Brent falls 7% as Pakistan-Qatar mediation raises hopes of US-Iran breakthrough

Brent crude prices dropped 7 percent on Monday as reports of a possible US-Iran breakthrough fuelled hopes of an end to the war. The decline came despite an attack that day on Saudi Arabia’s key East-West oil pipeline.

A mediation proposal involving Qatar and Pakistan reportedly brought the two sides back into serious discussions over Iran’s nuclear programme. According to media reports, Washington is prepared to accept Iranian uranium enrichment at 3.67 percent, and Tehran has agreed to that ceiling. Talks also cover the possible return of International Atomic Energy Agency inspectors to Iran.

Neither side has confirmed an agreement, however, and a senior Qatari official has reportedly challenged the details. The proposed 3.67 percent ceiling was part of the 2015 nuclear agreement and would be substantially below the 60 percent enrichment level Iran previously reached.

Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani was due to meet President Donald Trump on Monday for discussions about a possible ceasefire. On Sunday, US Secretary of State Marco Rubio described Tehran’s demands as “not just unacceptable, but in some cases outrageous and ridiculous,” while maintaining that Washington remained open to diplomacy.

The latest fall follows a nearly 9 percent slide last Wednesday, when Brent dropped below $95 a barrel amid expectations that a Democratic sweep of Congress would hasten an end to the war. Oil prices had also fallen earlier after both the US and Iran signalled openness to ending the conflict.

Saudi Arabia’s Ministry of Energy said the pipeline attack in the Medina region caused a limited fire, without casualties or disruption. The route carries crude for export through the Red Sea, avoiding the Strait of Hormuz. Lower crude prices offer relief to importers including Pakistan, although continuing attacks on energy facilities leave supply risks unresolved.