Oil prices dropped more than 1% on Monday as Iranian and Qatari officials continued their third day of talks aimed at ending the U.S.-Israeli war on Iran. Brent crude futures fell $1.59, or 1.40%, to $111.84 a barrel by 0011 GMT, while U.S. West Texas Intermediate crude declined $1.56, or 1.50%, to $102.56 a barrel.
The decline came after Brent crude ended October at its highest level in six months, driven by concerns over potential escalation in the U.S.-Iran conflict following the midterm elections. Tim Waterer, chief market analyst at KCM Trade, noted that oil prices were experiencing a technical pullback after strong gains last week. He attributed the easing of prices to lingering hopes of diplomatic progress and the absence of significant military escalation over the weekend.
However, Waterer cautioned that the market remained watchful for any increase in rhetoric around Iran, which could push Brent crude toward $120 after the midterm elections. Iranian Foreign Minister Abbas Araqchi stated that the ongoing talks with Qatari mediators were progressing, with Tehran prepared for both defense and diplomacy.
The talks come amid heightened tensions in the Strait of Hormuz, where attacks on oil tankers have driven up global energy and shipping costs. In October, Saudi Arabia increased crude exports despite attacks by Iran-aligned Yemeni Houthis on its energy infrastructure. Meanwhile, OPEC+ confirmed steady December production targets, with no policy adjustments expected until next year due to export disruptions from the Iran war.