Brent Slips Below $112 as Iran Talks Ease Oil Fears

Brent crude slipped below $112 a barrel on Monday, falling from four-year highs as investors weighed new diplomacy against attacks on ships near the Strait of Hormuz. U.S. crude also eased toward $102. The drop reflects the market’s split mood: traders see a possible way out of the conflict, but the waterway carrying vital energy shipments remains dangerous. ^2,4

That possible way out is being discussed in Qatar. Qatari and Iranian officials continued talks for a third day, seeking an agreement to end the U.S.-Israel war on Iran before the U.S. midterm elections on Nov. 3. President Donald Trump said Washington would not launch more attacks before the vote, citing progress in negotiations, but he has not ruled out military action afterward. OPEC+ also agreed over the weekend to keep its December production targets unchanged. ^2,5

Those unchanged targets leave diplomacy and security in the Gulf as the main forces shaping prices. The Strait of Hormuz links the Persian Gulf with the Gulf of Oman, making attacks there a direct concern for ships carrying energy supplies. A British group tracking ship safety reported that a vessel passing through the strait was hit by a projectile on Nov. 1; an LNG carrier was attacked on Oct. 30. Some ships have reportedly switched off tracking devices to reduce the risk of being targeted. ¹

That shipping risk could quickly push oil prices back up if talks fail or attacks spread. For countries such as India that rely on imports, a sustained fall in crude prices would ease pressure on fuel costs and inflation. The sources do not say how long the decline will last. The immediate markers are the Nov. 3 U.S. election and whether Washington and Tehran turn their discussions into an agreement. ^2,6