(Oil & Gas 360) – Oil prices fell approximately 2% on Tuesday, November 3, extending a sharp decline from the previous session as renewed diplomatic efforts involving Iran and Ukraine raised expectations that global petroleum supply disruptions could eventually ease.Brent crude futures declined to approximately $103.14 per barrel, while U.S. West Texas Intermediate fell to $95.79 in intraday trading. Both benchmarks were approaching their lowest closing levels in several weeks after falling more than 7% on Monday.The retreat reflects a reassessment of the geopolitical risk premium that has supported crude prices during months of conflict and shipping disruptions across the Middle East.Iran and the United States remain far from a peace agreement, although Qatar continues mediating negotiations aimed at ending hostilities. Iranian officials have expressed willingness to pursue diplomacy, but significant disagreements remain over the conditions necessary for a settlement.The uncertainty intensified following reports of limited U.S. strikes against Iranian targets on Qeshm Island, near the Strait of Hormuz, a critical transportation route for global petroleum exports.Before the conflict, approximately one-fifth of the world’s oil supplies moved through the strait. Continued restrictions on tanker traffic have increased shipping costs and complicated crude deliveries to international markets.Saudi Aramco is expanding pipeline infrastructure that allows additional crude shipments to bypass the Strait of Hormuz, underscoring the importance of alternative export routes as producers respond to regional security risks.Developments involving Russia and Ukraine are also influencing petroleum markets.Representatives from Russia, Ukraine, and the United States are scheduled to meet in Abu Dhabi on November 10 and 11 for another round of negotiations.A potential settlement could eventually facilitate additional Russian petroleum exports if sanctions restrictions are relaxed. However, military activity continues, with attacks affecting Ukrainian energy infrastructure and Russian refining operations.Meanwhile, traders are awaiting U.S. petroleum inventory reports for further indications of near-term supply conditions.Analysts expect commercial crude inventories to increase by approximately two million barrels in the latest reporting week, potentially ending four consecutive weeks of declines.A confirmed increase could place additional pressure on prices, particularly if refinery demand weakens or domestic production remains elevated.Despite the recent selloff, concerns about global supply security remain substantial. ADNOC Chief Executive Sultan Al Jaber recently estimated that nearly one billion barrels have been withdrawn from worldwide oil inventories since the conflict disrupted shipments through the Strait of Hormuz.For energy investors, the decline presents competing implications.Lower crude prices could reduce revenue and free cash flow expectations for upstream producers while potentially benefiting refiners, transportation companies, and industrial energy consumers.However, diplomatic optimism does not immediately restore damaged infrastructure, normalize tanker movements, or replenish depleted inventories.The direction of crude prices will increasingly depend on whether negotiations produce measurable improvements in physical petroleum supplies rather than temporary changes in market sentiment.Disclaimer This informational, opinion, and insights article is provided for informational purposes only and does not constitute investment, legal, or financial advice. The views expressed are based on publicly available information and market conditions at the time of publication and are subject to change without notice.