Source: Sharecast
As at 1500 GMT, benchmark Brent crude was down 7% at $105.92 a barrel while West Texas Intermediate was off 7% at $97.01
Traders were reacting to three days of talks between Iranian officials and Qatari mediators, which are aimed at ending the US-Iran war. Tehran also confirmed that talks with America were continuing, with Foreign Ministry spokesperson Esmaeil Baghaei telling Reuters: “I can tell you that the dialogues are continuing. However, the issue is complex.”
It was also widely reported that Donald Trump was increasingly minded not to resume attacks on Iran, despite calls for further strikes from Israel’s prime minister Binyamin Netanyahu.
There is a currently an uneasy ceasefire between the US and Iran, with the American president focused on mid-term elections at home. Commentators had widely expected him to resume attacks once the polls closed. However, the cost of living has dominated the elections, much of which has been directly attributed to war in the Middle East.
Brent was trading at less than $70 a barrel prior to the US launching its first attacks on Iran in February, and is now 63% higher than it was a year ago. Petrol costs have now surged by more than a third since Trump returned to office January 2025, according to the American Automobile Association.
Kathleen Brooks, research director at XTB, said: “The oil price is reacting to reports that Trump is rolling back on his idea to strike Iran after the mid-terms, and instead is willing to give diplomacy more time to work towards a resolution of the conflict. This may come too late to save the Republicans from a drubbing in this week’s mid-term elections.”