Oil Markets: Brent Sticks Near $115 Amidst Tehran's Diplomatic Stance

Brent crude hovered near $115 per barrel in early Monday trading, holding steady despite escalating geopolitical tensions in the Middle East. The price point reflects persistent supply concerns as the Northern Hemisphere approaches winter, a season that typically drives up demand for heating fuel. Market volatility intensified late last week as traders reacted to conflicting signals from Washington and Tehran regarding the ongoing conflict.

U.S. President Donald Trump presented a binary choice to the public on Fox News, stating, "I have a decision to make: Do I finish it off, which would be very easy to do, or do I make a deal?" He referenced the joint U.S.-Israeli campaign that began on Feb. 28, suggesting the U.S. might launch another "Epic Fury" operation. Trump also asserted that the United States now controls the Strait of Hormuz. Speculation has grown that new strikes could follow the midterm elections scheduled for Tuesday.

In Tehran, Iranian Foreign Minister Abbas Araghchi told a televised audience that the prospect of renewed war had not altered his government's strategy. "Whether there is war or not, our policies remain the same," he said. He added that Washington and Israel had attempted this approach twice before and would achieve no different result. Spokesperson Esmaeil Baqaei confirmed that indirect contacts with the U.S. continue through intermediaries, even though direct talks have stalled for weeks.

Physical threats to energy infrastructure remain a central concern. The U.K. Maritime Trade Operations center reported that a tanker exiting the Strait of Hormuz was struck by an unknown projectile on Friday, disabling the vessel. The crew was reported safe. Iran had claimed responsibility for striking at least four tankers near the strait on Thursday, though those specific claims lacked independent corroboration. Trump accused Tehran of fabricating such attacks to inflate prices ahead of the U.S. elections.

Regional powers moved to cool the situation on Monday. Saudi Defense Minister Khalid bin Salman, Pakistani army chief General Asim Munir, and Turkish intelligence chief Ibrahim Kalin traveled to Tehran for security discussions with Iranian officials, including security chief Mohsen Rezaei. Saudi Deputy Minister for Public Diplomacy Rayed Krimly described the visit as a step toward de-escalation and mediation by Qatar and Pakistan. These talks come after eight months of regional war.

Violence continued in Yemen, where the Saudi-led coalition intercepted a Houthi ballistic missile aimed at Riyadh. The coalition also destroyed two launchers in Sanaa. The Houthis claimed their missile hit Riyadh's international airport shortly after flights resumed, and said drones struck oil pumping stations. Previous attacks this month had closed the airport for over two weeks and pushed Saudi Arabia's investment conference to 2027.

In Israel, Prime Minister Benjamin Netanyahu warned that Iran and its proxies might attempt to disrupt the U.S. elections. "Don't test us," he said. Defense Minister Israel Katz dismissed reports of a dispute between Netanyahu and army chief Eyal Zamir as "entirely baseless." Iran's foreign ministry stated that the outcome of the U.S. election makes no difference to Tehran.