Khamenei gives Iran’s government powers to negotiate with Washington, and oil falls about 6%

Iranian President Masoud Pezeshkian said on Monday that Supreme Leader Mojtaba Khamenei had granted the government “certain powers” to pursue talks with the US^3,6. The go-ahead signals a potential diplomatic opening in the war¹. Khamenei reportedly granted the powers so the government could accelerate talks with the US aimed at ending the regional war⁸.

The authorisation came as talks between Iranian and Qatari officials on ending the US-Israeli war with Iran continued². Negotiations have stalled over which side should make concessions first, and Arab states have warned Tehran against attacks on infrastructure¹⁰.

Oil fell about 6% on Monday². West Texas Intermediate futures slid more than 7% to trade near $97 a barrel, and gas prices also plunged⁴. Brent crude dropped to $106⁷, while one live market tally showed Brent futures down 8.1%¹⁵. Gold extended gains as oil fell⁵, with spot gold up 1.5% to $3,955 an ounce¹⁵.

Why it matters to investors

The move in crude set the tone across markets: the 6% plunge, together with the White House expressing a preference for a diplomatic solution over military escalation, generated a cautious Wall Street rebound on the eve of the midterm elections¹². Oil had already slid after a report said Trump favors diplomacy with Iran¹⁴.

Investors were cheered by reports that Khamenei had granted powers to his government in its talks⁹. The talks in Qatar also revived hopes of reopening the Strait of Hormuz¹¹.

Washington has not ruled out renewed force, and Trump kept the threat of strikes on Iran on the table¹¹. He said in a phone interview on Monday that he was “in no rush” to decide whether to resume fighting in Iran¹³. “One way or the other, we will do something, but there is no rush. We crippled them financially,” Trump said, adding that Iranians “have no money, no gasoline”¹³. Those are the president’s own claims about the state of Iran’s economy¹³.

What to watch

The president appears set to continue on dual tracks, letting negotiations play out while preparing to go back to war if he concludes a deal is not reachable¹³. The midterm elections have been seen as an inflection point for Trump on whether to unleash a massive bombing campaign to try to end the war¹³.

In Tehran, the government now holds “certain powers” to pursue the talks⁶, granted so that it could accelerate them⁸. The question of which side concedes first remains open¹⁰.

For energy markets, the next test is whether the diplomacy delivers a reopening of Hormuz¹¹, after a session in which WTI traded near $97⁴ and Brent fell to $106⁷. Until then, Trump has kept the threat of strikes in place alongside the negotiations^11,13.