Energy
Oil Falls About 4% as Iran Hormuz Talks in Qatar and Trump's Patience Ease Supply Fears
Image: SatyaPrem via Pixabay
Brent slipped back toward $109 a barrel early Monday, though Gulf shipping attacks and a larger risk premium keep forecasts elevated.
By Noris Ortiz ·
Oil prices fell sharply in early Monday trading as traders weighed signs that Washington and Tehran may give diplomacy more room before the next phase of the conflict. Brent crude was down 3.9% at $109.01 a barrel and U.S. benchmark crude was down 4.1% at $99.82 as of about 6 a.m. ET, according to the Associated Press [1]. Brent remains far above the roughly $72 level it held in late February, before the war began, the same report noted [1].
The immediate driver is a diplomatic track in Qatar. Iranian negotiators are discussing a proposal that could reopen the Strait of Hormuz within two days if the United States meets several conditions, the AP reported, with Iran's top diplomat saying no direct talks with Washington are under way [1]. Euronews reported that Foreign Minister Abbas Araghchi said the outcome depends on how the U.S. answers Iran's questions, and that Tehran has previously demanded an end to the American naval blockade of its ports, relief from sanctions on its oil exports and a halt to fighting on all regional fronts [2]. The strait normally carries about a fifth of the world's oil, and shipping through it has been heavily disrupted since the war began, Euronews said [2].
On the American side, the tone has softened but not closed off the military option. Axios, as cited by The National, reported that President Donald Trump told Israeli Prime Minister Benjamin Netanyahu he wants to give diplomacy more time, and that he prefers to wait until after Tuesday's U.S. midterm elections before considering further strikes [3]. Euronews reported that Trump said the talks were going fine but described the Iranians as not very reliable, and that Secretary of State Marco Rubio said no decision has been made on renewed military action [2]. Axios also reported that Netanyahu urged Trump to resume strikes right after the midterms, according to Euronews [2].
The price drop comes against a backdrop of continued risk at sea. The UK Maritime Trade Operations centre received a report on Sunday of a projectile hitting a vessel in the Strait of Hormuz, and another ship was reported struck east of Ras Al Khafji on Saudi Arabia's Gulf coast, according to Euronews and The National [2][3]. A liquefied natural gas tanker was attacked on Friday, The National said [3].
Forecasters are not treating the pullback as the end of the rally. Brent gained about 15% in October and U.S. crude about 12%, their highest levels since April, The National reported [3]. Goldman Sachs said a geopolitical risk premium of about $27 a barrel "now explains most of October's crude price rally," and raised its year-end Brent forecast to $105 from $90, citing greater weight on escalation risk after the midterms, Euronews reported [2]. UBS expects Brent to stay near $110 at year-end, with commodity analyst Giovanni Staunovo pointing to record freight costs, limited tanker capacity and a recovery in Chinese imports [3].
For markets, the move matters beyond the energy sector. Oil has been a central input in the recent inflation debate and in central bank expectations, so a sustained drop would ease pressure on bond yields, while a collapse in talks would likely send crude higher again.
What to watch next: any readout from the Qatar discussions, whether the U.S. responds to Iran's conditions, further reports of attacks on vessels in the Gulf, and how Trump's stance shifts once the midterm vote is over.
Sources:
[1] Associated Press, "Global shares are mixed and U.S. futures advance, while oil prices fall nearly 4%", November 2, 2026. https://www.cp24.com/news/money/2026/11/02/global-shares-are-mixed-and-us-futures-advance-while-oil-prices-fall-nearly-4/
[2] Euronews, "Oil slides on Hormuz deal hopes but Trump keeps Iran strikes on the table", November 2, 2026. https://www.euronews.com/2026/11/02/oil-slides-on-hormuz-deal-hopes-but-trump-keeps-iran-strikes-on-the-table
[3] The National, "Oil prices slide more than 3% as Trump signals more time for Iran diplomacy", November 2, 2026. https://www.thenationalnews.com/business/2026/11/02/oil-prices-slide-more-than-3-as-trump-signals-more-time-for-iran-diplomacy/
This article was produced with AI assistance. It is for informational purposes only and is not financial advice. StockVolt and its authors may hold positions in securities mentioned.