Oil prices fell Thursday as renewed diplomatic efforts involving the United States and Iran reduced some of the geopolitical premium built into crude, although continuing Houthi attacks and shipping risks around the Strait of Hormuz limited the decline.
By Carolina Curiel
Published October 29, 2026
What Readers Should Know
MONTREAL (Oil Monster): Oil prices moved lower Thursday as traders weighed renewed diplomatic efforts to de-escalate the Middle East conflict against continuing threats to regional energy infrastructure and shipping.
Brent crude futures were down $1.55, or 1.34%, at $113.77 per barrel by 13:14 GMT.
U.S. West Texas Intermediate crude fell $2.00, or 1.95%, to $100.78 per barrel.
Both benchmarks were giving back part of Wednesday's gains, when Brent rose 1.3% and WTI advanced 3%.
Prices are an intraday Reuters snapshot and not final October 29 settlement prices.
U.S. Vice President JD Vance has sought to revive negotiations with Iran by sending a letter to Iranian security official Mohsen Rezaei, according to the Wall Street Journal as cited by Reuters.
Qatari mediators have separately presented Tehran with a new draft proposal aimed at ending the conflict.
Iranian officials have given mixed signals. A senior official dismissed the latest ideas as unacceptable, while Foreign Minister Abbas Araqchi said Tehran continued to give diplomacy an opportunity to succeed.
The prospect of renewed negotiations has reduced some immediate concern that regional supply disruptions could worsen further.
The decline in oil prices remained limited by continued military activity.
The Saudi-led coalition said Thursday it destroyed a ballistic missile launched by Yemen's Houthis toward Saudi Arabia's eastern region.
The Houthis had previously claimed a missile strike on Saudi Arabia's Ras Tanura refinery, although Saudi authorities have not confirmed damage to the 550,000-bpd facility.
Iran's Revolutionary Guards also said three tankers struck sea mines and caught fire while using an unauthorized route south of the Strait of Hormuz during the previous 24 hours.
OilMonster Market Lens
Diplomacy is pulling prices lower, but physical supply risk has not disappeared.
The market is discounting some of the geopolitical premium on hopes that negotiations resume, while continuing attacks on tankers and Saudi infrastructure keep a floor under crude prices.
U.S. commercial crude inventories fell by 1.9 million barrels during the week ended October 23 to 410.6 million barrels, according to the Energy Information Administration.
Commercial crude stocks are now approximately 4% below the five-year seasonal average.
Gasoline inventories moved in the opposite direction, rising 3.9 million barrels to 209.2 million barrels.
Distillate stocks fell 1.5 million barrels to 102.8 million barrels and remain roughly 10% below their five-year average.
Expectations of higher Russian fuel production also weighed on oil prices.
JPMorgan analysts cited by Reuters said Russian refinery runs increased by approximately 350,000 barrels per day last week to 4 million bpd after no further confirmed attacks on Russian refining infrastructure since October 15.
Higher refinery utilization could support additional diesel supply while reducing some of the tightness that has helped keep crude and refined-product prices elevated.
Oil is retreating as traders give renewed diplomacy more weight, but the market remains exposed to rapid reversals if Middle East attacks escalate or physical supply is disrupted.
For now, negotiations are reducing the geopolitical premium while lower U.S. crude inventories and continued Hormuz security risks prevent a sharper decline.
Continue Reading
Energy Markets Today: Saudi Risk, LNG Cuts, OPEC+ Ahead
Courtesy: www.reuters.com
