West Texas Intermediate crude fell as low as $101.69 on Sunday night after President Donald Trump ruled out an immediate strike on Iran, leaving US oil above $100 and roughly 53% higher than before the US-Israeli war began.
Brent, the global benchmark, remained near $116, according to Trading Economics. Goldman Sachs estimates nearly $25 of that price is a war risk premium, even as Gulf exports recover.
Diplomacy and military signals
Trump said Sunday that no strike would happen that day. He also suggested Washington might still complete its military campaign or strike a deal, Al Jazeera reported.
Qatari mediators visited Tehran, and President Masoud Pezeshkian said Iran should still pursue a peace deal. Iran’s parliament speaker, by contrast, said Washington miscalculated in launching the war and must find a way out.
Military risks remained visible. The Saudi-led coalition said it destroyed missiles and drones that Yemen’s Houthi group fired at the kingdom. Shiptracker Kpler counted at least 18 reported vessel attacks over two weeks, according to an Oct. 19 note.
Separately, Washington and Israel have reportedly drafted Iran strike plans for after the Nov. 3 US midterm elections.
How far could prices fall?
WTI settled at $67.02 on Feb. 27, a day before the war began. Goldman forecasts Brent at $90 in December, with escalation the main upside risk.
With Brent about $13.50 above WTI, a $90 Brent would therefore imply WTI in the mid-$70s. Dutch bank ING said the premium would erode slowly if flows continue uninhibited, and saw no sign yet.
Inflation and market impact
Higher crude feeds fuel bills and inflation. US consumer prices rose 3.7% in the year to September.
That matters for stocks and crypto, since stickier inflation can keep interest rates high and weigh on risk assets.
Oil above $100 therefore hinges on whether Qatari mediation delivers before another attack on Gulf shipping or Saudi sites.
