Crude oil plunged on Monday. Brent futures fell 7.6% to settle at $104.77 a barrel and West Texas Intermediate dropped 7.4% to $96.46, pushing the US benchmark back below the $100 mark on the eve of the US midterm elections, market reports said.
Source: Market reports via Le Private Banker (CNBC/Bloomberg data)
The close is a major escalation of the move Awaaz Punjab reported earlier on Monday, when oil had slipped more than 1% — Brent to about $111.84 — as Iran and Qatar held a third day of talks on ending the war. The slide gathered pace through Monday's session: crude was down roughly 3% in the morning on reports of Iran-Qatar contacts over the Strait of Hormuz, and the loss more than doubled after Iranian President Masoud Pezeshkian said Supreme Leader Mojtaba Khamenei had granted the government additional authority to pursue peace talks.
President Donald Trump added to the move, telling reporters that Iran wants to "make a deal and that could happen." He has previously said the US would not strike Iran before Tuesday's vote.
Source: TipRanks (Bloomberg)
Iranian Foreign Ministry spokesman Esmaeil Baghaei said on Monday that "the ball is now in the US's court" and that Iran would not reopen the Strait of Hormuz unless the US lifts its naval blockade, Reuters reported — a reminder that no deal has been reached and the waterway, through which a large share of the world's oil and gas moves, remains shut in practice.
Source: Reuters via Ausecure
Brent settled at $104.77 a barrel, down 7.6%. WTI settled at $96.46, down 7.4% and below $100 for the first time in this move. The 10-year US Treasury yield fell about 3 basis points to roughly 4.90%, and gold futures rose more than 1% to around $3,950 an ounce as traders unwound part of October's war premium — crude had gained more than 10% last month.
Monday's drop reversed a large part of the war premium built up in October, when crude gained more than 10% as traders positioned for a possible military escalation after the US midterms. For Punjabi and Indian workers in the Gulf, and for families watching fuel and remittance costs, a sustained fall would ease pressure — but traders warned the physical risks behind the premium remain.
The conflict with Iran has not ended. Over the weekend, Khamenei ordered the armed forces to update their target lists and be ready for a geographically unrestricted response to threats, and Iran's Revolutionary Guard said two tankers had struck mines in the Strait of Hormuz — claims reported earlier by Awaaz Punjab. Brent still settled above $100 a barrel even after the sell-off.