Oil Prices Sink as Iran, US Signal Openness to Diplomatic Resolution to Conflict

03:28 PM EST, 11/02/2026 (MT Newswires) -- Oil prices slumped Monday after Iran and the US signaled willingness to reach a diplomatic solution to their conflict that has disrupted global energy markets this year. West Texas Intermediate crude oil was down 7.2% at $96.58 a barrel intraday, while Brent tumbled 7.6% to $104.76. The two benchmarks notched their fourth consecutive monthly gains in October amid continued tensions in the Middle East due to the US-Iran conflict that started at the end of February. Iran is prepared to negotiate a diplomatic settlement with the US, but is not ruling out military action, Tehran's foreign minister, Abbas Araghchi, told state media outlet Islamic Republic News Agency, or IRNA, Monday. "We have announced our specific conditions and presented our formulated plan," Araghchi reportedly said. "Now everything depends on how much political rationality prevails on the American side and whether there is a will to take the wise path of diplomacy or, as in previous instances, to drag the situation toward aggression and military operations." US President Donald Trump has reportedly favored giving diplomacy time before considering further strikes against Iran, despite ongoing supply risks in the crucial Strait of Hormuz, Saxo Bank said in a note Monday. "Crude prices fell, supporting a pause in the recent stock market selloff, as Qatari and Iranian officials met for a third consecutive day in an effort to secure a deal to halt the US-Israel war on Iran ahead of Tuesday's US midterm elections," Saxo said. The reopening of the Strait of Hormuz and the full resumption of negotiations between the parties are directly dependent on the unconditional acceptance of Iran's "rightful conditions," Araghchi told IRNA. The narrow waterway is the world's most important chokepoint for crude flows. The conditions are feasible if the US "demonstrates goodwill" and truly seeks a peaceful resolution, IRNA separately reported, citing Araghchi's interview with Al Jazeera. Iran's President Masoud Pezeshkian said his administration is seeking to resolve issues via dialogue, with Supreme Leader Ayatollah Mojtaba Khamenei granting the government certain authorities in this regard, news outlets reported. "Gulf states remain concerned that renewed US-Israeli strikes could provoke a broader and more forceful Iranian response," Saxo said.