- Published OnNov 2, 2026 | 06:57 IST
- Last Updated OnNov 2, 2026 | 06:57 IST
Crude prices retreated as diplomatic signals outweighed supply risks from vessel attacks near the Strait of Hormuz and steady OPEC+ output quotas. Meanwhile, regional producers face severe economic contractions from ongoing conflict fallout. Discover how Washington plans to navigate peace talks after the midterm polls.
Oil prices fell on Monday November 2, as traders weighed the risk of renewed US strikes on Iran against signs of diplomatic progress, a day before the US midterm elections.
The move came as US President Donald Trump told Israeli Prime Minister Benjamin Netanyahu during a phone call that he favoured diplomacy, a position that reportedly concerned the Israeli leader, Axios reported.
Brent crude slipped below $112 a barrel, trading at $111.82 in early Asian hours, after it had jumped more than 2% on Friday. West Texas Intermediate (WTI) for December delivery fell 1.7% to $102.34 a barrel.
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US Secretary of State Marco Rubio said Washington has made no decision on fresh strikes and that President Donald Trump prefers a diplomatic resolution to the eight-month conflict.
Trump said last week that peace talks were under way, but he has repeatedly threatened to resume strikes on Iran after the midterms. The Wall Street Journal reported that a top commander briefed Trump on military options on Thursday.
However, at the same time, Trump warned that the US military could destroy Iran's remaining nuclear facilities within 10 minutes, claiming that much of the country's nuclear and military capabilities had already been weakened.
Speaking at a Halloween event at his Mar-a-Lago estate in Florida, Trump said Washington was in no hurry to launch another attack but retained the ability to strike Iran's remaining nuclear sites. He also claimed that Tehran wanted a deal with the US, while questioning whether Iran could be trusted.
Tehran meanwhile seemed to give mixed signals as Iran's Supreme Leader Mojtaba Khamenei ordered his senior military commanders to prepare for renewed confrontation with the US and Israel, even as his top diplomat indicated progress in the talks.
UK Maritime Trade Operations (UKMTO) said on Sunday that it received a report of a ship struck by a projectile in Hormuz. That followed Friday's attack on a liquefied natural gas tanker. Vessels have been crossing the waterway with their transponders switched off to avoid detection.
Brent rallied through October and touched a six-month high, even as crude flows through Hormuz recovered.
Against this backdrop, seven members of the OPEC+ group agreed on Sunday to keep output quotas unchanged for December, after they unwound the last of their voluntary cuts in September.
The decision comes as hostilities in West Asia, including in the Red Sea, continued to threaten exports and production facilities. Even so, OPEC+'s Arabian Gulf members remain constrained in their ability to use higher output targets.
The seven nations will keep meeting monthly to review market conditions and their next meeting falls on November 29, the same day the full OPEC+ group is due to convene.
Gulf states also seemed to be concerned that another US-Israeli attack on a better-prepared Iran could trigger an even more destructive regional war. UAE presidential diplomatic adviser Anwar Gargash told the IISS Manama Dialogue in Bahrain on Sunday that the Gulf had been drawn into a crisis that it had worked hard to prevent through diplomacy. He said the region was seeking a political solution, according to a Bloomberg report.
Also Read: Iranian envoys meet Qatari mediators as threat looms of US strikes after midterms
Iran has already since the onset of the conflict in February, fired thousands of missiles and drones at Gulf states, hitting oil facilities, airports and power plants. The attacks have killed and injured dozens of civilians while disrupted regional economies.
The International Monetary Fund expects Saudi Arabia's economy to shrink 3.3% this year, with steeper contractions forecast for Kuwait and Qatar.