Brent slips below $109 as talks target a key route for Gulf oil
LONDON — Brent crude fell below $109 a barrel on Monday as talks between Iran and Qatari mediators raised the prospect of reopening the Strait of Hormuz to oil shipments. By 12.44pm South African time, Brent futures were down more than 4% and US West Texas Intermediate was trading just below $100. Iran said the talks had yet to produce an agreement, leaving oil buyers to price in the possibility of more Gulf supplies before tankers had any assurance of passage.
A shipping route drives the price reversal
An attack on a tanker in the strait had helped push oil prices to six-month highs on Friday. By the end of October, Brent had gained 13.6% for the month and US crude had risen 15.2%. Monday’s decline gave back part of those gains as traders reassessed the risk of further disruption.
Iranian Foreign Minister Abbas Araghchi said on Sunday that Iran had sent a delegation to Qatar to discuss a proposal for reopening the waterway. He said no direct meeting with US officials was planned. Separately, seven OPEC+ producers, including Saudi Arabia, Russia and Iraq, agreed to keep their December production targets at September levels. That decision left the immediate supply question where it was: how much oil Gulf producers can ship to buyers.
What changes for South African fuel buyers
South Africa imports both crude oil and refined fuel. Its monthly fuel price calculation takes account of international petrol and diesel prices, shipping costs and the rand’s exchange rate. A single day’s fall in Brent therefore gives motorists little basis for estimating their next price per litre.
One part of the November calculation is already known. Finance Minister Enoch Godongwana announced a temporary fuel levy reduction of R1.50 a litre on petrol and R3 a litre on diesel from 4 November to 1 December. Those amounts reduce the tax component of the price. The final adjustment also reflects what it costs to buy the fuel abroad and bring it to South Africa.
Anyone with additional information can contact the press desk at press@townpress.co.za or drop a tip.