Oil falls after rising to six-month high: market assesses Iran conflict risks
World oil prices fell on Monday, October 26, after the previous week closed near six-month highs. Investors took profits after a prolonged rise in quotations and are assessing the prospects for US-Iran negotiations. Meanwhile, the threat of new strikes on Middle East oil infrastructure limits price declines.
This was reported by Bloomberg and The Wall Street Journal.
During morning trading, Brent crude futures fell 1.8% to $114.57 per barrel. West Texas Intermediate (WTI) lost 2.2%, trading at $100.96.
Last week, Brent rose more than 6%, ending trading near $117 per barrel. The rise was supported by fears of new attacks on Saudi oil infrastructure and a possible resumption of large-scale hostilities between the US and Iran.
Market corrects prices after prolonged growth
Technical factors were one of the reasons for the current decline in quotations. According to Bloomberg, at the end of last week, Brent's 14-day relative strength index (RSI) exceeded 74 points.
Market participants often consider this indicator above 70 points as a sign of an overbought asset. This means that after the rapid rise in oil prices, the probability of a short-term correction increases, although the indicator itself does not guarantee a further price decline.
Commonwealth Bank of Australia analyst Vivek Dhar also noted the gradual recovery of oil supplies from the Middle East. According to his estimates, current export volumes may be sufficient to replenish global oil and product inventories, easing fears of an immediate deficit.
At the same time, since the beginning of 2026, Brent has risen more than 85%. The main reasons remain the Middle East war, attacks on energy facilities, and disruptions in oil transportation.
US announces resumption of significant transit through Hormuz
New data from the US Central Command (CENTCOM) on the operation of the Strait of Hormuz became an additional factor for the oil market.
According to the US military, since the beginning of summer, with their support, Gulf countries have exported more than 1.5 billion barrels of oil through this route. Over the past six months, more than 3,000 commercial vessels have passed through the strait.
CENTCOM also claims that more than 95% of vessels transiting the Strait of Hormuz in recent months have done so safely.
These data indicate the restoration of a significant portion of maritime traffic despite military tensions. However, the threat of tanker attacks has not disappeared, and shipowners continue to account for increased risks when planning routes.
Oil remains dependent on decisions of Washington and Tehran
US President Donald Trump said in an interview with Fox News on October 25 that the moment to make a decision on Iran is approaching. According to him, Washington must choose between reaching a deal with Tehran and resuming military strikes.
Iranian Foreign Minister Abbas Araghchi, for his part, expressed hope that the US would refrain from a new attack if it acted rationally.
Despite such statements, there are no signs of a final resolution of the conflict. Additional risks are created by Iran-backed Yemeni Houthis, who continue to claim attacks on Saudi Arabian facilities.
Oil market participants will also monitor the parliamentary elections in Israel on October 27, the US Federal Reserve's interest rate decision, and the US midterm elections on November 3. These events could affect both conflict prospects and investor sentiment.
For Ukraine, which depends on imports of petroleum products, the current decline in crude oil prices does not yet mean a similar reduction in purchasing prices for gasoline and diesel. Fuel prices continue to be affected by refined product prices, transportation costs, and supply risks.
Further price dynamics will largely depend on whether current Gulf export volumes are maintained and whether the US and Iran can avoid a new escalation.
Based on materials from: Bloomberg, The Wall Street Journal, Al Jazeera
