WASHINGTON (dpa-AFX) - Crude oil prices have gone into a tailspin on Monday after media reports said that in its talks with Iran, Qatar submitted revised proposals to convince Iran for an agreement with the U.S. Iran acknowledged that discussions are ongoing.
WTI Crude Oil for December delivery was last seen trading down by $7.76 (or 7.45%) at $96.36 per barrel.
The U.S.-Iran war is in its ninth month now, leaving the Strait of Hormuz still closed for international shipping.
Supply disruption fears increased and crude oil prices moved higher due to the geopolitical risk premium after recent reports in the media suggested that U.S. forces are preparing for an attack on Iran, jointly with Israel, soon after the midterm elections which are slated to be held tomorrow.
In addition, leaders from both sides were involved in a fierce exchange of words, triggering concerns of an expansive war in the Middle East.
In response, Iran already announced its readiness to combat any aggressor though it warned of devastating effects in the gulf.
Amid the threat of war, with support from Saudi Arabia, Turkey, and Egypt, and in coordination with the U.S., Qatari mediators have been frantically holding discussions with high-level Iranian delegates to avert a war.
After Iran expressed dissatisfaction with an earlier draft proposal presented by Qatar, Qatar visited Iran a couple of times over the past few days and presented revised proposals to Iran.
Senior officials from Iran met with mediators in Qatar and headed back to Iran yesterday.
Even while the Iranian team left Qatar with no concrete announcement on the outcome, reports suggest that a draft agreement is circulating and another meeting is in the cards.
On Saturday, U.S. Secretary of State Marco Rubio stated that no decision on new strikes on Iran has been made, and added that U.S. President Donald Trump prefers to resolve the issues through diplomacy.
Iran's Foreign Ministry Spokesperson Esmaeil Baghaei confirmed that the U.S. and Iran are engaged in negotiations through mediators.
Baghaei also stated that the talks are based on the seven-point plan that Iran offered in September, which Trump rejected.
Among other things, the plan included reopening of the Strait of Hormuz by Iran and ending the naval blockade imposed on Iranian ports by the U.S., once both sides reach an agreement.
Baghaei also confirmed that Iran's Deputy Foreign Minister Kazem Gharibabadi traveled to Doha to coordinate the communication channel with the U.S. through Qatari intermediaries.
Traders are making cautious moves as the midterm elections in the U.S. are scheduled to take place in less than a day.
If diplomatic measures fall apart, a re-escalation in the gulf could become inevitable.
Trump's messages continued to fuel uncertainty. He stated on Saturday that U.S. has targets in Iran to take care of and on Sunday said that the war will be over soon.
Leaders from both sides have talked about both 'war' as well as 'peace' as an option to end the crisis, adding to the confusion.
Axios reported that Trump had a telephone discussion with Israeli Prime Minister Benjamin Netanyahu on Saturday.
Citing sources, Axios added that while Netanyahu continued to urge Trump to carry out the planned strikes after the November 3 elections, Trump wanted to let negotiations play out.
Today, Iran's President Masoud Pezeshkian stated that Iran's Supreme Leader Mojtaba Khamenei granted the government 'certain authorities' over peace talks and that Iran will try to resolve the problem with dialogue.
Besides the regional mediators from Arabian nations, China and Russia recommended that both parties step up diplomatic efforts and drop plans to resort to arms.
Meanwhile, on Friday evening, 'unidentified objects' hit a Qatari tanker, Al Mayeda, belonging to Qatar's Gas Transport Company Nakilat that sailed in the gulf carrying Liquefied Natural Gas.
The U.S. dollar index was last seen trading at 101.69, down by 0.18 (or 0.18%) today.
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