Iran's Supreme Leader Floats More US Talks In Rare Overture; Oil Prices Tumble

Update(0855ET): Oil is tumbling in the wake of a somewhat rare headline out of Tehran 

• Iranian President Pezeshkian says the Supreme Leader has granted the government some authority on dialogue, ISNA reports
• OIL FALLS TO INTRADAY LOW, BRENT TRADES NEAR $106/BBL

This marks some of the most significant confirmation yet that the Supreme Leader - who has been in hiding and not seen in public since the assassination of his father upon the opening of Operation Epic Fury - is still 'open' to a negotiated solution to the war. It has long been speculated that he and the more 'hardline' IRGC and affiliated officials are against talks and are preparing for war.

Presdient Trump too has signaled he wants to give diplomacy more time, amid reports that Israel's Netanyahu is lobbying for more military action.

Newsquawk notes of the immediate reaction in markets: Risk-on trade seen as reports Iran's Pezeshkian said the Supreme Leader has granted the government some authority on dialogue got wider airing; downside in oil and the Dollar, with upside in US equity futures, Treasuries and spot gold.

Earlier in the morning a report in the NY Post included some of the details related to ongoing indirect dialogue:

• Earlier, sources said Iranian negotiators left the Doha talks on Sunday, but not due to difficulties in negotiations, with a draft proposal circulated for feedback and a follow-up meeting possible. Iranian Foreign Ministry spokesperson Baghaei also said the compression of Tehran's seven-day proposal into two days is a sign of goodwill and that "America must make a decision", which added modest pressure to the complex.
• It was also reported earlier today that Iran had reportedly conveyed seven conditions to Qatar for reaching an agreement with Washington, including lifting the US blockade of Iranian ports, according to Kyodo citing a senior Iranian official. Tehran is said to be willing to adopt a flexible position on nuclear issues if an agreement to reopen the Strait of Hormuz is reached, although significant differences remain as the US seeks simultaneous nuclear concessions.

Still, time is running out and Trump is threatening to "bring the hammer" on Iran; however, there's still no articulated end game or what a 'misson accomplished' moment might look like, amid fears that Washington could be settling in for another 'forever war' - despite 'assurances' from admin officials like JD Vance.

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Brent crude futures fell to $108.41 a barrel, while WTI slipped below $100 this morning, after Axios reported that President Trump favored giving diplomacy with Tehran more time before launching another round of "Epic Fury." Separately, Iranian Foreign Ministry spokesman Esmaeil Baqaei said Tehran could reopen the Strait of Hormuz within two days if the Trump administration accepts its demands.

"Oil prices eased on Monday, with Brent down 2.8% at about $110/bbl and WTI down 3.3% at $100.67/bbl, as hopes for diplomatic progress tempered the geopolitical premium embedded in crude following October's rally. Iranian and Qatari officials have held three consecutive days of talks aimed at ending the conflict with the US and Israel," UBS markets analyst Nana Antiedu wrote in a brief note earlier today.

Brent's Friday gains have been erased ahead of the US session. There were other reports that Trump told Israeli Prime Minister Benjamin Netanyahu he wanted diplomacy with Iran. Secretary of State Marco Rubio said Saturday that no decision had been made on new attacks on Iran and that Trump preferred a diplomatic resolution.

Earlier today, Foreign Ministry spokesman Esmaeil Baqaei was quoted by Bloomberg as saying that Tehran was ready to reopen the Hormuz maritime chokepoint in two days if the Trump administration was willing to agree to its conditions.

"The possibility of implementing this plan in two days is another indication of Iran's good-faith approach," Baqaei said, adding, "We have stated that, if Iran's demands are met, it would be possible to restore security to the Strait of Hormuz and resume the negotiating process within a short period."

The spokesman said that an exchange of messages was ongoing with US counterparts via mediators and that "everything depends" on the US side accepting the Iranian demands. "Only then can we discuss the subsequent stages."

Despite the diplomatic signals, which can change at a moment's notice, UBS's Antiedu warned that global oil supply buffers are "wearing thin."

Antiedu added more color:

The pullback comes against an increasingly fragile supply backdrop. ADNOC CEO Sultan Al Jaber said nearly 1 billion barrels have been drained from global oil inventories since the conflict disrupted shipping through the Strait of Hormuz, Reuters reports. Diesel inventories in some markets are at 35-year seasonal lows, while shipping and logistics costs have risen from roughly 5% to 30% of the cost of a barrel.

Separately, June Goh, a senior oil-market analyst at Sparta Commodities, said that diesel is the "most distressed" fuel product heading into the Northern Hemisphere winter. She noted that spare refining capacity is mostly concentrated in China, where authorities continue to control fuel exports.

Goldman Sachs analysts earlier raised their Brent forecast to $105 a barrel for December and an average of $88 next year. They noted, "The Mideast and Russia-Ukraine conflicts, alongside broader geopolitical fragmentation, create high disruption risk."