Oil Falls Below $100 as Chance of Renewed Iran Strikes Dips
Oil prices dropped as markets and investors expect that the losses faced by US President Donald Trump’s Republican Party in this week’s Congressional elections could lower the chances of the US-Israeli war with Iran getting worse.
Brent futures dropped 80 cents, or 0.85 percent, to $93.82 a barrel. US West Texas Intermediate crude futures fell $1.20, or 1.36 percent, to $86.92. Both benchmarks fell over 8 percent in the previous session, reaching their lowest levels since August 31.
With Trump weakened and a Democratic Congress able to limit his military options, he now has more reason to seek a deal, according to two sources close to Gulf government circles. They said a full-scale attack on Iran now seems less likely.
If the conflict is resolved, oil flows from the war-affected Middle East could return. However, analysts warn the future remains uncertain.
“Markets are looking at how the midterm elections might affect Donald Trump’s next moves in the Iran war, and are now seeing a higher chance that the war could end,” said June Goh, senior oil analyst at Sparta Commodities.
“However, more volatility is likely because the road to full diplomacy to end the war is still full of unknowns, and global strategic reserves are now very low.”
Crude shipments through the Strait of Hormuz, the main route for most Gulf oil supplies, have almost returned to pre-war levels, analysts say, but costs are higher now.
JPMorgan said in a note on Wednesday that the return of Gulf oil supply has put the global oil market back into surplus after months of war-related disruption.
JPMorgan estimates the market returned to a surplus of 1.1 million barrels per day in September, widening to 1.4 million bpd in October, nearly matching last year’s average of 1.3 million bpd.
Still, analysts say uncertainty remains as the Democratic-controlled Congress prepares to take office in January.
Citi said in a note on Thursday that concerns remain. Now that the midterms are over, the White House might use its executive powers in foreign policy and could possibly increase tensions with Iran.
Eurasia Group lowered its estimate for the chance of new US strikes on Iran to 60 percent from 65 percent. It also reduced the chance of a deal to 10 percent from 20 percent, since Iran has stuck to its demands and Trump is unlikely to accept terms that look like a defeat.
The group raised the likelihood of a continued standoff to 30 percent from 15 percent. A recent drop in oil prices and escalation are likely to push Brent into a band of $110 to $125 per barrel, Eurasia Group said in a note.
Commercial oil inventories in major consuming countries are now near their lowest level in 15 years. The Energy Information Administration said on Wednesday that US crude, gasoline, and distillate inventories all fell last week as demand hit a year-high.
Analysts and traders say the global oil market is showing signs of excess supply again, as demand falls because of high prices. This is happening even though the Iran war, which has disrupted Middle East exports since March, is still unresolved.
At the start of 2026, many expected a surplus. But when the Iran war broke out in late February, the International Energy Agency called it the world’s biggest-ever supply disruption, which cut Middle East exports and changed those surplus forecasts.Oil Prices Surge as US Strikes Iran’s Island, Brent Tops $106
