Brent Crude Falls Further on Monday

Brent crude fell towards $95 a barrel on Monday, extending the previous week’s 13.3% decline as markets weighed diplomatic efforts to end the Middle East conflict against continued regional attacks. US President Donald Trump said extensive strikes on Iran were unlikely if Tehran agreed to a strong deal, ahead of a meeting with Qatar’s prime minister. However, prospects for a breakthrough remain uncertain. US forces reportedly struck Iran’s Qeshm Island overnight, while Secretary of State Marco Rubio played down expectations for progress in negotiations. Tensions also persisted around the Strait of Hormuz, where a tanker was reportedly hit by an unidentified projectile. Separately, Iran-backed Houthi rebels damaged Saudi Aramco offices in Riyadh, prompting Saudi forces to destroy two missile launchers. Despite the security risks and repeated attacks on shipping, crude exports from the Persian Gulf have begun to recover.

Brent crude prices fell to around $97 per barrel on Monday, extending losses from last week after President Donald Trump said it was “highly unlikely” that he would authorize further strikes on Iran if negotiations over its nuclear program and the reopening of the Strait of Hormuz make significant progress. Trump has also acknowledged that the unpopular conflict, which has pushed oil and gasoline prices higher, contributed to Republicans’ historic defeat in the midterm elections. Brent crude plunged over 13% last week amid expectations that Democrats would push for a swift resolution to the Middle East conflict. However, US Secretary of State Marco Rubio tempered optimism over a potential breakthrough in negotiations, describing Iran’s demands so far as unacceptable. Meanwhile, Houthi attacks damaged a landmark building in Riyadh’s financial district and caused minor damage to offices belonging to Saudi state oil giant Saudi Aramco.

Brent crude wavered near $98 a barrel on Friday, trimming earlier losses as investors weighed the risk of renewed US-Iran military escalation against prospects for a diplomatic breakthrough. Investors are assessing whether the end of the US midterm elections could pave the way for renewed action against Iran, potentially threatening Middle East oil supplies. Iran reported attacks on oil tankers in the Strait of Hormuz on Thursday, while UKMTO data indicated vessel attacks were continuing at a near-record rate. Hopes for a diplomatic resolution emerged after Iran reportedly sent a nuclear proposal to Washington through Qatar. Significant obstacles remain over Iran’s nuclear programme, with the US demanding that Iran give up its nuclear capabilities. Meanwhile, Iran demands the lifting of the US naval blockade, sanctions relief and the release of frozen assets before fully reopening the Strait of Hormuz. Brent plunged over 12.5% for the week.