable for an agreement or a final outcome for the talks.