Commodities

Oil Falls for a Second Session as Tehran Talks Ease Supply Fears, With WTI Near $100 a Barrel

Brent and WTI fell about 1.7% by late morning Tuesday as talks in Tehran raised hopes of de-escalation, though Houthi attacks on Saudi Arabia kept supply risks in focus.

Oct 27, 2026 - 12:19

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Crude oil prices fell for a second consecutive session on Tuesday, October 27, 2026, as diplomatic meetings in Tehran raised hopes of reduced hostilities in the Middle East, while continued attacks on Saudi Arabia kept concerns about supply in view.

Brent crude futures, the international benchmark, were down 1.7% at $113.88 a barrel as of 11:10 a.m. ET, and U.S. West Texas Intermediate futures were also 1.7% lower at $100.05 a barrel, CNBC reported. Reuters described the trading as volatile and said Brent remained near its highest level since late April, according to its midmorning U.S. stock market report.

On Monday, the December WTI contract settled down $1.51 at $101.76 and December Brent settled down 91 cents at $115.81, according to the Sprague Energy MarketWatch report published Tuesday. WTI traded as low as $100.33 during Monday's session and as high as $103.13 after news of further Houthi attacks on Saudi Arabia, the report said.

Talks in Tehran

Saudi Arabia, Turkey and Pakistan held talks with Iranian officials in Tehran on Monday aimed at easing tensions in the region, according to a Reuters report carried by Yahoo Finance. Saudi Arabia said the visit sought to establish open negotiating channels to "prevent the return of military escalation," and the four countries agreed to continue talks with a view to strengthening cooperation in peace and security, Iranian state media reported.

CNBC reported that Saudi Arabia's defense minister and Iranian President Masoud Pezeshkian held direct talks, with senior military and intelligence officials from Pakistan and Turkey also taking part. Iran's Foreign Ministry spokesman Esmaeil Baqaei said the talks were a step toward regional security cooperation and that further consultations are possible, according to the state outlet Tasnim, as cited by CNBC.

On Tuesday, Iran's Supreme Leader Mojtaba Khamenei met with his top national security official, Mohsen Rezaei, to discuss the country's conditions for ending the war with the United States, according to a post on the supreme leader's English-language social media account cited by CNBC. Khamenei said the current state of "neither war nor peace" needs to end, and discussed "safeguarding national and regional security by maintaining control" over the Strait of Hormuz, the post said.

U.S. President Donald Trump said in a Fox News interview on Sunday that he was approaching a decision on whether to pursue an agreement with Iran or intensify military operations, CNBC reported.

Attacks on Saudi Arabia limit the decline

Reuters said losses were limited because the prospects for peace looked fragile, with renewed attacks by Iran-aligned Houthi forces on Saudi Arabia, a key producer. CNBC reported that the Houthis have struck energy infrastructure as well as civilian targets such as airports in recent weeks, and that the attacks threaten Saudi oil exports, which have held up during eight months of conflict in the region.

Sprague's report also noted that Egypt's parliament approved defense support for Saudi Arabia on Monday, and that Qatari mediators traveled to Iran on Sunday as part of an effort, coordinated with the United States, to de-escalate tensions.

Inventories and the outlook from analysts

UBS analyst Giovanni Staunovo said in a Tuesday note that Brent is expected to remain near $110 a barrel through the end of the year, according to CNBC. He said the market has not normalized even though exports from the Middle East have increased compared with earlier stages of the war. "Vessels remain exposed to attacks, insurance and freight costs have risen sharply, and increased ship-to-ship transfers required to cross the Strait of Hormuz are absorbing tanker capacity," Staunovo said.

Staunovo estimated that global oil inventories have fallen by around 500 million barrels since February and said the release of government strategic stockpiles is largely over. BusinessLine reported that U.S. Strategic Petroleum Reserve inventories have fallen to their lowest level since October 1982.

The Sprague report cited International Energy Agency head Fatih Birol as saying he does not expect energy markets in 2027 to return to where they were before the Iran war, which began in late February. It also reported that Saudi Aramco plans to store crude at Singapore's Jurong Rock Caverns from the second half of 2027, citing Singapore's energy minister Tan See Leng; the caverns can hold roughly 9 million barrels of liquid hydrocarbons.

Fuel products and the week ahead

In refined products, November heating oil futures settled down 7.22 cents at $4.9120 a gallon on Monday, while RBOB gasoline settled up 69 points at $3.2185, according to Sprague. The report cited AAA data showing that the average price of regular gasoline since President Trump took office in his second term, $3.472 a gallon, has edged above the $3.471 average during President Joe Biden's term.

Lower crude prices also eased some pressure on equities on Tuesday, Reuters reported, as investors awaited the Federal Reserve's policy decision on Wednesday, October 28.