Oil prices dropped after a report said US President Donald Trump wants to give diplomacy more time before deciding whether to resume strikes on Iran following Tuesday's midterm elections. Brent slipped below $112 a barrel after jumping more than 2% on Friday, while West Texas Intermediate was near $102.
Trump told Benjamin Netanyahu of his preference for diplomacy in a phone call, a strategy that concerned the Israeli prime minister, Axios reported, citing two people it didn't name. The two countries started the war in late February with joint attacks on Iran. On Saturday, US Secretary of State Marco Rubio said no decision had been made on fresh strikes and that Trump prefers a diplomatic resolution. Iran's Supreme Leader Mojtaba Khamenei, however, ordered his top military commanders to prepare for renewed confrontation with the US and Israel, even as his foreign minister signaled progress in talks. An Iranian delegation was in Qatar for discussions with mediators on Saturday.
Attacks on vessels around the Strait of Hormuz continued, with UK Maritime Trade Operations reporting a ship struck by a projectile on Sunday, following an attack on a liquefied natural gas tanker on Friday. While crude exports from the Persian Gulf are near prewar levels, oil-product shipments remain constrained. The conflict, along with escalating Ukrainian attacks on Russian refiners, has driven diesel prices sharply higher in the US and Europe.
Goldman Sachs Group Inc. raised its Brent forecast to $105 a barrel for December and an average of $88 next year, citing heightened geopolitical supply risks. Separately, OPEC+ agreed to keep output quotas unchanged in December after unwinding its last voluntary cuts in September, a move largely symbolic given ongoing Middle East hostilities.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing