Oil Prices Tumble on US-Iran Peace Talks Hopes
Global oil benchmarks tumbled sharply during Monday’s trading session, with Brent crude dropping 7.63% to settle at $104.77 per barrel and West Texas Intermediate falling 7.36% to $96.46 per barrel, according to argaam.com data from the November 2, 2026 session. This steep descent wiped out a significant portion of October’s gains, driven primarily by mounting geopolitical optimism surrounding indirect peace talks between Washington and Tehran.
Khamenei Grants Authority to Negotiate Peace with US
Iranian President Masoud Pezeshkian announced that Supreme Leader Mojtaba Khamenei granted the government formal authority to negotiate a peace settlement with the United States, emphasizing Tehran’s commitment to resolving the ongoing conflict through diplomatic channels. These talks followed negotiations in Doha mediated by Qatari officials. These developments came after days of talks held by Iranian negotiators with Qatari intermediaries aimed at ending the war.
Reporting on the exact magnitude of the daily slide varied slightly across international desks. While argaam.com documented Brent falling below $105 after shedding $8.66, Investing.com tracked the intraday lows hitting $106 before stabilizing near $108.74, and the Egyptian General Petroleum Corporation’s daily pricing report cited by youm7.com recorded Brent at $110.6 alongside WTI at $100.70. Other financial reporting noted that oil prices dropped about 4% during the day, with Brent losing 4.13%—amounting to $4.69—to reach $108.74, and West Texas Intermediate falling 4.22%, or $4.39, to $99.73, dropping below the $100 threshold amid Iranian-Qatari talks in Doha that raised hopes of easing supply disruptions in the Middle East.
US Secretary of State Marco Rubio affirmed that President Donald Trump favors diplomatic resolutions over continued military engagement. Yet, despite the softening prices in early November, underlying supply vulnerabilities persisted. Over the weekend, Ukrainian forces renewed attacks against Russian oil refineries, while commercial shipping lanes in the Persian Gulf continued to face hostile disruptions.
Goldman Sachs Revises Long-Term Forecasts Amid Supply Risks
Countering the immediate downward price pressure from the Doha talks, Wall Street institutions have adjusted their multi-year outlooks upward to account for supply risks. Goldman Sachs revised its December Brent projection to $105 per barrel and WTI to $94, up from previous estimates of $90 and $81, according to asharqbusiness.com. The bank also raised its average price expectations for 2027 to $88 per barrel for Brent, up from $80 previously, and to $78 for West Texas Intermediate, up from $73.
In a research note, Goldman Sachs stated that the intensification of attacks on shipping, damage to oil infrastructure, and a more persistent risk premium remain the primary catalysts for the potential for higher prices. The bank noted that major past oil supply shocks have tended to be long-lasting, and that many market participants believe achieving a lasting diplomatic breakthrough will prove difficult, prompting markets to price in a substantial risk premium.
The banking giant explicitly warned that if Persian Gulf production remains depressed by 3.5 million barrels per day compared to 2025 averages, Brent could spike to $140 per barrel by 2027, averaging $130 for the year. Goldman Sachs also stated that conflicts in the Middle East, Russia, and Ukraine, alongside broader geopolitical fragmentation, create heightened disruption risks with the timing and locations of disruptions being nearly impossible to predict, making a baseline assumption of a one-million-barrel-per-day global supply disruption margin for 2027.
Traders Eye US Midterms for Middle East Conflict Impact
Energy traders are turning their immediate attention toward the United States midterm elections, which carry implications for the future of the conflict in the Middle East. Markets are increasingly pricing in escalation following the November 3 US midterm elections and the potential subsequent weakness in Middle Eastern supplies, building on an October where Brent gained 14% to reach a six-month high despite the recovery of Middle Eastern crude supplies to near pre-war levels, driven by fears that hostilities between the US and Iran could reignite.