President Donald Trump signaled a possible breakthrough in peace negotiations with Iran on Monday as oil prices plunged more than 7%, suggesting that markets increasingly expect an end to the eight-month conflict ahead of Tuesday’s midterm elections.
Iran Signals Willingness To Pursue Peace Talks
“Oil Prices are DROPPING LIKE A ROCK, down almost $10 a Barrel, A RECORD, because people feel that there will not be a War with Iran,” Trump wrote on Truth Social. “Iran wants a settlement, as soon as possible. It could happen!”
Following the President’s post, Brent crude fell $8.66, or 7.63%, to $104.77 per barrel on Monday, while West Texas Intermediate dropped $7.66, or 7.36%, to $96.46.
Iranian President Masoud Pezeshkian said Supreme Leader Mojtaba Khamenei had granted his government additional authority to pursue negotiations during a meeting with provincial governors and mayors of major cities on Monday, November 2.
“We are striving to resolve the issue through dialogue,” Pezeshkian said in a statement published on the Iranian president’s official website. He added that the supreme leader had granted the government certain powers to advance those efforts, although he did not specify their scope.
The diplomatic optimism contrasts with Trump’s earlier declaration that Washington was “not negotiating” with Iran. He has also threatened further military action after the elections, despite repeatedly claiming victory over Tehran. The conflict has disrupted shipping through Hormuz, which previously handled roughly one-fifth of global oil and natural gas supplies.
Fresh US Strikes Threaten Diplomatic Progress
However, renewed military action threatened to undermine the optimism. Reuters reported Tuesday that US forces struck targets on Iran’s Qeshm Island near the Strait of Hormuz. American officials described the strikes as defensive measures against threats to US assets and commercial shipping.
The developments reversed some of Monday’s losses, pushing WTI to $97.01 and Brent to $105.222 in early trading. The conflict has already raised concerns about prolonged disruption to global oil supplies, while previous diplomatic setbacks have repeatedly triggered sharp price swings.
Analysts Warn Oil Markets Remain Vulnerable
Raymond James analyst Pavel Molchanov told Reuters on Monday that signs of progress in U.S.-Iran negotiations pushed oil prices lower, but cautioned against excessive optimism after several ‘false dawns’ in diplomatic efforts in recent months.
Meanwhile, Goldman Sachs warned Brent could reach $140 in 2027 if Gulf production remains substantially below previous levels. The latest strikes highlight the uncertainty surrounding negotiations, even as Trump continues pushing for a settlement.
Photo courtesy: Below the Sky / Shutterstock
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