Photo: Larry D. Moore / Wikimedia Commons, CC BY 4.0, cropped
Oil Fell for a Second Day as Middle East Talks Advanced. Brent Is Still $114, and Refiners Took the Hit
- Brent crude settled around $113.88 a barrel on October 27, down about 1.7%. WTI settled at $99.90, down about 1.8%. It was the second straight daily decline.
- Officials from Saudi Arabia, Turkey and Pakistan met Iranian leaders in Tehran, and the four countries agreed to keep talking.
- The Houthis claimed a ballistic missile strike on Saudi Arabia's Ras Tanura refinery, limiting the decline. Brent topped $117 last week, its highest since April.
- UBS now expects Brent to stay near $110 through year-end, up from its earlier $100 forecast.
- The energy sector (XLE) fell more than 2%. Refiners including Marathon Petroleum, Valero and Phillips 66 fell sharply after a big 2026 rally.
What happened
Oil prices fell for a second day on Tuesday, October 27:
| Benchmark | Settle | Change |
|---|---|---|
| Brent crude | ~$113.88 | −$1.93 (−1.7%) |
| WTI crude | $99.90 | −$1.86 (−1.8%) |
Source: Investrade market close, October 27, 2026.
The driver was diplomacy. Officials from Saudi Arabia, Turkey and Pakistan met Iranian leaders in Tehran on Monday to try to ease tensions, and the four countries agreed to continue talks. CNBC reported that Iran's supreme leader and top security official discussed conditions for ending the war.
Why the drop was small
The talks are fragile and the attacks haven't stopped.
- The Houthis claimed a ballistic missile strike on Saudi Arabia's Ras Tanura refinery, one of the world's largest oil export hubs.
- President Trump said he was approaching a decision on whether to strike a deal with Iran or intensify military operations.
- Brent topped $117 last week, its highest since April, after Iranian attacks on tankers near the Strait of Hormuz. One tracker said October was the worst month on record for attacks on shipping in the strait.
Analysts described the pullback as cautious optimism, not confidence that peace is close. UBS raised its year-end Brent forecast to $110, from $100.
Energy stocks lagged
The energy sector (XLE) fell more than 2% on Tuesday even as the S&P 500 rose 0.6%.
Refiners took the biggest hit. Marathon Petroleum, Valero, Phillips 66, HF Sinclair, Delek and PBF Energy all fell sharply. They've had a huge 2026, as war-driven diesel shortages widened "crack spreads," the profit margin between a barrel of crude and the fuels made from it. Any sign of peace threatens those margins. See why US refiners rallied in 2026.
Exxon Mobil, Chevron and ConocoPhillips report later this week. Expect record or near-record cash flow, as we covered in energy supermajors' record cash.
Why it matters beyond energy
Inflation. High oil is the main reason inflation re-accelerated this year in the US, Canada and Europe. US CPI was 3.7% in September. Every central bank meeting this week (the Fed, the Bank of Canada, the ECB and the BOJ) has to weigh energy prices.
Gas prices. Pump prices follow crude with a lag of a few weeks. A sustained drop below $100 Brent would bring relief by late November; a breakdown in talks would do the opposite.
Airlines, shipping and chemicals benefit when oil falls. Producers and refiners lose.
What it means for you
Don't chase energy stocks on headlines. Oil can swing $10 on one news story. A broad index fund already holds about 3%–4% energy, which provides some inflation protection.
If you own refiners: Their 2026 gains depend on war-driven margins. That's a temporary tailwind, so consider whether your position size still fits.
Watch the talks, not the forecasts. UBS's $110 call assumes the conflict grinds on. A real settlement could take $15–$20 off quickly. Our explainer on what drives oil prices covers the basics.
What to watch next
- Diplomatic talks involving Iran and Gulf states.
- Wednesday: US weekly crude inventories (EIA).
- Later this week: Exxon, Chevron and ConocoPhillips earnings.
Frequently asked questions
What is the price of oil on October 27, 2026?
Brent crude settled at about $113.88 a barrel and US benchmark WTI at about $99.90 on October 27, 2026, both down roughly 1.7% to 1.8% for the day and lower for a second straight session.
Why did oil prices fall on October 27, 2026?
Diplomacy. Officials from Saudi Arabia, Turkey and Pakistan met Iranian leaders in Tehran to ease Middle East tensions and agreed to continue talks. Traders treated it as cautious progress rather than a breakthrough.
Why are oil prices still so high?
Attacks on shipping near the Strait of Hormuz and on Saudi oil infrastructure have disrupted supply. The Houthis claimed a missile strike on Saudi Arabia's Ras Tanura refinery the same day talks were held, and October saw a record number of attacks on commercial ships in the strait.
What is UBS's oil price forecast?
UBS raised its year-end 2026 forecast for Brent to about $110 a barrel, from $100 previously.
Why did refinery stocks fall?
US refiners had rallied strongly in 2026 on high diesel prices and wide 'crack spreads,' the margin between crude and fuel prices. Hopes for a Middle East settlement raised the risk that those margins narrow, so investors took profits.
Primary sources
- CNBC — Oil prices fall after Iran's supreme leader and top security official discuss conditions to end war (Oct. 27, 2026)
- Yahoo Finance (Reuters) — Oil falls almost $2 as Middle East talks help ease supply worries
- US News (Reuters) — Oil eases on Middle East diplomacy hopes, Saudi attacks keep supply worries alive
- Investrade — Market Review: October 27, 2026
- US Energy Information Administration — Petroleum & other liquids
Data & disclaimer: This article is for educational purposes only and is not financial or investment advice. Figures reflect data available as of Oct 28, 2026, and conditions change — always confirm current pricing, rates and rules with the provider before you act. Written by Elizabeta Dimoska. See our editorial standards and disclosure.
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