International oil prices declined on October 26 as Qatar and other nations stepped up mediation efforts among the United States, Israel, and Iran, easing market concerns about further disruptions to Middle Eastern energy supplies. As of 14:12, Brent crude futures for December delivery fell 2% to $114.39 per barrel, while U.S. WTI crude futures dropped 2.3% to $100.88 per barrel. However, Yemen's Houthi forces continued their attacks on Saudi Arabia's energy and transportation infrastructure, and U.S. President Trump once again issued military threats against Iran, leaving significant uncertainty in the Middle East situation.
Qatar's mediators arrived in Tehran on Sunday to coordinate with the United States in promoting de-escalation of regional tensions, according to reports. Previously, the Middle East conflict had continued to escalate, with markets worried about more attacks on Saudi energy facilities and the potential expansion of regional military operations. Other reports indicated that senior officials from Saudi Arabia, Turkey, and Pakistan are expected to meet with Iranian officials in Tehran on Monday to discuss regional coordination matters. The密集 diplomatic contacts among multiple countries have revived market hopes for a possible easing of tensions, serving as an important reason for the oil price pullback on Monday.
However, diplomatic mediation does not mean that the United States and Iran are close to reaching an agreement. Trump said in an interview with Fox News on Sunday that the moment is approaching when a decision must be made: whether to reach a deal with Tehran or take further military action to end the conflict. Iranian Foreign Minister Araghchi stated that if reason prevails, the United States will not launch another attack. The latest statements from both sides show that although diplomatic contacts are increasing, the risk of military confrontation escalation has not been eliminated.
Previously, international oil prices surged sharply last week, mainly driven by security risks to Saudi Arabia's energy infrastructure. On Friday, both Brent crude and WTI crude rose by nearly $3 per barrel, with Brent settling at $116.72, the highest close since April 29, gaining about 6% for the week; WTI settled at $103.27, up 2.3% for the week. Yemen's Houthi forces continued attacking Saudi targets last week and claimed to have launched another strike on a Saudi airport and oil facilities on Saturday. Saudi Arabia said on Sunday that it had intercepted more missiles and drones. As Saudi Arabia is the world's largest oil exporter, attacks on its energy infrastructure have raised market concerns about potential impacts on crude production and exports.
Meanwhile, the security situation around the Red Sea is also deteriorating. Houthi activities are advancing toward the Bab-el-Mandeb Strait. The Bab-el-Mandeb Strait connects the Red Sea with the Gulf of Aden and is a strategically important passage linking the Indian Ocean, the Red Sea, and the Suez Canal route. If shipping security in the region further deteriorates, it could affect energy transportation and drive up tanker shipping and insurance costs. Although oil prices fell on Monday due to news of diplomatic mediation, as long as Saudi energy facilities and Red Sea shipping lanes remain at risk of attack, it will be difficult for the market to completely eliminate concerns about supply disruptions.
In addition to the Middle East conflict, Libya's crude production has also experienced new disruptions. Libya's National Oil Corporation said last week that a valve on a pipeline connecting the Hamada and Tahara oil fields to the Zawiya port had been closed, leading to reduced output from both fields. The specific scale of the production cut and the timeline for recovery have not yet been announced, but with Middle Eastern energy supplies continuing to face geopolitical risks, production disruptions in other oil-producing countries could further tighten market supply expectations.
Overall, the oil price decline on Monday mainly reflects investors' expectations for progress in diplomatic mediation, rather than the elimination of energy supply risks. Future oil price movements will still depend on whether the United States and Iran can ease the conflict through negotiations, whether Houthi forces continue attacking Saudi energy facilities, and the security situation of key Red Sea shipping lanes.
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