Oil Prices Fall as Trump Opts for Diplomacy with Iran!

Global oil prices weakened during trading on Monday (November 2, 2026), following reports that U.S. President Donald Trump intends to allow more time for diplomacy before considering any potential new military strikes against Iran. Brent crude for January delivery fell 1.4% to US$111.82 per barrel as of 8:25 a.m. Singapore time, while West Texas Intermediate (WTI) dropped 1.6% to US$102.48 per barrel. This decline follows a surge of over 2% late last week, a period marked by market concerns regarding a possible escalation of conflict in the Middle East following the U.S. midterm elections on November 3.

Hopes for a negotiated resolution to the conflict were bolstered after Trump reportedly expressed a preference for diplomacy during a phone call with Israeli Prime Minister Benjamin Netanyahu—a stance that has reportedly caused concern within Israel, where there is a desire for a more assertive approach toward Iran. Meanwhile, U.S. Secretary of State Marco Rubio affirmed that Washington has not yet made any decisions regarding new military action and continues to prioritize a peaceful resolution. These developments have provided some relief to the oil market, as a reduced risk of conflict could help ensure the steady flow of energy supplies from the Middle East.

Nevertheless, the security situation around the Strait of Hormuz remains far from stable. Several vessels have reportedly been targeted, including a liquefied natural gas (LNG) carrier on Friday and another ship on Sunday. At the same time, Iran is reportedly preparing defensive measures in anticipation of potential new attacks, even as negotiations—facilitated by Qatar—remain ongoing. This situation indicates that peace talks have not yet fully eliminated the threat of disruptions to oil distribution. Market participants continue to closely monitor developments in the Strait of Hormuz, given the critical role this waterway plays in global energy trade. On the supply side, crude oil exports from the Persian Gulf region are nearing pre-war levels, though shipments of refined products—such as diesel—continue to face obstacles. Meanwhile, disruptions to Russian oil refineries, stemming from the conflict with Ukraine, have further tightened global fuel supplies. In light of these conditions, Goldman Sachs has raised its Brent crude price forecast to US$105 per barrel for December, with an average of US$88 per barrel projected for 2027, according to its latest outlook update. Concurrently, OPEC+ has decided to maintain its oil production targets for December, reflecting a cautious stance among producers in the face of geopolitical and energy supply uncertainties.

Looking ahead, the trajectory of oil prices will largely depend on the progress of diplomacy between the U.S. and Iran following the U.S. midterm elections. Should both nations make headway toward a peaceful agreement, Brent prices could see a further correction as concerns regarding supply disruptions begin to ease. Conversely, a failure in negotiations—or the emergence of new attacks on shipping lanes and energy infrastructure—could drive oil prices upward once again.