Oil prices reacted to the postponement of possible U.S. strikes on Iran
World oil prices sharply fell on Monday, November 2, after reports of U.S. President Donald Trump's intention to continue diplomatic negotiations with Iran before deciding on new military strikes. Brent lost about 3%, offsetting last week's late growth.
This was reported by Bloomberg. According to the agency, during morning trading, Brent futures fell to about $110 per barrel, while U.S. West Texas Intermediate (WTI) traded near $101.
The main reason for the decline was a publication by Axios about Trump's telephone conversation with Israeli Prime Minister Benjamin Netanyahu that took place on Saturday, October 31.
According to American and Israeli sources cited by the publication, Netanyahu is pushing for renewed strikes on Iran immediately after the U.S. Congressional midterm elections on November 3. In contrast, Trump currently leans toward continuing diplomatic efforts, hoping to reach agreements with Tehran without a new large-scale military escalation.
Axios' interlocutors describe the leaders' talks as difficult. The Israeli leadership is concerned about Washington's intention to give diplomacy additional time, while the American administration continues to consider both negotiation and military scenarios simultaneously.
Earlier, U.S. Secretary of State Marco Rubio stated that a final decision on new attacks on Iran has not been made. According to him, the American president prefers a diplomatic resolution of the conflict.
The negotiations continue with the mediation of Qatar. Representatives of this country held further consultations with the Iranian delegation, trying to arrange the resumption of direct contacts between Washington and Tehran. At the same time, Iranian Foreign Minister Abbas Araghchi noted that no agreements have been reached yet.
Despite the drop in oil prices, the situation in the Middle East remains tense. Over the weekend, there were reports of new attacks on commercial vessels in the Strait of Hormuz area. In particular, the British UK Maritime Trade Operations reported a ship hit by unknown artillery on Sunday, November 1.
A significant portion of the world's seaborne oil and liquefied natural gas exports passes through the Strait of Hormuz. Although crude oil shipments from the Persian Gulf have approached pre-war levels, supplies of petroleum products remain limited.
Analysts warn that the current price decline may be temporary. Rabobank senior energy strategist Florence Schmit believes the threat of a new military escalation in the Middle East persists and could again push oil prices up.
In October, Brent reached a six-month high amid fears over supply security. Additional pressure on the market comes from strikes on Russian oil refineries, which limit the availability of petroleum products and contribute to higher diesel fuel prices.
Recall that Goldman Sachs recently raised its forecast for Brent price in December 2026 to $105 per barrel, and the average estimate for 2027 to $88. The bank explained the revision by high risks of supply disruptions due to conflicts in the Middle East and Russia's war against Ukraine.
Thus, the oil market is currently reacting to the possible continuation of U.S.-Iran negotiations, but the lack of final agreements and the danger of new attacks on shipping remain factors of price instability.
