KEY POINTS
- Brent fell 4.2% to $108.64 a barrel by 10:20 a.m. GMT Monday, and U.S. crude fell 4.2% to $99.71.
- A draft proposal is circulating after Iranian negotiators left talks with Qatari mediators, an official said.
- Goldman Sachs said Brent could hit $140 in 2027 if Gulf output stays 3.5 million barrels a day below its 2025 average.
Oil prices fell more than 4% on Monday as talks between Iranian and Qatari officials on ending the U.S.-Israeli war on Iran raised hopes that Middle East supply disruptions could ease.
Brent crude futures dropped $4.79, or 4.2%, to $108.64 a barrel by 10:20 a.m. GMT, Reuters reported. U.S. West Texas Intermediate crude also slid 4.2%, or $4.41, to $99.71.
Still, the drop comes from an elevated level. Brent settled at a six-month high at the end of October amid concerns that the conflict could escalate again after Tuesday’s U.S. midterm elections.
Iranian negotiators have left talks with Qatari mediators, and a draft proposal is circulating with a follow-up meeting possible, an official briefed on the discussions said. Tamas Varga of oil broker PVM said the new month brought “renewed hopes of a breakthrough in the Iranian stalemate.”
What is moving oil prices
Tim Waterer, chief market analyst at KCM Trade, said lingering diplomatic hopes and the absence of meaningful military escalation over the weekend had taken some of the immediate heat out of prices for now.
Meanwhile, Iranian Foreign Minister Abbas Araqchi said Sunday that the talks were moving forward and aimed to continue consultations with the Qatari mediators. Tehran, he added, was prepared for both defense and diplomacy.
The talks follow a recent rise in attacks on oil tankers moving through the Strait of Hormuz, although some major exporters appear to be shipping more. Saudi Arabia, for one, raised crude exports in October from September despite attacks by Yemen’s Iran-aligned Houthis on its energy infrastructure, two of three ship-tracking companies said.
Thin stocks and a warning from Goldman
The war broke out in late February, and inventories have also thinned. The world has drained nearly 1 billion barrels from stockpiles since the conflict disrupted shipping through the Strait of Hormuz, the chief executive of Abu Dhabi’s state-owned ADNOC said, according to Reuters.
Some analysts still see room for prices to climb. Goldman Sachs raised its oil price forecasts Sunday because of elevated supply risks. The bank said Brent could jump to $140 a barrel in 2027 if Gulf oil output stays 3.5 million barrels a day below its 2025 average. It also named intensified shipping attacks, damage to oil infrastructure and a more persistent risk premium as the main triggers for further gains.
Next, a follow-up meeting remains possible, the official said, and the U.S. midterm elections arrive Tuesday.
