Oil falls more than 6% as US and Iran pursue diplomacy

Oil prices fell by more than 6% on Monday, 2 November 2026, as diplomacy between the United States and Iran eased concerns about crude supply. Brent crude traded at 105.74 in the New York morning, down 6.78% from the previous close of 113.43.

What happened

Brent, the international benchmark, lost 7.69 from the previous close of 113.43 and stood at 105.74. US benchmark West Texas Intermediate lost 6.85 and stood at 97.27, down 6.58% from 104.12. Both contracts fell by a similar share, so the gap between them barely changed.

Market reports published during the session gave slightly different readings of the drop. One put the Brent decline at 6.4%, to $106.20 a barrel, as of 9:50 a.m. Another described a fall of about 6%, or $6.90, to $106.50 a barrel as of 1400 GMT. The differences reflect the time at which each figure was taken in a moving market.

One report described the move as a plunge and tied it to diplomacy between Washington and Tehran. The other headline said oil prices fell as the two countries pursue diplomacy. Both reports agree on the direction and on the cause that traders cited.

Why it matters

Reports attribute the move to talks between Washington and Tehran. They say the diplomatic track has reduced fears that supplies could be disrupted. Iran is a major actor in the Middle East, and tension involving it has often fed into the oil price through concern about supply routes and output.

Crude is a key input cost for transport, manufacturing and energy-intensive industries. A sharp move in either direction therefore matters for companies, central banks and governments that follow inflation and growth. The diplomatic outcome itself remains open, and the oil market is reacting to the prospect of an easing in tension rather than to a settled result.

Market impact

The oil move was the main price signal of the session. Brent at 105.74 and WTI at 97.27 remain at high absolute levels, even after a decline of more than 6% for each contract. The scale of the one-day fall, 7.69 for Brent and 6.85 for WTI, shows how much of the previous price rested on supply concerns.

On the data side, the Institute for Supply Management released its US manufacturing index for October at 15:00 UTC. The ISM Manufacturing PMI came in at 55.5, against a 54.6 estimate. The previous reading was 54.5. The figure shows factory activity at a higher level than in the prior month.

The two releases arrived in the same session. Lower crude prices reduce an input cost for manufacturers, while the PMI reading points to stronger factory activity than in September.

What to watch next

The next steps in the US-Iran diplomacy are the main driver for crude. Statements from either government about the talks, and any sign about supply, are the points that market reports tie to price moves.

Market participants will also follow whether Brent and WTI hold the lower levels reached on Monday or move back toward the previous closes of 113.43 and 104.12. Further US activity data will show whether the October manufacturing reading of 55.5 marks a trend. No dates have been given for those releases or for further diplomatic meetings.