Oil Prices Fall as Iran Signals Continued Talks Over Strait of Hormuz

Brent crude fell more than 6 percent to $105.55 a barrel on 2 November after Iranian officials said contacts over ending the current war are continuing. The drop is the largest in more than two weeks. Markets reacted to signs that negotiations mediated by Qatar have not fully collapsed, even though the latest round ended without a breakthrough.

Iran’s Foreign Ministry spokesperson Esmaeil Baghaei stated that the basis of the talks is a seven-step plan drawn up by Tehran in September to reopen the Strait of Hormuz. Iranian negotiators left the latest meeting with Qatari mediators, but a draft proposal is circulating and a follow-up session remains possible. The Islamic Revolutionary Guard Corps Navy reported that two oil tankers exploded after striking mines while using an unauthorised route in the strait.

Iran has said that 11 ships have caught fire in the waterway over the past nine days, some of them sinking. US Central Command has disputed aspects of the account. The conflicting claims have kept shipping companies and insurers on alert. Several vessels have altered routes or delayed transits.

US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu spoke by phone over the weekend about the state of negotiations and the timing of any return to combat operations. Iranian Supreme Leader Mojtaba Khamenei told senior commanders that any renewed attack must be met with an immediate response without geographical limits. Chinese officials have told Iranian counterparts that dialogue remains the preferred path and that Beijing supports Iran’s sovereignty.

The Strait of Hormuz carries a substantial share of global oil exports. Disruptions there raise insurance premiums and can tighten physical supply even when futures markets fall on diplomatic news. The current price drop reflects traders pricing a lower probability of immediate further escalation. Physical barrels already in transit or delayed by earlier incidents continue to affect regional availability.

Gulf states have expressed concern about being drawn into a wider conflict they did not initiate. Officials from several Gulf countries met recently in Bahrain. They have urged restraint while maintaining their own defensive postures. The volume of oil that normally passes through the strait makes any prolonged closure a global economic event.

Shipping data show reduced traffic in the most contested lanes. Some tankers have used alternative routes that add days to voyages and increase costs. The Iranian statement about mines on unauthorised routes is consistent with earlier warnings that vessels not following prescribed channels face higher risk.

Markets will watch the next round of mediated contacts and any further incidents in the strait. A resumption of large-scale strikes would reverse the price decline. For the moment, the combination of continuing talks and the absence of a major new escalation has produced the sharpest single-day drop in Brent in more than two weeks.