Oil prices fall for the fourth consecutive day amid expectations of reduced risk of war escalation
Oil prices declined for the fourth straight day on Thursday, driven by expectations that the losses suffered byTrump’s Republican Party in this week’s congressional elections could lower the risk of further escalation in the conflict between the U.S.-Israel axis and Iran.
As of GMT 04:26, Brent crude futures fell by 80 cents (0.85%) to $93.82 per barrel, while U.S. West Texas Intermediate (WTI) crude futures dropped by $1.20 (1.36%) to $86.92 per barrel.
Both benchmarks had lost more than 8% in the previous session, falling to their lowest levels since August 31.
Sources indicated that the prospect of a large-scale attack on Iran now appears less likely. With a Congress leaning toward the Democratic Party—which could constrain his military options—and a weakened political position, Trump may now have greater motivation to reach an agreement.
A resolution to the conflict could restore oil flows from the Middle East, which the war has disrupted. However, it remains unclear how the situation will unfold.
Markets are currently assessing the impact of the midterm elections on the steps Donald Trump might take regarding the conflict with Iran. They are factoring in the possibility that the war could come to an end. Nevertheless, there remain many unknowns regarding a comprehensive diplomatic path toward ending the conflict, and global strategic reserves have been significantly depleted—a situation that points to the potential for increased volatility in the period ahead.
In the current landscape, the volume of crude oil shipments from the Middie East has returned to levels near those seen before the conflict, albeit at a higher cost.
With the resumption of supply from the Gulf, the global oil market has entered a period of surplus once again, following months of disruptions caused by the conflict. In September, the market returned to a surplus of 1.1 million barrels per day, and by October, this figure had risen to 1.4 million barrels per day—a level comparable to last year’s average of 1.3 million barrels per day.
Analysts note that uncertainty persists as the country heads toward January, when a Congress under Democratic control is set to take office.
Meanwhile, with the midterm elections concluded, the White House may shift its focus toward exercising its executive powers in foreign policy, potentially escalating tensions with Iran.
Commercial oil inventories in major consuming nations are currently near their lowest levels in 15 years, and it is possible that Iran may adopt a more assertive stance depending on the outcome of the U.S. elections.
Data released on Wednesday by the U.S. Energy Information Administration (EIA) shows that U.S. inventories of crude oil, gasoline, and distillates all declined last week, even as demand reached its highest level in a year.
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