Brent crude oil approached $97 per barrel on Monday, continuing the steepest weekly drop seen since April 2020. Nairametrics reported that the benchmark had already shed over 16% of its value in the previous week. This sustained retreat from a six-month peak set at the end of October reflects market confidence that diplomatic channels may resolve the conflict between the United States and Iran. West Texas Intermediate crude traded near $91 per barrel during the same session, indicating a broad correction across global benchmarks.
The price movement aligns with expectations that reduced geopolitical friction will mitigate supply risks. Nairametrics noted that a Democratic victory in the US midterm elections bolstered hopes that the dispute would not escalate further, though mixed signals from Washington persisted. US Secretary of State Marco Rubio characterized Tehran’s demands as "outrageous and ridiculous," a stance that contrasted with President Donald Trump’s more conciliatory tone. Trump reportedly viewed additional military strikes on Iran as "highly unlikely" if negotiations progressed, leaving traders to evaluate whether diplomatic efforts could yield a durable resolution.
Security risks around critical energy infrastructure persisted despite falling prices. The UK Maritime Trade Operations indicated that a tanker sustained damage from an unidentified projectile while exiting the Strait of Hormuz. Separately, Yemen’s Houthi rebels damaged Saudi Aramco offices in Riyadh, prompting Saudi forces to destroy two missile launchers. These incidents reinforced fears that renewed hostilities might disrupt crude flows and reverse the recent price slide.
Supply fundamentals presented a mixed picture. A Bloomberg survey cited by Nairametrics showed OPEC output last month reached 88% of the volume recorded by those producers in February. Conversely, Iranian production declined following a US naval blockade. Vivek Dhar, a commodities analyst at Commonwealth Bank of Australia, suggested that lifting the blockade could trigger further declines, with Brent potentially falling to between $70 and $85 per barrel. Meanwhile, Ukraine hit a sixth Russian refinery in a week, intensifying its campaign against energy assets that help fund Moscow’s war.