Oil wavers on conflicting reports of US military moves in Iran

[NEW YORK] Oil fluctuated in a choppy session as traders weighed conflicting signals on the direction of US military strategy in Iran.

Brent’s nearest contract, which expires on Friday (Oct 30), fell to settle near US$115 a barrel.

The benchmark reversed losses in post-settlement trading after The Wall Street Journal reported that a top US commander in the Middle East briefed US President Donald Trump on military options for Iran on Thursday, citing US officials and people with direct knowledge of the meeting. 

Trump has given frequent signals that he may resume the military campaign against Teheran after midterm elections, possibly in coordination with Israel.

US officials have told several Middle East countries and regional allies to be prepared for potential renewed military action after ballots have been cast, the Associated Press reported, citing unidentified diplomats. 

The latest report revived some risk premium around renewed US strikes on Iran that had faded amid signs of diplomatic efforts.

US Vice-President JD Vance reached out to Mohsen Rezaee, secretary of Iran’s top security body. Iran received the correspondence, the semi-official Tasnim news agency reported, with a top negotiator saying Teheran will not shift its peace deal terms.

Earlier, Foreign Minister Abbas Araghchi said Teheran continues to give diplomacy a chance.

The developments come just days before midterm elections in the US and as the market awaits results from Israel’s vote this week.

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Both contests will help dictate the future of a war that upended global energy markets and sent crude surging more than 85 per cent in 2026 so far. 

“Persistent headlines of deal talks are weighing on the crude oil market,” said Ryan McKay, senior commodity strategist at TD Securities. “We expect this will continue into the US midterms, but do not anticipate Iran would agree to a deal just before the tense elections.”

Brent futures have rallied move than 10 per cent in October, and touched the highest since April. The surge has heaped pressure on consumers and challenged central bankers seeking to contain inflation.

While the US Federal Reserve this week opted to keep interest rates unchanged, traders expect officials to resume tightening in December.

The market for oil products has rallied even harder as the war in the Middle East and escalating Ukrainian attacks on Russian refineries have stymied diesel flows in particular.

Reuters reported that Russia will extend its diesel export ban until the end of 2026, citing two unidentified people familiar. 

But there were also signs that some pockets of tightness in refined product markets are beginning to ease. European futures for the commodity, which have more than doubled in 2026, edged lower as China issued additional fuel export quotas to allow for more exports. 

Europe will release 42 million barrels of oil reserves – half of which will be diesel – into the market over the next three months as part of its commitment to ease prices, France’s Economy Minister Roland Lescure said on Thursday.

“Diesel is very weak and taking everything lower this morning,” said Scott Shelton, an energy specialist at TP ICAP Group. Between China adding quotas, as well as increased output from other key export centers, “perhaps the crisis is now done”, he added. BLOOMBERG