Brent Falls Below $105 as US-Iran Talks Flatten Crude Structure

ICE Brent slipped below $105 per barrel on November 3, 2026, in one of the steepest daily drops in recent history, after Qatar-mediated talks between Washington and Tehran gained apparent momentum. Tehran subsequently dismissed the reports, but the bearish impetus held.

What moved the crude curve?

The steep backwardation (near-dated contracts priced above later ones) across global benchmarks has started to flatten. Dubai's M1-M3 structure neared zero this week, and Brent contracts-for-difference spent November in contango before backwardation resurfaced from December.

Because the Dubai cash-to-futures spread sets Middle Eastern differentials, Asian differentials should ease soon. Freight from the US-controlled Gulf of Oman to China now sits near $17 per barrel, down $6 from a month ago, though rates from inside the Gulf remain prohibitively high.

Global crude on water rose to 1.3 billion barrels by early November, up roughly 50 million barrels in two weeks. Middle Eastern producers supplied 80% of that increment, maximizing exports before any potential restart of US-Iran hostilities.

Takeaway: physical traders are repositioning for diplomacy, not betting on it.

Which deals reshaped upstream portfolios?

• TotalEnergies (NYSE:TTE) agreed to take a 30% operated interest in Malaysia's Lang Lebah and B14 offshore gas fields, in a farm-out involving Petronas, PTT and Kuwait's Kufpec.
• ExxonMobil (NYSE:XOM) lifted its stake in Mozambique's Rovuma LNG from 25% to 50% via a swap with Italy's ENI, which receives 'different properties' in adjacent areas.
• Blackstone (NYSE:BX) agreed to acquire 49.9% of Mitsubishi Corp's 15% stake in LNG Canada for $3.1 billion, funding the project's 28 mtpa expansion.
• Petrobras (NYSE:PBR) reported a new discovery in the Foz do Amazonas basin, its third find on the untapped Equatorial margin, boosting the Morpho reserve tally.

BP chief executive Meg O'Neill 'categorically' denied board discussions of a breakup, calling it imperative to keep the major integrated.

Takeaway: the majors are reallocating gas-weighted positions, not retreating.

How did OPEC+ and Russia respond?

OPEC+'s seven core members rolled November quotas into December, holding 31.01 million b/d even as actual output runs 4.21 million b/d below target, with Middle Eastern wars constraining physical supply.

Moscow extended its diesel export ban to January 2027 but exempted US and other key buyers. November shipments could reach 540,000 b/d, more than double October's 240,000 b/d.

Russia also plans to sell 7.8% of Sovcomflot, potentially raising $200 million, retaining 75% plus one share after SCF swung to a $278 million net profit in H1 2026.

Takeaway: quota discipline persists despite a widening compliance gap.

What are the geopolitics to watch?

Trump launched 'defensive strikes' on Iran's Qeshm island, then suggested halting $4 billion in military support to Israel — a mix that will add volatility around the US midterms. Iran has threatened detention of Sinokor vessels transiting Hormuz from November 1. President Zelenskyy said Ukraine will keep striking Russian refineries until Moscow stops attacking its energy system, dimming hopes before November 10-11 talks in Abu Dhabi.

Saudi Aramco's (TADAWUL:2222) Q3 adjusted net profit rose 9% year-on-year to $31.2 billion, yet fell nearly 7% from Q2 amid Houthi attacks on pipelines, refineries and terminals. Aramco has begun expanding the East-West pipeline from 7 million b/d to 10 million b/d, with commissioning expected by 2029, CEO Amin Nasser said.

Goldman Sachs (NYSE:GS) raised its December Brent forecast to $105 per barrel and its 2027 average to $88, warning prices could hit $140 if Gulf output stays 3.5 million b/d below 2025 levels.

Elsewhere: Portugal may raise its 8% Galp stake after merger talks with Spain's Moeve collapsed; a British Columbia First Nation challenged the fast-tracked 1 million b/d Pacific Link pipeline in court; NNPC weighs a 5%-10% domestic IPO after 2027 with a secondary London or New York listing; the IEA sees gas tightness into 2027 with EU storage potentially below 10% by March; Egypt asked urea producers to cut rates 20% with Mediterranean LNG above $30 per MMBtu; Iran targets gasoline use of 755,000 b/d by January 2027, down 10%; Thailand will raise excise tax on imported EVs without local content to 35% from January 2027.

Watch item: whether the Qatar-mediated talks survive Tehran's dismissal — and whether Hormuz transit threats materialize into detentions.