Crude Prices Fall on Lower Risk of Iran War Escalation

By Adedapo Adesanya

Crude oil prices fell for a fourth day on Thursday, as expectations that the loss US President Donald Trump’s Republican Party suffered in Congressional elections this week ​may reduce the risk of further escalation of the US-Israeli war on Iran.

Brent futures fell by 80 cents or ‌0.85 per cent to $93.82 a barrel, while US West Texas Intermediate (WTI) crude futures were down $1.2 or 1.36 per cent to $86.92 per barrel.

In the US midterm elections, the Democratic Party took over the US Congress, weakening President Trump’s party.

Market analysts noted that a weakened Mr Trump has greater ​incentive to seek a deal, with a full-scale assault on ​Iran now looking less likely.

A resolution to the conflict could restore oil flows from ⁠the Middle East impacted by the war, though analysts caution the way forward remains uncertain.

President Trump told Fox News on Tuesday night that “I think it’s the gasoline price” when explaining the Republican defeat. He already told the Financial Times that the US had no immediate plans to strike Iran.

Vice President JD Vance wrote on X that the war was the reason for the losses, and that “any honest conversation about where we go from here must start there.”

Crude shipments through the Strait of Hormuz, the key waterway for most ​Gulf oil supplies, have recovered to close to pre-war levels, according to analysts, though at a higher cost.

The resumption of Gulf ​supply has pushed the global oil market back into surplus after months of disruption caused by the war, JPMorgan said in a note on Wednesday.

JPMorgan ‌estimates ⁠the market returned to a surplus of 1.1 million barrels per day in September, widening to 1.4 million barrels per day in October, nearly matching last year’s average of 1.3 million barrels per day.

However, uncertainty remains before the Democratic-controlled Congress takes office in January.

Crude oil inventories in the US saw a decrease of 900,000 barrels during the week ending October 30, according to data from the US Energy Information Administration (EIA) released on Wednesday.

The EIA’s data release follows figures from the American Petroleum Institute (API) that were released a day earlier, which reported that crude oil inventories had fallen by 5.267 million barrels in the period.