Oil falls more than 4% as hopes of progress in Iran talks ease fears of further supply disruption
Brent crude fell 4.2% to $108.64 a barrel and US crude fell 4.2% to $99.71 on Monday as Qatar-mediated talks on ending the US-Israeli war on Iran raised hopes that Middle East supply disruptions could ease.
Oil prices fell by more than 4 per cent on Monday as talks between Iranian and Qatari officials on a deal to end the US-Israeli war on Iran raised hopes that the disruption to Middle East supplies could begin to ease. The fall was the market’s clearest reaction yet to the diplomatic opening reported over the weekend, and it came after a month in which prices had climbed sharply on fears that the conflict could escalate again.
The scale of the move was set out in the updated afternoon figures. Brent crude futures fell $4.79, or 4.2 per cent, to $108.64 a barrel by 1020 GMT, while US West Texas Intermediate crude traded at $99.71, down $4.41 or 4.2 per cent. Earlier in the session the fall had been slightly smaller, with Brent down $4.20, or 3.7 per cent, to $109.23 a barrel by 0900 GMT and West Texas Intermediate down $3.98, or 3.8 per cent, to $100.14 — a progression that shows the selling gathered pace through the morning rather than fading after the opening. Figures checked on Monday afternoon, 2 November 2026 (Pakistan time).
The trigger was the state of the Qatar-mediated talks. Iranian negotiators left Doha on Sunday after three days of discussions, and an official briefed on the talks told Reuters on Monday that a draft proposal for a deal with the United States is now being circulated for feedback, with a follow-up meeting possible. Iranian foreign minister Abbas Araghchi said on Sunday that the purpose of the “ongoing and progressing” talks was to continue consultations with the Qatari mediators, and that Tehran remained prepared for “both defence and diplomacy”. For traders, the combination of a draft in circulation and no fresh military escalation over the weekend was enough to take some of the immediate fear out of prices.
Market analysts described the move in those terms. “The new month brought with it renewed hopes of a breakthrough in the Iranian stalemate,” said Tamas Varga of oil broker PVM. Tim Waterer, chief market analyst at KCM Trade, put it more cautiously, saying that “lingering hopes of some form of diplomatic progress, combined with the absence of any meaningful military escalation over the weekend, have taken some of the immediate heat out of prices for now”. The qualification matters: neither analyst described the fall as the end of the war premium in oil prices, only as a cooling of the most urgent fears.
That context is important because October had pushed prices in the opposite direction. Brent ended October at its highest level in six months, amid concerns that the US-Iran conflict could escalate again after Tuesday’s US midterm elections. The elections now sit directly in the path of the talks: President Donald Trump has said the United States would not launch new attacks on Iran before the vote, while also not ruling out further military action afterwards, and reports over the weekend suggested differences between Washington and Jerusalem over whether to strike immediately after the elections or to let negotiations play out. Traders are therefore treating the current calm as conditional, not settled.
The physical backdrop to the price move is the Strait of Hormuz and the shipping lanes around it. The talks follow a recent increase in attacks on oil tankers transiting the strait, and the conflict has already disrupted Gulf shipments and contributed to a serious energy squeeze. At the same time, there are signs that some flows are holding up: in October, Saudi Arabia increased crude exports compared with September despite attacks by the Iran-aligned Yemeni Houthis on its energy infrastructure, according to two of three ship-tracking companies cited by Reuters, and there are also signs of shipments rising from some major exporters. That mixed picture — attacks continuing, but exports not collapsing — helps explain why a diplomatic signal can move prices so sharply in either direction.
The longer-term supply picture remains tight, which is why the fall should not be read as a return to normal. The chief executive of Abu Dhabi’s state-owned oil company ADNOC said on Monday at the ADIPEC energy conference that the world has drained nearly 1 billion barrels from oil inventories since the war disrupted shipping through the Strait of Hormuz, eroding the buffers that normally absorb a supply shock. A market with thinner stocks is more sensitive to headlines, so a hopeful diplomatic signal can produce a large fall — and a hostile one could just as quickly produce a large rise.
That two-sided risk is also the view of Goldman Sachs, which raised its oil price forecasts on Sunday because of elevated supply risks. The bank said Brent could jump to $140 in 2027 if Gulf oil output stays 3.5 million barrels per day below its 2025 average, and it pointed to “intensified shipping attacks, damage to oil infrastructure, and a more persistent risk premium” as the key triggers that could push prices higher again. In other words, the same report that explains why prices fell on Monday also warns that the fall could reverse if the diplomacy stalls or the shipping attacks intensify.
What happens next will therefore be decided by events that have not yet occurred. The first test is whether Washington responds to the draft proposal now in circulation, and in what terms. The second is whether a follow-up meeting is actually convened. The third is what happens on the water and in the region over the coming days, particularly around the US midterm elections, when the political calculations on both sides may shift. Until those answers arrive, the honest summary is that Monday’s fall reflects hope, not a settlement: prices have eased because traders see a possible path to easing supply disruption, but the war, the blockade and the shipping risks that drove prices to a six-month high remain in place.
This post is market news information only, not financial advice.
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