Brent Rises Nearly 3% as Iran Rejects Reports of U.S. Talks

U.S. benchmark West Texas Intermediate rose nearly 2% to $87.98, while heating oil, the U.S. diesel benchmark, jumped 4.1%. Saudi Arabia reported October oil output near pre-war levels. Since the start of November, Brent had fallen about 21% and WTI about 17% as traders bet the conflict was winding down.

Iran’s top security official, Mohsen Rezaei, denied that talks with Washington were taking place and called reports of a recent meeting in Qatar “pure lies” intended to push oil prices lower. Iranian President Masoud Pezeshkian accused the United States of conducting diplomacy through threats. U.S. Secretary of State Marco Rubio rejected Iran’s demand for war reparations. UBS analyst Giovanni Staunovo cited “fading hopes of an imminent de-escalation.” Bloomberg columnist Javier Blas described Brent near $90 as “an oddity”: too low if the United States and Iran escalate, but too high if they reach a deal.

Even an agreement would not quickly restore Gulf oil flows, LSEG Oil Research said. Traffic through the Strait of Hormuz would depend on mine clearing, insurance costs and whether shipowners were willing to accept the risks. Attackers hit 37 ships in October, the highest monthly total since the war began, according to the Washington Institute for Near East Policy. Allianz Trade estimates physical damage across Gulf countries at more than $200 billion and projects cumulative economic losses of up to $790 billion by 2030.

Traders also looked past a 9-million-barrel increase in U.S. crude inventories for the week ending November 6, reported by the American Petroleum Institute. Diesel prices outpaced crude after a Ukrainian drone strike sparked a fire at Russia’s Ust-Luga export hub. Ukrainian attacks have disrupted about 30% of Russia’s refining capacity since late October. In the United States, the average retail gasoline price fell about 3.6 cents on Wednesday to $3.94 a gallon, its largest one-day drop in 18 years, according to AAA data, as pump prices caught up with lower wholesale costs.