U.S. crude oil futures slipped below $100 a barrel early Monday, November 2, as reports indicated that Washington and Tehran were exploring diplomatic ways to end the Middle East conflict. The declines came amid competing signals about the prospects for a negotiated resolution and the possibility of renewed military action.
International benchmark Brent crude futures for January delivery were down 4.61% at $108.20 a barrel at 5:49 a.m. ET. U.S. West Texas Intermediate futures for December delivery dropped 4.44% to $99.50 a barrel. Both benchmarks fell sharply as reports of diplomatic efforts circulated.
Speaking to reporters over the weekend, U.S. Secretary of State Marco Rubio said President Donald Trump would prefer to settle the war with Iran through diplomacy rather than military force. Rubio said Trump had not made a decision, while emphasizing the president's confidence that the United States had the capabilities and resources to succeed if military action became necessary.
Rubio described a peaceful resolution as the administration's preferred course, even as he outlined its readiness to act militarily. His comments left both possibilities open: pursuing an agreement with Iran and using force if the president determined it was needed. He said Trump wanted to resolve the conflict "diplomatically."
Iranian authorities also indicated that an agreement remained possible after two days of negotiations mediated by Qatar, according to Al Jazeera. Their position depended on demands being implemented in tangible terms. Those signals from Tehran accompanied the public comments from Washington favoring a diplomatic outcome.
The diplomatic reports followed accounts that both countries were preparing for additional military strikes after the U.S. midterm elections. The Wall Street Journal and The New York Times reported that Washington was making preparations for potential renewed military operations following the November 3 vote.
On Saturday, Iranian Supreme Leader Mojtaba Khamenei called on Tehran's armed forces to respond to threats of any scale or kind. He demanded "an immediate, impactful, and geographically unrestricted response," underscoring the military tensions accompanying the diplomatic efforts.
PVM Oil Associates analyst Tamas Varga said continuing attacks on vessels and refineries in the Middle East, along with attacks on civilians in Ukraine, offered little reason for confidence in lasting ceasefires in the foreseeable future. Concerns surrounding both conflicts were likely to persist in the near term. Still, Varga added, "hope springs eternal."
