Brent crude fell about 2 percent on Monday to around $114.50 a barrel after Qatari mediators travelled to Tehran on Sunday in a US-coordinated effort to ease regional tensions, while Asian shares started the week cautiously.
Brent crude fell about 2 percent on Monday to around $114.50 a barrel, and US crude fell to about $101, pulling back from near six-month highs. Brent had jumped 6.2 percent last week to its highest weekly close since mid-2022, and settled nearly $3 higher on Friday alone.
The pullback followed reports that Qatari mediators travelled to Tehran on Sunday as part of an effort to de-escalate regional tensions in coordination with the United States. The weekend brought no break in the fighting around Saudi Arabia: the Houthis said they struck a Saudi airport and oil facilities on Saturday, Saudi Arabia said it intercepted more missiles and drones on Sunday, and the kingdom's main airport only partly resumed operations after earlier damage.
Asian shares matched the cautious mood. Japan's Nikkei dipped 0.5 percent after losing 4.0 percent last week, South Korea's main index fell 1.1 percent, having shed almost 20 percent so far this month, and MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1 percent. Chinese blue chips lost 1.0 percent as China's ruling Communist Party began its fifth plenum in Beijing. The week ahead is crowded with central-bank meetings and corporate earnings, including Microsoft, Alphabet and Amazon.
The mediation trip was reported by Reuters, citing an official briefed on the situation, rather than announced in a Qatari or Iranian statement, so it stands as a reported diplomatic move rather than a confirmed agreement. The oil and share prices come from Reuters market reporting on Monday morning. Vandana Hari, founder of oil market analysis provider Vanda Insights, told Reuters the reprieve may prove temporary, noting that President Donald Trump has not dispelled market expectations of strikes on Iran after the 3 November midterm elections, and that volatility is likely to stay elevated with risks skewed to the upside.
What happens next depends on whether the Tehran visit produces anything beyond a visit. Attacks continued through the weekend, and the market's relief rests on hopes of easing hostilities rather than any announced deal. Traders will watch for further mediation signals, the week's central-bank decisions, and earnings from the largest technology companies for the next direction in oil and shares.