Oil slips as hopes of Iran peace efforts weigh on markets

12/11/2026 05:02 AST

Oil prices fell by more than $1 a barrel on Thursday as expectations of diplomatic efforts to end the Iran conflict and the Russia-Ukraine war weighed on markets, although continued uncertainty over shipping through the Strait of Hormuz limited the decline.

Brent crude futures fell $1.23 to $91.53 a barrel, while US West Texas Intermediate (WTI) crude declined $1.02 to $85.51.

The losses followed a recovery on Wednesday, when Brent gained about 1.4% and WTI rose 0.6%, after both benchmarks touched their lowest levels in two months earlier in the week.

Market sentiment has been influenced by expectations that diplomatic initiatives could prevent a further escalation of the conflict involving the United States, Israel and Iran.

Qatar has reported progress in efforts to facilitate an agreement between Washington and Tehran, although it cautioned that the two sides were not necessarily close to a deal.

Qatar's Foreign Ministry spokesman Ibrahim bin Sultan Al Hashmi said on Tuesday that the recent meeting between Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani and US President Donald Trump at the White House had taken place in a positive atmosphere and focused on advancing diplomatic efforts.

He said both sides had made positive statements about a diplomatic solution but added that it was not possible to determine how close or far away an agreement was.

However, Iran's senior security official Mohsen Rezaei said on Tuesday that no negotiations were currently taking place between Tehran and Washington, underlining the uncertainty surrounding the diplomatic process.

Rezaei also reiterated Iran's position that its enriched nuclear material would remain in the country, warning of consequences if the US launched further military strikes. Washington has maintained that nuclear issues must form part of any initial negotiations aimed at ending the conflict.

US officials have meanwhile played down the immediate need for renewed major military operations. Secretary of State Marco Rubio said the economic pressure campaign against Iran was working and that there was no need for major combat operations at present.

The conflicting signals have left oil markets weighing the possibility of diplomatic progress against the risk of renewed military action and further disruption to energy shipments.

Hormuz remains a key concern
Shipping security in the Strait of Hormuz continues to be a major factor in the oil market outlook. Attacks on vessels in the strategic waterway have persisted despite diplomatic initiatives, with 37 ships reportedly attacked in October, the highest monthly total since the conflict began, according to data cited by the Washington Institute for Near East Policy.

Even if an agreement is reached, a return to normal shipping operations may take time, given the need to address potential naval mines, high insurance costs and continuing security concerns among shipowners.

On the supply side, OPEC+ production increased sharply in October, led by higher output from Saudi Arabia, although shipments through Hormuz remain constrained.

The US Energy Information Administration (EIA), in its latest Short-Term Energy Outlook, expects Brent crude prices to average around $100 a barrel in November and December, reflecting continued supply disruptions, tanker attacks and restrictions on shipping capacity in the Middle East.

It forecasts an average Brent price of $97 a barrel for 2026, easing to $86 in 2027 as regional production recovers and global inventories rebuild.

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