Hopes of progress in peace talks have eased concerns over possible supply disruptions, putting pressure on global oil prices.
Global oil prices slipped nearly 1% on Tuesday, approaching a four-week low as hopes of progress in peace negotiations eased concerns about possible supply disruptions. However, uncertainty surrounding the conflicts involving Iran, the United States, Russia, and Ukraine continued to limit expectations of a sustained decline.
Brent crude futures fell $1.33, or 1%, to $103.44 a barrel by 1:18 p.m. ET (1818 GMT). US West Texas Intermediate (WTI) crude declined 56 cents, or 1%, to $95.90.
Brent was heading towards its lowest closing level since October 7, while WTI was on track for a second consecutive session of declines, potentially recording its lowest close since October 14.
Iran-US Negotiations Keep Oil Traders Cautious
Markets are closely following diplomatic efforts to end the conflict between Iran and the United States. A senior Iranian official told Reuters that the two countries remain far from reaching an agreement.
Qatar, which is mediating the discussions, has stepped up efforts to bridge differences and prevent another escalation following the US midterm elections. A spokesperson for Qatar’s Foreign Ministry said both Washington and Tehran remained committed to mediation and were reviewing proposals intended to narrow their differences.
Despite these developments, analysts warned that the risk of renewed conflict had not disappeared.
“Despite these positive signals, it’s probably too early to think escalation risks have passed,” ING said in a note. The bank added that clear progress in peace negotiations could put further downward pressure on oil prices.
The diplomatic developments come amid continued military activity. The United States carried out strikes on Iran’s Qeshm Island overnight. A US official said the targets included surface-to-air missile systems used against American assets, while another described the strikes as limited and not an indication of a return to major combat operations.
Meanwhile, US President Donald Trump said he had reached an agreement with Israeli Prime Minister Benjamin Netanyahu under which Washington would end $4 billion in funding to Israel after the end of this year.
Strait of Hormuz Disruptions Reshape Oil Supply Routes
Supply concerns remain a major factor in the oil market, particularly because of the disruption around the Strait of Hormuz.
The strategic waterway connects Gulf oil producers with international markets and previously carried around 20% of global oil supplies. Its effective blockade has forced regional producers to reconsider export routes and invest in alternative infrastructure.
Saudi Aramco is working to expand a crude oil pipeline that bypasses the Strait of Hormuz, company CEO Amin Nasser said.
The development reflects the growing importance of alternative transportation routes as producers seek to reduce their dependence on a single maritime passage.
Russia-Ukraine Peace Talks Could Affect Global Oil Supply
Oil traders are also monitoring diplomatic efforts to end the war between Russia and Ukraine.
The Kremlin confirmed that Russia, Ukraine, and the United States will hold three-way peace talks in Abu Dhabi from November 10 to 11.
Russia was the world’s third-largest crude oil producer in 2025, behind the United States and Saudi Arabia, according to US energy data. Sanctions imposed after Moscow’s 2022 invasion of Ukraine have restricted Russian energy exports and contributed to supply concerns in global markets.
A peace agreement could create conditions for Russia to increase its oil exports, potentially adding more supply to the international market.
However, military activity has continued ahead of the planned negotiations. Russian forces attacked Ukraine’s energy infrastructure with dozens of missiles and hundreds of drones, disrupting electricity supplies across parts of the country.
Ukraine also launched an overnight drone attack that set fire to a major oil refinery in Yaroslavl, according to the region’s governor.
Attacks on cargo ships near NATO members Romania and Bulgaria have added another concern, as the maritime conflict between Russia and Ukraine increasingly affects commercial shipping in the Black Sea.
Venezuela’s Oil Exports Remain Around 1.08 Million Barrels a Day
Elsewhere, Venezuela’s crude oil exports remained largely unchanged at 1.08 million barrels per day in October.
Shipping data reviewed by Reuters indicated that stagnant production and high freight costs continued to restrict demand for several South American crude grades.
The figures suggest that Venezuela has yet to make a significant increase in exports despite continued activity in the international oil market.
US Crude Inventory Reports in Focus
Traders are now awaiting weekly US oil storage data from the American Petroleum Institute (API) on Tuesday and the Energy Information Administration (EIA) on Wednesday.
Analysts estimate that US energy companies added 900,000 barrels of crude oil to storage during the week ended October 30.
If confirmed, this would mark the first increase in US crude inventories in five weeks. It would also be considerably smaller than the 5.2 million-barrel increase recorded during the same week last year.
The inventory figures could provide another indication of the balance between US oil supply and demand, adding to the factors influencing prices as traders assess diplomatic developments and continuing supply risks.
Read more news and follow us on Instagram.
Photo: Brent was on track for its lowest close since October 7, while WTI was headed for its lowest close since October 14 for a second day in a row. Photo: Reuters file
Source: KT
