Oil prices extended their decline on Tuesday, October 27, 2026, retreating from a six-month high as diplomatic efforts eased concerns over a broader US-Iran conflict. Brent crude traded at $114.99 a barrel in early Asian trade, down nearly 1% from Monday, while US West Texas Intermediate (WTI) hovered around $101.
The drop came amid a surge in diplomatic activity, with senior officials from Saudi Arabia, Pakistan, and Turkey visiting Tehran. Iran indicated flexibility on reopening the Strait of Hormuz if Washington lifted restrictions within seven days, according to Iran's IRIB news agency. Despite some recovery in crude flows, shipping costs remained elevated due to ongoing tensions.
Geopolitical risks persisted, with reports of Hezbollah preparing for a new regional war and Saudi-led forces intercepting drones over Riyadh. US forces continued blockading Iranian ports to restrict crude exports while assisting other Gulf producers in moving oil through Hormuz.
Brent crude has surged almost 90% this year due to war-related disruptions and Houthi attacks on Saudi Arabia. The prompt spread for Brent remained in steep backwardation at about $5 a barrel on Monday, up from $3.69 a week earlier.
Investors faced a busy week ahead, with Israel's election on Tuesday and the US Federal Reserve's policy decision on Wednesday. US President Donald Trump hinted at potential strikes on Iran after the midterm elections on November 3.