Oil prices retreat from six-month highs as Iran diplomacy eases supply fears

Oil prices declined on Monday, October 26, retreating from last week's highs as renewed diplomatic efforts involving Iran encouraged traders to reduce their exposure to geopolitical supply risks.

The decline came despite continuing attacks on Saudi Arabian infrastructure, which have kept concerns about Middle Eastern oil supplies firmly in focus.

Price overview

Brent crude futures traded around $111.08 a barrel in the latest streaming quotation, down 0.56%, while US West Texas Intermediate (WTI) futures stood near $100.97 a barrel, falling 2.23%.

Brent fluctuated between $109.25 and $112.20 during Monday's session, while WTI traded between $100.34 and $102.45.

Iran diplomacy weighs on prices

Oil prices came under pressure after President Donald Trump signaled that immediate military action against Iran was not planned, raising hopes that diplomatic efforts could prevent further escalation.

The development encouraged profit-taking following last week's sharp rally, when Brent approached $117 a barrel.

However, uncertainty remains over whether negotiations can produce a lasting agreement or restore confidence in regional shipping routes.

Saudi attacks sustain supply concerns

Attacks involving Houthi forces and Saudi Arabian infrastructure have maintained a substantial geopolitical risk premium in crude prices.

Traders remain particularly concerned about potential disruptions to production facilities and shipments through the Strait of Hormuz.

Any further escalation could quickly reverse Monday's losses, particularly if major export routes are affected.

Federal Reserve outlook

Investors are also preparing for the Federal Reserve's October 27–28 policy meeting.

Higher energy prices have complicated the inflation outlook, strengthening expectations that US interest rates could remain elevated for longer.

Market outlook

Brent faces immediate resistance around $112.20, while support stands near $109.25.

WTI could encounter resistance around $102.45, with support near $100.34.

The direction of oil prices will depend heavily on developments involving Iran, the security of Saudi energy infrastructure and signals from the Federal Reserve.