LONDON, Nov 2 — Oil fell nearly 4 per cent today as talks between Iranian and Qatari officials on a deal to end the United States-Israel war on Iran raised hopes that West Asian supply disruptions could ease.
Iranian negotiators left Doha talks yesterday, but not due to difficulties in negotiations, an official briefed on the meeting told Reuters today.
“The new month brought with it renewed hopes of a breakthrough in the Iranian stalemate,” said Tamas Varga of oil broker PVM.
Brent crude futures fell US$4.20, or 3.7 per cent, to US$109.23 a barrel by 0900 GMT while US West Texas Intermediate crude traded at US$100.14, down US$3.98, or 3.8 per cent.
Brent ended October at its highest in six months amid concerns that the US-Iran conflict could escalate again after tomorrow’s US midterm elections.
“Lingering hopes of some form of diplomatic progress, combined with the absence of any meaningful military escalation over the weekend, have taken some of the immediate heat out of prices for now,” said Tim Waterer, chief market analyst at KCM Trade.
Iranian Foreign Minister Abbas Araqchi yesterday said the purpose of the “ongoing and progressing” talks is to continue consultations with Qatari mediators, adding Tehran is prepared for “both defence and diplomacy”.
The talks follow a recent increase in attacks on oil tankers transiting the Strait of Hormuz, although there are also signs of shipments rising from some major exporters.
Last month, Saudi Arabia increased crude exports versus September despite attacks by the Iran-aligned Yemeni Houthis on its energy infrastructure, two of three ship-tracking companies said.
The outbreak of the Iran war at the end of February has depleted oil stocks. The world has drained nearly one billion oil barrels from inventories since the war disrupted shipping through the Strait of Hormuz, the CEO of Abu Dhabi’s state-owned oil company ADNOC said.
Oil could still rise further, some analysts say. Goldman Sachs raised its oil price forecasts yesterday due to elevated supply risks and said Brent could jump to US$140 in 2027 if Gulf oil output stays 3.5 million barrels per day below its 2025 average.
“Intensified shipping attacks, damage to oil infrastructure, and a more persistent risk premium remain the key triggers of potential upside,” the bank said in a report.
