Oil Fund Falls 7.08% as US-Iran Talks Ease War Premium | Oil, Nov 2
Key Facts
- Oil’s biggest one-day drop in weeks: the fund that tracks US crude, USO, fell -7.08% on Monday 2 November 2026 to US$156.87, as the US and Iran signalled they would give talks a chance.
- Latin American producers fell with it: Petrobras (Brazil’s state oil company) lost -4.04% in New York, YPF (Argentina’s oil giant) -6.70% and Ecopetrol (Colombia’s state oil company) -5.93%.
- Colombia’s Ecopetrol is the weakest: it closed at its lowest level in at least 3 months, after a third straight daily fall.
- Still far above last year: the USO fund remains 137.1% above its 12-month low of 66.17, set on 16 December 2025.
- The peak is close behind: the fund sits 7.5% below its 12-month high of 169.53, reached on 23 October 2026.
- The cause is politics, not the economy: the dollar and bond yields barely moved, so the selling was a war premium coming out of the price.
- Prediction markets: Polymarket, a prediction market, puts 79.5% on WTI crude oil touching US$100 in November and 89.0% on it falling to US$95, as of 2 November 2026, 9:04 pm ET.
Today’s Focus
Oil fell sharply on Monday 2 November 2026 because the two sides in the Iran confrontation, Washington and Tehran, both said they would give diplomacy a chance. Traders had been paying extra for crude since the war began, and part of that extra, the war premium, was removed in a single day.
The USO fund, which tracks the price of US crude, closed at US$156.87, down -7.08%. Latin America’s listed oil companies fell faster than that, because their profits and their governments’ budgets depend on high prices.
The fall follows a strong run. The fund was still up 8.95% over 20 sessions and 33.0% over 60, so this looks like a pause inside a rise, not yet a reversal.
What matters today. Oil is now trading on headlines from the Gulf, and a real peace deal would take the price lower while a failed one would send it back to the 23 October high.
01 The session in one read
Think of oil’s price as a fever chart for the Iran war. On Monday 2 November 2026 the temperature dropped, because Washington and Tehran both said they would give talks a chance.
The USO fund fell -7.08%. It was the first down day after a climb that had taken it to a 12-month high on 23 October.
For readers outside the market: a fund like USO holds oil futures, contracts to buy crude at a later date. Its price follows crude closely but is not the price of a barrel itself.
The best-supported reading is that traders took profits on hopes of a thaw between Washington and Tehran, and that the move says little about demand. We are fairly but not fully sure, because talks have not yet produced a signed text. The variable to watch is whether Iranian crude exports keep slipping past the US naval blockade.
02 The board
All four names fell. Petrobras, Brazil’s state-controlled giant, lost -4.04% in New York, and Argentina’s YPF fell -6.70%.
Ecopetrol, Colombia’s state oil company, dropped -5.93%. That was its third decline in a row and left it at the lowest close in at least 3 months.
| Asset | Level | Change |
|---|---|---|
| WTI crude (USO) | US$156.87 | -7.08% |
| Petrobras | US$21.16 | -4.04% |
| Ecopetrol | US$16.17 | -5.93% |
| YPF | US$43.85 | -6.70% |
Source: RT close, 2026-11-02. Where a commodity has no spot feed, an exchange-traded tracker or leading producer is shown as a labelled proxy.
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Latin America — Cross-Market Board
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 167,921.80 | -0.75% | +19.56% | 169,186.42 | 178,526 | 175,157 | — |
| IPSA | 10,374.91 | +1.18% | — | 10,254.15 | 10,722 | 10,633 | — |
| IPC MEX | 69,779.20 | -0.01% | +12.74% | 69,787.41 | 70,008 | 69,383 | 49,372,306 |
| MERVAL | 2,848,945 | — | +12.65% | 2,859,051 | — | — | — |
| COLCAP | 2,490.92 | +0.04% | — | — | — | — | — |
| USD/BRL | 5.34 | -1.32% | -0.84% | 5.42 | 5.42 | 5.30 | — |
| EUR/BRL | 5.95 | +7.53% | -4.87% | 5.54 | 6.04 | 5.92 | — |
| USD/MXN | 18.69 | +0.62% | +1.45% | 18.57 | 18.69 | 18.54 | — |
| USD/CLP | 983.47 | -0.57% | +5.64% | 989.13 | 991.87 | 979.07 | — |
| USD/COP | 3,149 | +3.06% | -18.02% | 3,056 | 3,173 | 3,111 | — |
| USD/PEN | 3.45 | +0.17% | +3.85% | 3.44 | 3.45 | 3.44 | — |
| USD/ARS | 1,537 | -0.28% | +3.77% | 1,541 | 1,541 | 1,537 | — |
| USD/UYU | 40.21 | +3.57% | +2.29% | 38.83 | 40.21 | 40.08 | — |
| USD/PYG | 5,803 | +3.78% | -16.54% | 5,592 | 5,803 | 5,735 | — |
| USD/BOB | 11.97 | +4.93% | +77.92% | 11.41 | 11.97 | 11.82 | — |
| USD/DOP | 60.54 | +1.83% | -4.34% | 59.45 | 61.14 | 59.85 | — |
| USD/CRC | 451.24 | +2.13% | -7.80% | 441.83 | 451.40 | 450.04 | — |
| USD/GTQ | 7.64 | +3.23% | +2.18% | 7.40 | 7.64 | 7.64 | — |
03 Why it moved
First and heaviest, diplomacy. Reports on the day said both Washington and Tehran signalled room for talks, and Iranian President Masoud Pezeshkian spoke publicly on Monday. A calmer Gulf means less risk of lost supply, and the extra premium that lifted crude through October shrank.
Second, supply leaks around the blockade. A sanctioned Iranian tanker carrying about 500,000 barrels of liquefied petroleum gas slipped past the US naval blockade and delivered to China, according to the watchdog United Against Nuclear Iran. If sanctions leak, the market worries less about shortage.
Third, a longer-term mood shift: the oil price had been lifted by war risk, and talks put that premium in doubt. That is a slow-moving point, not the cause of one day, but it feeds the cautious tone.
The usual market drivers do not explain the fall. The dollar fund UUP slipped 0.14% and the US 10-year yield slipped about 3 basis points to 4.89%, which normally helps oil. Stocks were weaker, with the S&P 500 down 0.51%, and the VIX fear gauge rose 8.91% to 21.15, so some nervousness spread beyond oil. The gold fund GLD rose 1.65%, a sign of caution, not of risk appetite.
Our confidence is medium to high on diplomacy as the main cause, because the timing matches the news and the macro signals point the other way. It is lower on the ranking of the second and third causes.
The latest weekly report from the US Energy Information Administration (EIA), for the week ending 23 October, showed commercial crude oil stocks at 410.6 million barrels, down 1.9 million from the prior week, gasoline stocks at 209.2 million barrels, up 3.9 million, and distillate stocks at 102.8 million barrels, down 1.5 million. The next weekly report is due this week.
04 The trend behind it
The USO fund is 7.5% below its 12-month high of 169.53 from 23 October 2026, and it fell 5.63% over the past 5 sessions. Over 60 sessions it is still up 33.0%, and it stands 137.1% above its 12-month low of 66.17 on 16 December 2025.
This is a continuation of a large rally with a sharp pullback, not a new phase. Only one down session in a row so far means the trend has not turned.
Our own price history, kept since 2007, offers context and not a forecast. After 90 earlier moves of this size or larger, the fund was higher 20 sessions later in 47 cases, or 52%, with a median of +0.5% and a worst case of -24.0%.
05 What it means for Latin America
Brazil gains from the pre-salt, the oil fields under a thick salt layer offshore, which Petrobras has turned into a production machine. It reported record second-quarter 2026 production of 3.34 million barrels of oil equivalent a day and a quarterly profit of US$10.4 billion. Its New York shares are still 19.1% below their 23 October high of 26.16 and fell 12.34% over 20 sessions, so the market was already cooling on it.
Argentina’s YPF, the Vaca Muerta shale champion, lost -6.70%. Colombia is the most exposed, since Ecopetrol sits 11.4% below its 15 September high of 18.26 and crude is central to the national budget.
Importers such as Chile and Central American states welcome cheaper fuel. Travellers may see petrol and airfares ease only slowly, because retail prices lag crude by weeks.
06 The names to watch
Petrobras is the one to follow for the pre-salt story: offshore fields beneath a thick layer of salt that now supply a large share of its output.
Washington’s wider aim is to draw more supply from the Americas. That favours Brazil, Guyana, Argentina and Venezuela over time, but only if prices stay high enough to pay for new wells.
What Prediction Markets Say
On Polymarket, a prediction market, traders put the chance that WTI crude oil touches US$100 at some point in November at 79.5% and the chance it falls to US$95 at 89.0%. About US$608,000 has been traded on the November market, as of 2 November 2026, 9:04 pm ET.
Prices on prediction markets are bets, not polls or forecasts by officials.
Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.
07 What would end it
The slide stops if talks stall or the blockade tightens. The first line to watch is the 23 October high of 169.53 on the upside, and a failed deal could take the fund back there.
If talks hold, the 20-session gain of 8.95% could be wiped out. Beyond that, the next stop is far below, near the December 2025 low of 66.17.
The honest answer is that this does not stop on a calendar. It stops when negotiators either sign a deal or walk out, and we have no dated meeting to point to.
08 What to watch
- US-Iran talks: Any signed text or collapse of talks will move oil more than any data release.
- Iranian exports: More tankers slipping past the US blockade would mean more supply and a lower price.
- Petrobras: The dividend outlook and the 12-month high of 26.16 are the markers for Brazil’s state-controlled giant.
- Ecopetrol: A close below this week’s multi-month low would signal deeper stress in Colombian oil.
Frequently Asked Questions
Why did oil fall on Monday 2 November 2026?
Washington and Tehran both signalled they would give diplomacy a chance, which removed part of the war premium built up in October.
Is USO the same as the oil price?
No. USO is a fund that holds oil futures, so it tracks crude but is not the price of a barrel.
Does this end the rally?
Not yet. The fund is still up 33.0% over 60 sessions and only one down session in a row has occurred.
Who loses most in Latin America?
State-linked producers such as Ecopetrol, Petrobras and YPF, whose shares fell more than the fund.
Market data: The Rio Times
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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