Oil drops 7% as Iran signals openness to peace talks
USO•Oil prices fell more than 7% as talks between Iranian and Qatari officials lifted hopes for an end to the war and stabilization of Middle East crude supply. Brent fell 7.47% to $104.96 a barrel, while U.S. WTI dropped 7.2% to $96.62.
1. Prices fall on talks
Oil prices fell more than 7% on Monday after Iranian President Masoud Pezeshkian said Supreme Leader Ayatollah Mojtaba Khamenei had granted the government certain authorities regarding peace talks. Iranian and Qatari officials held days of talks aimed at ending the war, and an official briefed on the discussions said a draft proposal was circulating with a follow-up meeting possible.
2. Market remains sensitive
Pezeshkian said Tehran would try to resolve the problem through dialogue. Analysts cautioned that skepticism was warranted after past false dawns, while UBS analyst Giovanni Staunovo said the market remained extremely sensitive to headlines from the Middle East.
3. Inventories and supply risks
ADNOC chief executive Sultan Al Jaber said the world had drained nearly 1 billion barrels from inventories since the war disrupted shipping through the Strait of Hormuz. Goldman Sachs said Brent could reach $140 in 2027 if Gulf oil output remains 3.5 million barrels per day below its 2025 average.
