Oil Prices Ease as Trump Weighs Further Iran Diplomacy

Global oil markets remain volatile as diplomatic uncertainty between the United States and Iran collides with escalating maritime security risks in the Persian Gulf. On November 2, 2026, Brent crude retreated toward $110 per barrel after reports indicated President Donald Trump wanted to give negotiations with Tehran more time before considering renewed military action.

West Texas Intermediate traded near $101 per barrel, according to Bloomberg. Brent had gained more than 2% on Friday before reversing direction following reports about Trump's diplomatic preference.

Axios reported that Trump communicated his preference for continued diplomacy during a phone conversation with Israeli Prime Minister Benjamin Netanyahu. The report, citing unnamed people familiar with the discussion, said Netanyahu was concerned about the approach.

The price decline comes despite persistent supply disruptions, rising transportation expenses and increased attacks against commercial vessels. Brent had exceeded $117 per barrel on Friday, approaching its wartime closing peak of $118.35 recorded during Iran's major wave of maritime attacks in March.

According to OilPrice.com, Brent remained above $116 on November 1 despite recovering crude exports through the Persian Gulf. The market continues to incorporate additional costs associated with maritime insurance, freight and the possibility of renewed military confrontation.

Natasha Kaneva, head of global commodities at JP Morgan, highlighted the difficulty of determining oil's underlying market value during the conflict.

"What is the price of oil? Eight months into the war with Iran, what should be a straightforward question has become surprisingly hard to answer," said Natasha Kaneva, as quoted by The Wall Street Journal.

Her pricing model indicated a fair value of $94 per barrel for Brent, substantially below its prevailing market price above $116. The difference reflects the additional risks and expenses affecting physical oil deliveries.

UBS commodity strategist Giovanni Staunovo also identified deteriorating maritime security as a major influence on prices.

"This recovery has coincided with a sharp deterioration in maritime security as vessels remain exposed to attacks and insurance and freight costs have risen sharply," said Giovanni Staunovo, commodity strategist at UBS.

The International Energy Agency has also warned that disruptions could persist well into next year. Its executive director, Fatih Birol, described the difficulty of returning global energy markets to their prewar conditions.

"I am afraid I don't see any credible pathway that the markets will go next year, where we were before this war has started," said Fatih Birol, executive director of the International Energy Agency.

Birol also described the crisis as a potential catalyst for a broader energy transition, using the expression "The Age of Electricity." However, electricity prices remain closely connected to the costs of hydrocarbons used in power generation.

Meanwhile, shipping activity through the Strait of Hormuz has remained substantial despite an intensification of attacks. CNBC reported that at least 30 commercial vessels, mostly oil tankers, had been struck by October 27, leaving at least 16 seafarers injured, according to the International Maritime Organization.

The number of confirmed attacks doubled from 15 incidents in September. Nevertheless, Kpler data showed average crude exports through the strait reached approximately 11.1 million barrels per day in October, around 2% below September levels.

Jakob Larsen, chief safety and security officer at Denmark-based BIMCO, described the increasingly dangerous operating environment.

"It's a difficult situation. Ships are attacked really on a daily basis," said Jakob Larsen, chief safety and security officer at BIMCO.

Mary Melton, senior tanker analyst at London-based shipbroker Braemar, said the increased attacks had not yet caused a comparable collapse in overall export volumes.

"On balance in terms of oil coming out, there hasn't been a massive impact," said Mary Melton, senior tanker analyst at Braemar.

However, daily shipments remain unpredictable. Kpler recorded flows falling to 7.3 million barrels per day during the week ending Wednesday, more than 40% below the prewar baseline.

Larsen attributed the continued movement of crude to changes in shipping operations and stronger commercial incentives.

"more attractive for the risk takers in the industry to actually carry out these voyages," said Jakob Larsen, describing the impact of higher freight rates.

He also explained how rising commodity prices encourage exporters to maintain shipments despite security concerns.

"And when the cost of oil goes up that also means that there's more commercial incentives to get the oil out and sell it in the global market," said Jakob Larsen.

Shipping companies have increasingly adopted a shuttle arrangement in which tankers transport crude through Hormuz before transferring cargo to other vessels waiting in the Gulf of Oman. The second vessels then carry the oil to Asian refineries.

Melton said the arrangement reduces certain insurance expenses but requires additional vessels, equipment and experienced crews.

Approximately 20% of the global supertanker fleet is involved in these operations, according to Melton. Daily rental costs for a supertanker traveling from the Gulf of Oman to Asia increased from $249,000 in early September to more than $900,000 during the first week of October.

Transportation expenses consequently climbed to approximately $21 per barrel, compared with $6.50 in September.

"If you're an importer in Asia, you're used to paying almost nothing for freight," said Mary Melton.

She highlighted the growing pressure on refinery economics as transportation becomes a substantially larger component of delivered crude costs.

"That really starts impacting your margins as a refiner," said Mary Melton.

Despite the continued movement of oil, Larsen warned that current shipping arrangements depend heavily on military protection provided by the United States.

"I don't think there would be many shipowners willing to take the risk if they didn't have that air cover from U.S. fighter jets and helicopters and drones," said Jakob Larsen.

Washington's military commitment could become another source of uncertainty following the November 3 midterm elections. The Wall Street Journal reported that several Gulf Arab nations had been told to prepare for a short but intense military campaign after the elections.

Oil markets therefore face competing signals: Trump's reported willingness to extend diplomacy has eased immediate price pressure, while maritime attacks, expensive transportation and uncertainty over future military operations continue to threaten global crude supplies.