Oil Plunges More Than 7% as Iran Opens the Door to Talks and Rubio Says Washington Would Prefer Peace
Brent settled at $104.77 and WTI at $96.46 on Monday after Tehran said its supreme leader had authorised negotiations and the US said no decision on new strikes had been taken.
Monday, November 2, 2026/2 min read
The oil market spent October pricing in a second war with Iran. On Monday it priced some of that out. Brent settled down 7.6 percent at $104.77 a barrel and US crude closed at $96.46, down 7.4 percent and its biggest one-day loss since 27 July, CNBC reported, after both Washington and Tehran spent the weekend talking about talking.
Brent had rallied above $110 in October on fears that the conflict would reignite once the US midterms were out of the way, with President Donald Trump threatening to resume strikes after Tuesday's vote, Bloomberg noted in a report carried by Rigzone. Our last oil piece, on 28 October, had WTI back above $100 as the Houthis claimed a strike on Ras Tanura.
What did Iran say about negotiations?
President Masoud Pezeshkian said Tehran was seeking to resolve its problems through dialogue and that Supreme Leader Mojtaba Khamenei had granted the government certain powers to do so, according to the IRNA remarks quoted by Bloomberg. He did not say what those powers were or whether Iran's negotiating position would change. Foreign Minister Abbas Araghchi told CNBC's sources that an agreement was possible if Washington demonstrates goodwill, and said mediators were discussing the proposal Iran tabled at the UN General Assembly in September. Tehran's list is unchanged: sanctions relief, a smaller US military footprint in the region and an end to the blockade.
The sequencing matters for tankers. Iranian officials say shipping through the Strait of Hormuz will ease and formal talks will resume only after the US lifts its economic blockade, Bloomberg reported. An Iranian delegation was in Doha, the key mediator, pursuing a last-minute breakthrough, and Axios reported that Trump told Israeli Prime Minister Benjamin Netanyahu he remained open to giving diplomacy more time.
What did Rubio and Trump say?
Secretary of State Marco Rubio said over the weekend that Trump had not made a decision on whether to strike Iran again and that "we would prefer to do it peacefully," CNBC reported. Trump himself said Iran wanted to make a deal and that it could happen. The tone from Tehran's military was harder: Khamenei on Saturday called for the armed forces to meet any threat with an immediate, impactful and geographically unrestricted response.
Is the risk premium gone?
No, and the analysts who watch it say so. Ryan McKay, director of commodity strategy at TD Securities, told CNBC that so long as there is no concrete conclusion to the war, and tanker and Houthi attacks remain prevalent, the premium will not fully erode on diplomacy headlines alone. Brent at $104.77 is still far above where it traded before the strait closed, and Monday's move was as much a squeeze on crowded long positions ahead of the election as a verdict on peace.
Lower crude did its usual work elsewhere. Gold and silver rebounded as inflation worries eased, airlines rose, and oil producers fell on Wall Street. The next test is Tuesday night's election result and what Trump does with it. If the strikes he threatened for after the midterms are replaced by a date in Doha, Monday will look like the start of something; if not, $110 is only a headline away.
Published in The Outspoken Digest
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