Brent crude eased to a reported $114.88 a barrel as renewed diplomatic contacts between the United States and Iran took some heat out of supply fears, even though prices remain far above where they started the month.

The pullback was modest rather than a reversal. Brent December futures were reported down 0.4% at $114.88, with US West Texas Intermediate down 0.8% at $102, after Tehran signalled openness to talks. Earlier on Thursday, Reuters reported Brent down $1.22, or 1.1%, at $114.10 at 0351 GMT and WTI down $1.33, or 1.3%, at $101.45, after both benchmarks had risen sharply the previous day.

Diplomacy takes the edge off, for now

Reuters' energy coverage noted that the Wall Street Journal had reported a letter from US Vice President JD Vance to Iran's security chief aimed at reviving negotiations, while stressing that no clear decision is expected until after the US midterm elections on 3 November. That uncertainty is why traders treated the dip as a cooling of the risk premium, not as a resolution of the wider Middle East conflict.

Still a strong October

Context matters here. Reuters reported on Friday that Brent remained on track for an 11.5% gain in October, its fourth straight monthly rise and the longest such streak in more than two years. Underlying tightness has not gone away: the US Energy Information Administration reported a 1.9-million-barrel crude draw in the week ended 23 October, against analysts' expectations of a small build.

What to watch next

The next test is whether diplomatic signals turn into substantive talks, and whether shipping and Gulf supply conditions improve. Until then, prices near $115 leave fuel and inflation pressures elevated, and any fresh attack on energy infrastructure or shipping could quickly restore the premium that diplomacy has just trimmed.

Sources: Reuters; Reuters via 935 The Lloyd.