Brent Falls Below $92 as Reports Point to U.S. Restraint on Iran

Both benchmarks dropped 7% on Monday. The reports said the United States was open to Iran enriching uranium to almost 4%, and that Iran was reportedly prepared to accept the proposal. The claims remained unconfirmed by official sources on either side.

The price decline came despite continued attacks on energy infrastructure and shipping. Yemen’s Houthis again targeted Saudi Arabia’s East-West pipeline, causing a “limited fire” that was extinguished, according to an official from the Saudi energy ministry. Tanker attacks in the Strait of Hormuz also continued this week.

KCM Trade chief market analyst Tim Waterer told Reuters that the shipping attacks had not escalated enough to prompt a new risk premium. “While attacks on shipping around the Strait of Hormuz are still occurring, they have not escalated in a way that has forced a fresh risk premium into the market,” he said.

Brent has fallen 22% from its latest high of $118 a barrel, reached at the end of October, according to the report. That was its highest price in six months. A Reuters survey also found OPEC output rose by 1.38 million barrels a day in October to 22.87 million barrels a day. Production remained below the February average of 25.48 million barrels a day, but the gap was narrowing.

OPEC+ had pledged to increase output earlier in the year, but the Iran war prevented the group from delivering on that commitment. Members covered by its quota deal produced about 25 million barrels a day in August, against a combined target of 31.01 million. The group kept quotas unchanged for October and November.