Oil slides on Iran diplomacy hopes, Brent steadies near 105 dollars a barrel

Oil and gas fall on diplomacy hopes

Brent crude fell sharply on Monday, 2 November, with some session reports putting the drop above 7%, while intraday quotes showed it about 6% lower at 106.65 dollars per barrel. The move reversed a 14% rise in October that left Brent at a six-month high, according to Bloomberg. On Tuesday, 3 November, Brent traded near 105 dollars and US WTI near 97 dollars. European gas for one-month delivery fell 5.09% to 98.26 euros per MWh on 2 November, and on 3 November it was back above 96 euros after an 8% slide in the previous session. Gas remains more than three times its pre-war level from late February, and it rose 44% in October alone.

Iran talks and the Strait of Hormuz

Iranian President Masoud Pezeshkian said the government had received broader authority from the supreme leader, Mojtaba Khamenei, to pursue peace talks. Iranian and Qatari mediators met for several days in Doha, producing revised proposals but no substantive progress, according to Tehran. Iran's foreign ministry spokesman, Esmaeil Baghaei, said the Strait of Hormuz could reopen within two days, instead of seven, if Washington accepted Iran's conditions. Marco Rubio told reporters over the weekend of 31 October and 1 November that Trump had not yet decided on military action. An Axios report, cited by traders, said Trump wanted more time for diplomacy before approving new strikes after the midterm elections on 3 November. Reports on 3 November, citing US officials, said the United States had struck Iran's Qeshm island, and some officials described the strikes as defensive.

Analysts and Goldman Sachs forecast

Tim Waterer of KCM Trade said the Qeshm reports brought a risk premium back into prices just as markets had begun to price in diplomacy. Priyanka Sachdeva of Phillip Nova argued that a substantial geopolitical premium was already built into oil, so new headlines may struggle to lift prices without firm evidence of further supply disruption. UBS analyst Giovanni Staunovo said the market still reacts with exceptional sensitivity to Middle East news. Goldman Sachs raised its December Brent forecast to 105 dollars a barrel from 90 dollars, and its WTI forecast to 94 dollars from 81 dollars. For 2027 it expects Brent to average 88 dollars, up from 80 dollars, with a downside scenario in which Brent reaches 140 dollars and averages near 130 dollars.

Brent December 2026, previous forecast90

Brent December 2026, new forecast105

Brent 2027 average, previous forecast80

Brent 2027 average, new forecast88

Brent December 2026, previous forecast

90 USD per barrel

Brent December 2026, new forecast

105 USD per barrel

Brent 2027 average, previous forecast

80 USD per barrel

Brent 2027 average, new forecast

88 USD per barrel

Data from the article text

Russia and Ukraine strikes continue

On Monday, 2 November, Russia struck Ukrainian energy facilities in the Vinnytsia, Dnipropetrovsk and Kharkiv regions, according to Interfax, which cited the Russian defence ministry. A Ukrainian drone attack damaged an oil refinery in Yaroslavl, injuring two workers, according to governor Mikhail Yevrayev. Volodymyr Zelensky accused Russia of torpedoing peace progress after a strike killed at least 29 people during a humanitarian aid distribution in southeastern Ukraine. A strike on a hospital in Kherson injured 46 people and led to 200 patients being evacuated. Steve Witkoff said on X that US-mediated working talks between Russia and Ukraine would take place in Abu Dhabi on 10 and 11 November. The last round in Geneva in mid-February ended without tangible results, according to Kyiv.