Oil prices fell, with London benchmark futures trading at 101.33 USD a barrel, down 2.27 USD from Tuesday, while U.S. crude slipped 2.18 USD to 93.91 USD. Intense diplomatic activity by the United States, Iran and countries around the Persian Gulf eased markets, according to the information provided on the negotiations.
Prices also fell amid speculation that U.S. President Donald Trump could bring the Iran “chapter” to an end. The Financial Times asked Trump about “clear signals” from Israeli Prime Minister Benjamin Netanyahu that an attack on Iran could take place by the end of the week. “We are ready, if we have to, but there may be no need for it,” Trump said.
Trump also spoke on Tuesday about suspending aid to Israel by the end of the year. He said he and Netanyahu had agreed to provide Israel with 4 billion USD a year, but had also agreed several months ago to suspend the assistance. Trump said the payments should be halted by year-end.
A spokesperson for Qatar’s Ministry of Foreign Affairs, which is mediating the negotiations, said the United States and Iran were considering proposals put forward by mediators. Countries around the Persian Gulf have been working together to prevent the conflict from escalating. An official familiar with the discussions said a response from Washington and Tehran was expected within the next 36 hours.
Chris Beauchamp, market analyst at IG, said markets would truly calm only when headlines more clearly signalled peace talks. Such announcements had not emerged, he said, but sentiment was shifting towards a more secure agreement involving concessions by Iran. Bjarne Schieldrop, an analyst at SEB, said the risk of Trump and Israel carrying out an attack remained, although the feeling of immediate danger had left the market.
Persian Gulf exports of crude oil, condensate and oil products, excluding liquefied petroleum gas, averaged 17.1 million barrels per day in October, according to vessel-tracking company Vortexa. Shipments were slightly lower than in September and remained about 25% below pre-war levels. U.S. oil inventories fell by 900,000 barrels last week, according to the Energy Department.
Separate calculations by the Organization of the Petroleum Exporting Countries showed its members’ reference basket fell 3.64 USD on Tuesday to 99.89 USD a barrel. The basket price dropped below 100 USD for the first time since the beginning of September.
