Oil Prices Drop 7.6 Percent in Biggest Fall Since July on Iran Talk Hopes

Photo: AA via Türkiye Today

Oil prices fell hard on Monday. Brent crude dropped 7.6 percent to $104.77 a barrel, and United States crude fell 7.4 percent to $96.46, in the biggest one day fall for both since 27 July. Traders were betting that talks over the war with Iran might finally ease the pressure on world energy supplies.

The Wall Street Journal reported that the drop came as fresh diplomatic efforts eased fears of more fighting after the United States midterm elections on Tuesday. Iran's President Masoud Pezeshkian said the country's supreme leader had given the government certain powers to seek a deal through dialogue, according to state news agency IRNA. United States Vice President JD Vance had also sent a message to a senior Iranian security official last week in an effort to restart talks.

It was a sharp turn from October. Brent had ended that month at its highest level in six months, pushed up by attacks on shipping in the Strait of Hormuz, Houthi strikes on Saudi oil targets, and worry that the United States could strike Iran again after the vote. Monday wiped a large part of that fear premium away in a single session, and at one point the fall was close to 10 percent before buyers stepped back in.

Bloomberg reported that the slide spread well beyond crude. European natural gas futures fell almost 11 percent at one point, and United States heating oil posted its steepest drop in six months. United States crude also slipped below $100 a barrel, a line traders watch closely, just as American voters prepared to cast their ballots.

President Donald Trump noticed, and liked what he saw. Asked after the market closed whether he would resume strikes on Iran after Tuesday's vote, he answered "No", twice, according to the media pool travelling with him. He later told reporters that oil was down $10 and would go down a lot further, adding that Iran wants a settlement as soon as possible.

The key figures:

• Brent crude for January: down 7.6 percent to $104.77 a barrel
• United States West Texas Intermediate for December: down 7.4 percent to $96.46 a barrel
• Biggest one day percentage falls for both since 27 July
• Brent ended October at a six month high before Monday's fall
• Goldman Sachs now expects Brent to average $105 a barrel in December, but warns it could reach $140 in 2027 if Gulf output stays well below prewar levels

Not everyone is convinced the calm will last. Analysts quoted in the coverage warned that there have been many false dawns in eight months of war, and that Tehran and Washington still have not agreed terms to fully reopen Hormuz, the waterway that carried about a fifth of world energy exports before the war. Seven OPEC+ producers also agreed on Sunday to keep December output targets unchanged, so no extra barrels are coming from that decision.

For readers in Pakistan, the link is direct. Petrol fell to Rs374.51 a litre and diesel to Rs395.20 from today, and Pakistan now reviews pump prices daily, so a sustained fall in world crude can reach local pumps faster than it used to. The same talks sit behind the Iran team leaving Doha as a draft United States deal took shape, while China's fresh Middle East diplomacy push shows how many countries are now pressing for a deal before the fighting flares again.

Sources

• The Wall Street Journal, Oil futures slump as Iran peace efforts ease supply fears
• Rigzone (Bloomberg), Oil prices sink as Iran signals talks
• Türkiye Today, Oil prices plunge more than 4 percent as US-Iran talks raise hopes of ending war
• Reuters, Iranians have left Doha talks, draft proposal for US deal being circulated

What happens next is Tuesday's United States midterm vote, and whether the follow-up meeting the Doha mediators talked about turns into a real deal.

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