Trump Bombs Iran, Talks Peace, and Sends Oil Prices Tumbling

Brent slipped below $105 this morning following a flurry of headlines suggesting growing momentum in U.S.-Iran peace talks, only for Tehran to subsequently dismiss the reports.US Midterms Give Oil Markets a Brief Diplomatic Reprieve- The steep backwardation seen across global crude oil benchmarks has started to flatten as markets sought to digest news of Qatar-mediated talks between the US and Iran, with Dubai M1-M3 structure nearing zero this week. - As the Dubai cash-to-futures spread is routinely used to set Middle Eastern differentials, the flattening of the forward curve suggests differentials across Asia should be coming down soon.- Whilst freight from inside the Gulf remains prohibitively high, rates from the US-controlled Gulf of Oman have been edging lower with a voyage to China currently assessed at around $17 per barrel, down $6 per barrel from a month ago.- In the European markets, the oversupply in the prompt market led to Brent CFDs being in contango throughout November, only for backwardation to resurface from December onwards.- Global crude on water has risen to 1.3 billion barrels by early November, up some 50 million barrels from two weeks ago, with 80% of that increment coming from Middle Eastern countries, maximizing exports before a potential restart in US-Iran hostilities. Market Movers- French energy giant TotalEnergies (NYSE:TTE) has agreed to take a 30% operated interest in Malaysia’s Lang Lebah and B14 offshore gas fields as part of a farm-out deal involving Petronas, PTT and Kuwait’s Kufpec- US oil major ExxonMobil (NYSE:XOM) has increased its stake in the Rovuma LNG project offshore Mozambique from 25% to 50% after a swap with Italy’s ENI, which is expected to get ‘different properties’ in the adjacent areas. - Meg O’Neill, the chief executive of UK energy firm BP (NYSE:BP), has ‘categorically’ denied rumours that the company’s board is discussing a potential breakup of the major, saying it is imperative to keep it an integrated oil company.- Brazil’s state oil firm Petrobras (NYSE:PBR) has reported a new oil discovery in the Foz do Amazonas basin off the country’s northern coast, marking the third oil find in the untapped Equatorial margin and boosting the reserve tally of Morpho.- US hedge fund Blackstone (NYSE:BX) agreed to acquire 49.9% of the stake owned by Japan's Mitsubishi Corp (15% overall) in the LNG Canada project for $3.1 billion, with project partners selling down their stakes to fund its 28 mtpa expansion.Tuesday, November 03, 2026Ongoing US-Iran negotiations, even if Tehran constantly complains of the White House being ‘unconvincing’, have given oil markets a powerful bearish impetus, sending ICE Brent below $105 per barrel in one of the most drastic daily drops in recent history. That said, the chaos before US midterm elections, with Trump launching ‘defensive strikes’ on Iran’s Qeshm island and then suggesting he would halt the $4 billion in military support to Israel, will add to the upcoming days’ volatility.OPEC+ Holds Quotas Steady as Supply Stagnates. OPEC+’s remaining seven core members rolled over November production quotas into December, sticking to 31.01 million b/d even though actual output remains 4.21 million b/d below target as Middle Eastern wars constrain physical supply.Russia Extends Diesel Ban, Excepting US-Bound Flows. Moscow extended its diesel export ban to January 2027 to protect domestic supply, introducing exemptions for US and other key buyers that could lift November shipments to 540,000 b/d, more than double October’s 240,000 b/d average.Portugal Considers Tightening Its Grip on Galp. The Portuguese government is considering increasing its 8% stake in the country’s national oil firm Galp (ELI:GALP) after its merger talks with Spain’s Moeve collapsed, reflecting a broader push to protect strategic energy infrastructure.Indigenous Case Threatens Canada’s Midstream Plans. A First Nation in British Columbia has filed a court challenge against the Canadian government for fast-tracking the 1 million b/d Pacific Link pipeline, claiming Ottawa didn’t fully assess the impact on indigenous rights before approving it.Nigeria’s State Oil Firm Eyes IPO Bonanza. Nigeria’s state oil company NNPC is considering an initial 5%–10% domestic IPO after 2027, with a potential secondary listing in London or New York, seeking to replicate Dangote’s successful $4.8 billion domestic IPO to fund its downstream investments.Goldman Warns of Potential Prices Spikes to $140. US banking giant Goldman Sachs (NYSE:GS) raised its December Brent forecast to $105 per barrel and lifted its 2027 average to $88 per barrel, warning that oil prices could reach $140 if Gulf output remains 3.5 million b/d below 2025 levels.Ukraine to Continue Strikes on Russian Refineries. Ukraine’s President Zelenskyy said Ukraine will continue striking Russian refineries until Moscow stops attacking its energy system, lowering hopes of a diplomatic breakthrough ahead of the November 10-11 talks in the UAE’s Abu Dhabi.Aramco Starts Feeling the Houthi Pinch. The adjusted Q3 net profit of Saudi national oil firm Saudi Aramco (TADAWUL:2222) rose 9% year-on-year to $31.2 billion, although it dropped almost 7% compared to Q2 2026 amidst incessant Houthi attacks on pipelines, refineries and terminals. Tehran Threatens Shippers Transiting Hormuz. Iran warned of detention and confiscation against all vessels owned or operated by Sinokor, the champion of Hormuz transits, threatening legal enforcement against the South Korean shipper’s tankers from November 1 onwards.Thailand Raises Taxes on Imported EVs. Thailand will raise excise tax on imported electric vehicles (EVs) lacking local content to 35% from the current 10-15% from January 2027 onwards, seeking to localize vehicle manufacturing domestically after September EV imports doubled year-on-year. IEA Warns of Prolonged Gas Tightness. The International Energy Agency warned that tightness in natural gas markets would extend into 2027 as EU storage could fall below 10% by March in case of Hormuz LNG disruptions and colder weather, seeing global LNG supply shrinking 3% this year.Riyadh Doubles Down on East-West Pipeline Expansion. Saudi Arabia has begun work on expanding its East-West pipeline from the current 7 million b/d capacity to 10 million b/d, with CEO Amin Nasser stating preliminary engineering is underway, with commissioning expected by 2029. Russia to Sell Shipping Stake to Raise Budget Funds. Russia plans to sell 7.8% of its national shipping company Sovcomflot to potentially raise $200 million for its strained budget, while retaining 75% plus one share as SCF swung to a $278 million net profit in H1 2026 after years of losses.Soaring Gas Prices Prompt Egyptian Urea Cuts. As LNG prices in the Mediterranean continue to hover above $30 per MMBtu, Egypt’s government requested most of the country’s urea producers to lower operating rates by 20% amidst widespread natural gas curtailments, impacting fertilizers.Iran Seeks to Curb Gasoline Consumption. Iran targets cutting gasoline use to 755,000 b/d by January 2027, down 10% from current levels, through tiered pricing and alternative fuels, as refinery outages and the prospect of renewed hostilities with the US foreshadow gasoline shortages.By Tom Kool for Oilprice.comMore Top Reads From Oilprice.comADNOC Gas to Supply LNG to TotalEnergies Under Five-Year DealIndian Refiner BPCL Buys U.S. WTI Crude Oil CargoDubai Benchmark Slips Into Contango for the First Time Since July