Commodities
Oil Falls About 8% as Iran-Qatar Talks Raise Hopes of an End to the War
Brent and WTI had their steepest one-day drops in weeks after a draft peace proposal began circulating, though Tehran still ties any Hormuz reopening to the end of the US blockade.
HedgeWeekly News Desk ·
Crude oil sank on Monday as reports of progress in talks between Iranian and Qatari officials revived hopes that the US-Israeli war with Iran could end. Brent settled at $104.15 a barrel, down 8.2%, and US West Texas Intermediate settled at $95.90, down 7.9%, according to Yahoo Finance Australia's market wrap. Brent had closed October at its highest level in six months.
Iranian negotiators spent several days with Qatari mediators and left on Sunday. An official briefed on the talks said a draft proposal is circulating and a follow-up meeting is possible, Reuters reported. Foreign Minister Abbas Araqchi said the talks were ongoing and progressing, and President Masoud Pezeshkian said the Supreme Leader had given the government certain authorities for peace talks. A Foreign Ministry spokesman said, however, that the Strait of Hormuz cannot reopen until the US naval blockade ends and Iran's demands are met.
The move spread to equities. The S&P 500 energy sector fell 3.97%, according to Xinhua, while United Airlines rose 7.39%, TheStreet reported. Analysts urged caution: Raymond James's Pavel Molchanov pointed to many false dawns in recent months, and UBS's Giovanni Staunovo said the market is reacting sharply to every Middle East headline. ADNOC's chief executive said the world has drawn nearly 1 billion barrels from inventories since the war disrupted Hormuz shipping.
For funds and allocators, the session shows how much of the oil price is now a diplomatic premium rather than a supply figure. Goldman Sachs said Brent could reach $140 in 2027 if Gulf output stays 3.5 million barrels a day below its 2025 average, and traders have flagged the risk of renewed escalation after Tuesday's US midterm elections. Watch whether a second round of talks is confirmed this week and whether tanker attacks near Hormuz resume, since either would test Monday's drop.