Oil prices dropped more than 4% on Monday as negotiations to end the U.S.-Iran conflict eased fears of a supply disruption from the Middle East.

Brent crude futures expiring in January slid 4.2% to $108.68 per barrel. U.S. West Texas Intermediate contracts due in December fell 4.3% to $99.61, while January WTI contracts shed 4.2% to $97.90 — putting both front-month U.S. benchmarks below the $100 mark.

The sell-off clawed back part of the previous week's rally. Brent had closed October at a six-month high, meaning traders have now surrendered a portion of those gains in a single session.

What drove the sell-off?

Diplomatic movement, not barrels, moved the market. Iranian Foreign Minister Abbas Araghchi said Sunday that negotiations with Qatari mediators on reopening the Strait of Hormuz were still under way, though no deal had been reached. Iran sent a delegation led by a deputy foreign minister to Qatar, and no face-to-face meeting with U.S. officials was scheduled.

Tim Waterer, chief market analyst at KCM Trade, described the move as a technical pullback after last week's strong gains, according to Reuters. He cited continued optimism about a diplomatic breakthrough, along with a weekend that passed without a significant escalation in fighting.

Why the risk of renewed conflict persists

The de-escalation trade may prove fragile. The Wall Street Journal reported that the U.S. has instructed several Gulf Arab states to prepare for a possible brief but intense military operation against Iran once Tuesday's midterm elections are over. President Donald Trump has not made a final decision on resuming strikes.

Regional hostilities continued through the weekend. The Saudi-led coalition announced an operation on Sunday against assets that Iran-backed Houthi militants in Yemen rely on for their drone and missile programs.

What is happening on the diplomatic track?

Several channels are operating in parallel:

• Vice President JD Vance wrote last week to Mohsen Rezaei, secretary of Iran's Supreme National Security Council, in an attempt to revive peace talks. Trump said he approved the outreach, which was designed to sketch a possible structure for negotiations rather than present a full peace plan.
• Qatari mediators offered a new plan to end the fighting among Iran, the U.S. and Israel. A high-ranking Iranian official dismissed the proposal as unacceptable.
• The U.S. and Iran signed a memorandum of understanding on June 17, but the agreement subsequently collapsed.

The record points to the core difficulty: three separate initiatives — the June memorandum, the Qatari plan and the Vance letter — have so far failed to produce a durable settlement.

What did OPEC+ decide?

Seven OPEC+ producers decided on Sunday to keep their December output targets unchanged. The group, which includes Saudi Arabia and Russia, will next meet on Nov. 29 to set production levels for January.

The decision leaves the producers' bloc on the sidelines of this week's price move, with supply policy on hold while the diplomatic situation plays out.

For now, the market is pricing diplomacy over deterrence. Whether that holds depends on talks in Doha — and on decisions in Washington after the polls close.