Crude Oil Dips 7% as Peace Talks Ease Middle East Tensions

By Adedapo Adesanya

Crude oil fell more than 7 per cent on Monday as talks between Iranian and ‌Qatari officials lifted hopes for an end to the US-Israel war with Iran, with Brent futures crashing by $8.47 or ​7.47 per cent to $104.96 a barrel, and US West Texas Intermediate (WTI) futures down by $7.50 ⁠or 7.2 per cent to $96.62 per barrel.

Discussions between Iran and the US to end their eight-month war are continuing, the Iranian government ​said on Monday, after days of talks with Qatari mediators ended with altered proposals but no breakthrough.

Iranian President Masoud Pezeshkian said Supreme Leader Ayatollah Mojtaba Khamenei had granted the government certain authorities for peace talks. Mr Pezeshkian added ​Iran “will try to resolve the problem with dialogue”, without elaborating, according to state media cited by Reuters.

The talks followed a recent increase in attacks on oil tankers passing ​the Strait of Hormuz, though there ​have also been signs ⁠of shipments rising from some major exporters.

Also, the country’s foreign minister, Mr Abbas Araghchi, said negotiators in Qatar are working on a proposal that could reopen the Strait of Hormuz in as little as two days if the US meets a series of conditions.

He said Iran, which has demanded an end to the American naval blockade of its ports, the lifting of oil sanctions and a halt to fighting on all regional fronts, is not holding direct talks with the US.

Market analysts noted that signs of progress in US-Iran talks could further push oil prices lower.

Traders have been bracing for a new escalation after Tuesday’s midterm elections in the US, after President Donald Trump was urged by Israeli Prime Minister Benjamin Netanyahu to resume strikes immediately after the vote.

In Saudi Arabia, the largest crude exporter in the Organisation of the Petroleum Exporting Countries (OPEC), exports increased in October from September despite attacks by Iran-aligned Yemeni Houthis on its energy infrastructure.

Seven key OPEC+ producers managing their collective oil production kept quotas unchanged for December when they met on Sunday.

Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman have kept their targeted output unchanged after completing in September the phased rollback of 1.65 million barrels per day of supply cuts first agreed in 2023.