Oil prices plunge by most since July on renewed hopes for diplomacy in U.S.-Iran war

On November 3, US President Donald Trump suggested progress in talks with Iran to prevent a resurgence of war, as Tehran stated "intensive" discussions were underway while offering to reopen the Strait of Hormuz under strict conditions. A deal with Iran "could happen," Trump wrote on his Truth Social platform, ahead of crucial US midterm elections.

Vice President JD Vance separately expressed optimism about securing an agreement, stating, "We've certainly made some progress. We'll see if we can make some more." Oil prices plummeted by more than seven percent on Monday due to optimism over a potential end to the eight-month conflict.

The renewed diplomatic signals precede Tuesday's midterms, where Trump's Republican Party seeks to maintain control of Congress despite voter dissatisfaction over the war and higher fuel prices. Democrats anticipate winning at least partial control of Congress, imposing political constraints on Trump for the first time in two years.

Iran's Foreign Minister Abbas Araghchi informed IRNA news agency that indirect talks with Washington were taking place through mediators, describing the consultations as "intensive" due to the sensitivity and gravity of the situation. Qatar and Pakistan are actively mediating, and China urged a return to negotiations. Iran's security chief held talks with Russian President Vladimir Putin.

China also urged Iran and the US to resume negotiations, while Iran's First Vice President Mohammad Reza Aref claimed that messages from the US acknowledged Iran's recent victory. However, Trump had previously threatened Iran, stating "at some point we're going to have to give them the hammer."

A senior Iranian official confirmed Iran's readiness to reopen the Strait of Hormuz within two days, provided the US agrees to its demands, including ending the war, unfreezing Iranian assets, lifting oil sanctions, and halting its counter-blockade of Iranian ports. Chinese President Xi Jinping met with Oman's Sultan Haitham bin Tariq in Beijing on Monday, calling for a peaceful resolution and urging the US and Iran to avoid war.