Oil is pricing a deal that Iran has not agreed to. Brent futures are down more than $9 a barrel and US WTI is down $8, a bigger fall than the 4% Brent slide in pre-market trading. Tehran's public position has not moved. Iran said on Monday it is not yet at the stage for nuclear negotiations with the United States, and it still insists the US lift its blockade before Hormuz talks go ahead.

The optimism rests on words from the other side and from mediators. US envoy Tom Barrack says Washington is "very close" to a deal, with Qatar, Pakistan, Saudi Arabia and Turkey as mediators. A diplomat involved told Axios the talks are progressing positively. IRNA, Iran's state news agency, reports that Supreme Leader Mojtaba Khamenei has given the government authority to negotiate. Against that, Iran rejected Washington's seven-day Hormuz plan on October 28 as "unacceptable demands", and Foreign Minister Abbas Araghchi says only Iran's own plan is on the table for Hormuz.

The move comes after a long climb. Brent December futures stood at $114.88 and WTI at $102 on Thursday, October 29, and Brent had risen around 90% this year by October 25. A market that has shed this much on diplomacy has little cushion left if the diplomacy stalls.

The alternative is already drawn up. Trump says no strike will come before the November 3 election, but Netanyahu pressed him on a call on Saturday to resume strikes after the midterms, and Trump argued for more time. Axios reports the Pentagon has a three-day strike plan ready, and US and Israeli officials expect a week of bombing absent a deal. Khamenei has ordered forces to widen their target list to all US and Israeli assets, and the armed forces chief says that planning is finished.

Iran is weighing a Qatari draft, and an official briefed on the talks told Axios its reply is due by the end of the week.

© Raydn · raydn.us