Oil falls as Trump favours Iran diplomacy before midterm elections

Oil prices slipped in Asian trading on Monday as hopes that diplomatic talks could calm the U.S.-Israeli conflict with Iran eased worries about supply shocks.

Brent futures that expire in January dropped 1.8% to $111.43 a barrel by 20:16 ET (01:16 GMT), while U.S. West Texas Intermediate fell 2% to $102.04 a barrel.

The dip came after a string of strong gains, a quiet weekend with no major flare‑up and ongoing talks that nudged some traders to lock in profits.

Both contracts are still up about 15% for the month of October.

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President Donald Trump told Israeli Prime Minister Benjamin Netanyahu in a Saturday phone call that he wanted to give diplomacy more breathing room before deciding on any new military action, Axios reported on Sunday. Netanyahu was uneasy, pushing for U.S. strikes to resume soon after the midterm elections.

The chance of more talks gave a little relief, but the election stays a big risk factor because Trump has hinted that he could order strikes if talks break down.

Iranian and Qatari officials met for a third day straight, trying to end the fighting. Tehran says it is still open to talks while getting ready to defend itself, and Qatar is trying to broker a plan to reopen the Strait of Hormuz.

The waterway remains a key worry for energy markets. Recent attacks on tankers and limits on Iranian oil shipments have pushed up shipping and insurance costs.

OPEC+ agreed to keep December output targets unchanged, and said further tweaks are unlikely before next year as the conflict continues to affect exports.

If negotiations stall, the price drop could be short‑lived. Analysts warn that a post‑midterm flare‑up could lift Brent toward $120 a barrel.

Even if a deal is struck, how fast shipping and oil exports get back to normal will shape how quickly supply worries fade.

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Key Takeaways for Crude Oil Traders

• Prices may bounce back if diplomatic talks collapse; keep an eye on any new escalation.
• Brent could climb to around $120 a barrel if conflict spikes after the U.S. midterms.
• OPEC+ is holding output steady for now, so supply‑side shocks are likely to come from geopolitics, not production cuts.
• Watch the Strait of Hormuz situation – any change in tanker security or Iranian export limits can move the market quickly.