Oil falls more than 4% as US crude drops below $100 on Iran draft deal hopes

Oil prices fell more than 4% on Monday, and US crude slipped below $100 a barrel, as hopes grew that talks to end the US-Israeli war on Iran were moving forward.

Brent crude was down $4.79, or 4.2%, at $108.64 a barrel, while US West Texas Intermediate lost $4.41, also 4.2%, to $99.71. Both benchmarks had risen nearly 15% in October, and Brent ended the month at its highest level in six months.

The slide followed word that Iranian negotiators had left their latest talks with Qatari mediators, with a draft proposal said to be circulating and a follow-up meeting possible, according to an official briefed on the talks. On Sunday Foreign Minister Abbas Araghchi said the talks were “ongoing and progressing”.

“The new month brought with it renewed hopes of a breakthrough in the Iranian stalemate,” said Tamas Varga of the oil broker PVM.

Supply has also held up better than feared. Tanker loadings at Fujairah and Omani terminals outside the Strait of Hormuz are running 36% above pre-war levels, according to the ship-tracking firm Kpler, and Saudi Arabia raised its crude exports in October. Seven OPEC+ producers kept their December output targets unchanged on Sunday and meet again on 29 November.

The relief may not last. Tanker attacks in the strait have picked up recently, and the head of the Abu Dhabi National Oil Company said the world has drawn nearly 1 billion barrels from its inventories during the war. Goldman Sachs raised its price forecasts on Sunday and said Brent could climb to $140 in 2027 if Gulf output stays 3.5 million barrels a day below its 2025 average.

For India, a big buyer of foreign oil, the drop is welcome. The country’s crude import bill rose 46% to $90.6 billion in April to September, with the Indian basket averaging $116 a barrel in September.