Oil prices eased in Asian trading on Monday as the immediate risk of further supply disruption receded slightly following a weekend free of major new escalation and reports that diplomatic efforts were being extended.
Market moves - Brent futures for January delivery fell 1.8% to $111.43 a barrel by 20:16 ET (01:16 GMT), while U.S. West Texas Intermediate crude futures dropped 2% to $102.04 a barrel. The pullback came after several sessions of strong gains and followed investor profit-taking, with both contracts having ended nearly 15% higher for the month of October.
The absence of fresh, large-scale conflict over the weekend and the continuation of talks between regional players encouraged some participants to lock in recent gains rather than hold for further upside.
Diplomatic signals - Axios reported on Sunday that U.S. President Donald Trump told Israeli Prime Minister Benjamin Netanyahu in a phone call that he preferred to give diplomacy more time before deciding whether to resume military action. According to the report, Netanyahu had pushed for U.S. strikes to restart shortly after the midterm elections. The reported U.S. position provided partial relief to markets, though the elections themselves remain a material event risk since military options have been flagged if negotiations do not succeed.
Regional talks and the shipping route - Iranian and Qatari officials were on the third consecutive day of discussions aimed at ending the conflict. Tehran has signalled it remains open to diplomacy while also preparing to defend itself. Qatar is acting as a mediator on a proposal that would reopen the Strait of Hormuz. The waterway continues to be a central focus for energy markets - prior attacks on tankers and restrictions on Iranian oil exports have pushed up shipping and insurance costs.
Supply side policy - Meanwhile, OPEC and its allies, the OPEC+ group, agreed to keep December output targets unchanged. The group indicated that further policy adjustments are unlikely before next year while the conflict continues to weigh on exports and market stability.
Analysts cautioned that the recent price retreat may be short-lived if diplomacy falters. Some warned that an escalation after the U.S. midterm elections could push Brent toward $120 a barrel. Even if a diplomatic deal is reached, the speed at which shipping and oil exports return to normal will influence how quickly supply concerns abate.
For now, markets are balancing the easing immediate risk signalled by ongoing talks and reported U.S. restraint against the persistent uncertainties tied to regional geopolitics, shipping disruptions and OPEC+ policy settings.