Oil Prices Fall Again Nov. 3 as US Iran Talks Raise Hopes

Global crude oil prices declined for a second consecutive session on Tuesday, November 3, as investors responded to renewed diplomatic efforts between the United States and Iran to end a conflict that has disrupted Middle Eastern energy supplies for eight months.

West Texas Intermediate (WTI) crude futures dropped 37 cents to settle at $96.09 per barrel, after briefly falling below $95. Brent crude, the international benchmark, lost $1.17 to close at $103.60, according to CNBC.

The latest decline followed Monday's sharp sell-off, when Brent plunged 7.63% to $104.77 per barrel and WTI dropped 7.36% to $96.46, according to Reuters. Both benchmarks recorded losses exceeding 7% as diplomatic developments raised expectations of a possible agreement.

US President Donald Trump indicated that Tehran was interested in ending the conflict through negotiations.

"to make a deal and that could happen." Trump told reporters.

In a separate statement reported by Reuters, Trump also said an agreement was possible.

"could happen." Trump said.

Iranian President Masoud Pezeshkian had previously indicated that his government was prepared to pursue negotiations after Supreme Leader Ayatollah Mojtaba Khamenei granted officials certain authorities to engage in peace talks.

"will try to resolve the problem with dialogue" Pezeshkian said, according to Iranian state media.

Qatar has continued its mediation efforts, with a delegation traveling to Tehran for discussions involving Iranian Foreign Minister Abbas Araqchi. Qatar's Foreign Ministry said the meetings aimed to secure an agreement that would prevent further regional escalation and bring the conflict to an end.

However, the diplomatic outlook remains uncertain. Iranian Foreign Ministry spokesman Emsaeil Baqaei said Tehran would not accept negotiations conducted under coercive conditions, according to the state-owned Islamic Republic News Agency.

Military developments also continue to threaten regional stability. US officials told The Wall Street Journal that Washington had attacked Iran's Qeshm Island on Monday and had conducted military operations against the country in recent weeks.

The newspaper's report described the operations as limited in scope.

"limited strikes" an unnamed US official told The Wall Street Journal.

The report said the military campaign had been kept relatively low-profile to avoid signaling preparations for a wider escalation. Meanwhile, the United Kingdom Maritime Trade Operations Centre recorded at least four attacks on commercial vessels since the beginning of November across the Persian Gulf, Strait of Hormuz and Gulf of Oman.

US Vice President JD Vance expressed confidence in the possibility of reaching a negotiated settlement.

"The president and I both feel really good about the prospect of potentially coming to a negotiated settlement." Vance told CNN.

US Secretary of State Marco Rubio also indicated that the administration preferred a diplomatic outcome over further military action.

"diplomatically," Rubio said on Sunday, describing how Trump wanted to resolve the conflict.

Analysts cautioned that diplomatic progress did not necessarily guarantee a lasting agreement. Raymond James analyst Pavel Molchanov pointed to previous setbacks during negotiations.

"false dawns" Molchanov said, describing earlier periods of optimism that failed to produce a breakthrough.

UBS analyst Giovanni Staunovo highlighted how quickly geopolitical developments were influencing energy markets.

"The oil market is still reacting with extreme sensitivity to every headline out of the Middle East." Staunovo said.

He explained that the recent movement reflected changing expectations about the possibility of renewed military escalation.

"While fears of an imminent escalation pushed prices up last week, they have dropped sharply at the start of this week as diplomatic talks between the US and Iran continue," Staunovo added.

Despite the diplomatic signals, concerns about energy supply remain significant. ADNOC Chief Executive Sultan Al Jaber said the world had consumed nearly 1 billion barrels from oil inventories since the conflict began at the end of February and disrupted shipping through the Strait of Hormuz.

Saudi Arabia's crude exports also increased in October compared with September, according to two of three ship-tracking companies, despite attacks by Iran-aligned Yemeni Houthis on its energy infrastructure.

Oil prices had gained more than 10% in October as markets anticipated possible military escalation following the November 3 US midterm elections. Higher energy costs have also contributed to inflation and elevated gasoline prices in the United States, creating economic pressure ahead of the elections.

Two Federal Reserve presidents said the previous week that interest rates might need to rise further to contain inflation, highlighting the broader economic consequences of persistent energy price increases.