Oil prices dropped sharply on Wednesday, with Brent crude falling nearly 9% as investors weighed the outlook for the US-Israeli war with Iran following a major midterm election setback for President Donald Trump’s Republican Party.
Brent crude futures fell $9.27, or 8.9%, to $94.29 a barrel by 11:58 a.m. ET (1658 GMT), after touching their lowest level since September 4. US West Texas Intermediate crude futures declined $7.44, or 7.8%, to $88.54 a barrel.
Brent had ended the previous session at its lowest level in nearly four weeks, as traders considered diplomatic efforts to end the wars in Iran and Ukraine.
The decline came amid signs that oil supplies from the Middle East were increasing and after Trump said the US had no immediate plans to strike Iran.
What does the US election result mean for the Iran war?
Democrats won control of both the House of Representatives and the Senate in the midterm elections, dealing a sweeping defeat to Trump’s Republicans. The president acknowledged that the war with Iran had contributed to the result.
Trump told the Financial Times on Tuesday that Washington had no immediate plans to attack Iran. Iran’s Supreme Leader Ayatollah Mojtaba Khamenei, however, said in a written statement that US hostility would continue regardless of which party held power.
Yemen’s Houthis said they had targeted King Khalid International Airport in Riyadh, although Saudi authorities had not confirmed the claim.
Qatar has intensified mediation efforts to prevent further attacks following the US elections. But a senior Iranian official told Reuters on Tuesday that Tehran and Washington remained far from an agreement to end the war.
Middle East oil exports remain below pre-war levels
Exports of crude oil, condensate and refined products from the Gulf, excluding liquefied petroleum gas, averaged 17.1 million barrels per day in October, according to ship-tracking data from Vortexa.
That was down from 18.9 million barrels per day in September, but remained at roughly three-quarters of the level seen before the war.
The United Arab Emirates is also considering building a third oil-export pipeline that would transport crude outside the Strait of Hormuz, Bloomberg reported, citing people familiar with the matter. The move would help the country reduce its reliance on the strategic waterway.
US crude inventories fall unexpectedly
In the US, crude oil, gasoline and distillate stocks declined last week, according to the Energy Information Administration.
Crude inventories fell by 865,000 barrels to 409.8 million barrels in the week ended October 30. Analysts polled by Reuters had expected stocks to rise by 877,000 barrels.
Oil prices tumble 9% as investors weigh US election impact and Iran war outlook
