WTI oil deepens losses towards $87.00 as efforts continue to restart US-Iran talks

• A decline of nearly 3% on Monday takes WTI Oil to lows around $87.00, close to its two-month lows of $86.32.
• Diplomatic efforts are gathering pace to restart negotiations between the US and Iran.
• Sunday’s attack on an Iraqi gas field and Iran’s accusation that the US struck Qeshm Island underline continuing regional tensions.

At $87.30 at the time of writing, US benchmark West Texas Intermediate (WTI) Oil is down nearly 3% on Monday, trading just above the two-month lows of $86.32 reached in early October. The renewed decline in oil prices comes as diplomatic initiatives to prevent a resumption of US-Iran hostilities gather pace. Markets have interpreted these efforts as an indication that a negotiated resolution to the conflict remains possible.

According to Reuters reports, a meeting on Monday will bring together US President Donald Trump, Vice President JD Vance and Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al-Thani. They will discuss the latest diplomatic initiatives aimed at restarting negotiations between the US and Iran.

Trump Plays Down Prospect of Further Iran Attacks While Talks Progress

Tensions eased with Trump’s statement on Sunday that a US attack on Iran would be highly unlikely while negotiations towards a peace agreement were making progress. Speaking that same day before leaving for a G7 summit, Secretary of State Marco Rubio cautioned that he did not expect an immediate breakthrough. He nevertheless said that President Trump favoured a diplomatic resolution, while describing Iran’s demands so far as “unacceptable”.

New directives from Supreme Leader Mojtaba Khamenei seek to end the state of “neither war nor peace” with the US, Iranian Prime Minister Masoud Pezeshkian said on Monday. However, Iranian authorities are demanding an end to the US naval blockade and the release of Iran’s assets seized abroad before advancing towards a peace process. They also accused the US of failing to honour its commitments.

Despite the diplomatic activity, skirmishes continue in the region. A drone strike hit the Khor Mor gas field in Iraq’s Kurdish region, while Iranian state media reported that the US military struck targets on Queshm Island in the Strait of Hormuz on Sunday night.