Iran leaves Doha with a draft deal circulating — and oil slides 3% on hopes the strait reopens

Negotiators depart, draft circulates

Iranian negotiators have left talks with Qatari mediators aimed at ending the war with the United States, and a draft proposal is being circulated with a follow-up meeting possible, an official briefed on the talks told Reuters on Monday. The negotiators departed on Sunday, though not because of difficulties in the negotiations, the official said, without providing further details on the draft proposal.

Iran's foreign ministry spokesperson, Esmaeil Baghaei, said the basis of the talks is a seven-step plan Iran drew up in September to reopen the Strait of Hormuz and end the U.S. naval blockade on Iran, with Tehran now suggesting that proposal could be implemented on a faster timeline under a deal. Deputy Foreign Minister Kazem Gharibabadi had been in Doha to facilitate the exchange of messages with Washington via Qatari intermediaries, Baghaei said.

The two-day offer

On Saturday, Qatari broadcaster Al Jazeera quoted Iran's Foreign Minister Abbas Araghchi as saying that under a deal the strait could be opened within two days rather than within the seven days originally envisaged. Iran's initial proposal was rejected by U.S. President Donald Trump. Trump has said the United States would not launch new attacks before Tuesday's midterm vote and that talks have been productive, though he has not ruled out further military action afterward. U.S. Secretary of State Marco Rubio said Saturday that Trump has not decided on new strikes and would prefer a diplomatic resolution.

Oil slides, and Canada feels it

The Associated Press reported Brent crude, the global benchmark, down 3.3% at $109.66 a barrel early Monday, with U.S. crude down 3.3% at $100.64. The slide followed Trump's signal that he wants to give diplomacy more time. For Canadians, the direction matters at the pump and in inflation data: Brent's December contract closed Friday at $117.64 a barrel, its highest since April, and the Bank of Canada cited energy-driven inflation when it hiked to 2.50 per cent on October 28. A sustained easing would relieve that pressure; a breakdown in talks before or after Tuesday's vote would rebuild it.

What to watch

Tuesday's midterm results, Washington's answer to the circulating draft, and whether a follow-up meeting is scheduled. The strait carries about a fifth of the world's oil, so any movement toward reopening it — or away from it — will show up quickly in prices.