Brent Slips Below $115 as Iran Talks Ease Supply Fears

Brent slipped below $115 a barrel in early Asian trading on Tuesday, retreating from a six-month high as diplomatic efforts raised hopes that the US-Iran war would not spread. The benchmark traded at $114.99, while US West Texas Intermediate hovered near $101. The drop was modest amid a conflict that has already caused sharp price swings. ⁹

The dip followed talks in Tehran on Monday, where officials from Saudi Arabia, Turkey and Pakistan met Iranian officials to ease regional tensions. Saudi Arabia said the visit aimed to open channels for talks and prevent renewed military escalation. Iranian state media said the four countries agreed to continue discussions on peace and security. Their diplomacy eased immediate fears of supply disruptions, but did not resolve the conflict. ¹¹

The supply risk matters because the Strait of Hormuz carried about one-fifth of the world’s energy supplies before the war began in February. Iranian attacks on tankers near the strait helped push Brent above $117 last week, while Houthi attacks on Saudi Arabia have kept traders wary. The Houthis are aligned with Iran. October has been the worst month for attacks on commercial shipping in the strait and nearby waters, according to a Washington-based think tank. For oil buyers, that means a fragile calm can still leave prices high. ²

Prices now hinge on whether talks continue and whether attacks disrupt shipping or Saudi oil sites. A separate proposal, reported by Bloomberg, would reopen Hormuz in exchange for Washington lifting restrictions within seven days, though sources do not say it has been accepted. Israel’s election takes place Tuesday, and the US Federal Reserve is due to announce its policy decision Wednesday. Those events add to the challenges facing markets already watching the next move in the conflict. ⁹