Brent and West Texas Intermediate crude prices were stable on Tuesday, after WTI fell 7.4 percent the previous day. Signals from Washington and Tehran about resuming peace talks lifted market optimism as the Middle East war entered its ninth month.
Iranian President Masoud Pezeshkian said his government had obtained greater authority from Supreme Leader Mojtaba Khamenei to conduct negotiations, according to the Islamic Republic News Agency. Pezeshkian did not specify the scope of that authority. US President Donald Trump, asked whether the United States would strike Iran again after the midterm elections, answered no, and he also signalled progress in talks.
Political pressure on energy prices
The rally in the autumn was driven by fears of renewed hostilities. Brent rose nearly 14 percent during October to a six-month high, even as Gulf exports increased. Higher energy prices have put political pressure on Trump and Republicans during the war, and the US midterm elections were held on Tuesday.
Karen Young, a senior research fellow at Columbia University’s School of International and Public Affairs, said a price drop like Monday’s did not make much sense given tensions this high. News developments, she said, continue to drive price moves. Oil could still spike if the United States and Israel resume active military strikes on Iran.
Demands on both sides
Iran wants the US naval blockade of its ports lifted, economic sanctions eased and frozen assets released. It also wants the Strait of Hormuz fully reopened. Washington has demanded Iranian concessions on its nuclear programme.
European gas futures fell nearly 9 percent on Monday, and US heating oil recorded its steepest drop in six months.
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