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US-Israel-Iran War Latest Live News: Oil markets are suddenly looking at the US midterm election results as a possible turning point for the months-long US-Iran conflict. Crude prices extended their sharp decline on Thursday, November 5, after Brent fell 8.7% in the previous session and slipped further below the $95-a-barrel level.
Traders are betting that a Democratic-controlled Congress could increase political pressure on US President Donald Trump to pursue diplomacy with Iran, potentially reducing the risk of further disruption to Middle Eastern oil supplies. Brent crude was recently around $93.65 a barrel, down 1.03%, while US West Texas Intermediate (WTI) fell 1.29% to about $86.98.
The latest fall came after both benchmarks suffered losses of more than 8% in the previous session.
Oil Prices Today: Why Are Oil Prices Falling After the US Midterm Election?
The biggest change in the oil market is the political outlook for the Iran conflict.
Democrats won control of both chambers of Congress in the November 3 midterm elections, ending Republican control of Washington. Investors now expect Congress to have more influence over Trump’s approach to the war with Iran and potentially push the administration towards negotiations.
The expectation has already changed the way traders view the risk premium built into crude prices. If Washington and Tehran move closer to a diplomatic settlement, traders could expect more stable oil flows from the Middle East.
Reuters reported that Gulf oil exports had recovered to about 17.1 million barrels per day in October, around three-quarters of pre-war levels.
US-Israel-Iran War Latest Live News: JD Vance Blames Iran War For Republican Election Loss
The political fallout from the election has also directly affected oil markets.
US Vice President JD Vance blamed the Iran war for the Republican defeat, saying, “The reason we lost is the war,” in a social media post.
Trump has also acknowledged that the conflict contributed to the Republican losses, although he has rejected the idea that the result represented a personal repudiation of his presidency. At the same time, he has said there are no immediate plans for another major strike against Iran.
Those signals have reduced fears that the conflict could immediately expand and threaten even more energy infrastructure and shipping routes.
Oil Prices Today: Brent Crude Falls Nearly 16% This Week
The scale of the weekly decline shows just how quickly sentiment has changed.
Brent crude has fallen nearly 16% so far this week after rising sharply in October as traders prepared for the possibility of further military escalation. Reuters reported that Brent dropped 8.7% to $94.62 on Wednesday, its lowest level since August 31. WTI fell 8.3% to $88.12.
The latest decline follows an earlier drop as Washington and Tehran showed signs of being open to talks. Bloomberg also reported that Middle Eastern oil supply had begun exceeding near-term demand, adding further pressure to prices.
The market is therefore dealing with two opposing forces: the possibility of peace is pushing prices down, while the possibility of renewed conflict remains a major risk.
US-Israel-Iran War Latest Live News: US-Iran Peace Deal Could Push Oil Prices Even Lower
A successful diplomatic agreement could have a major impact on crude prices.
A reduction in fighting would lower the risk of further attacks on oil infrastructure and shipping routes. It could also allow more Middle Eastern crude to reach international buyers.
Reuters reported that oil shipments through the Strait of Hormuz have nearly returned to pre-war levels. JPMorgan estimated that the global oil market had moved into surplus, with the surplus reaching about 1.4 million barrels per day in October.
That means a sustained improvement in supply could keep downward pressure on crude even if demand remains steady.
However, the market is not treating a peace deal as guaranteed.
Qatar has intensified mediation efforts, but Iranian officials have indicated that Washington and Tehran remain far apart on the terms of a possible agreement. Reuters also reported that analysts remain concerned that failed negotiations or an agreement seen as favouring Iran could trigger renewed escalation.
Oil Prices Today: US Oil Inventory Data Also Gives The Market A Mixed Signal
Supply and demand data from the United States is adding another layer to the oil-price outlook.
The user-provided market data showed a sharp fall in US crude inventories, with stocks declining by 5.27 million barrels in the week ended October 30, against expectations for an increase.
However, the latest Reuters report put the official draw at a smaller 865,000 barrels.
US gasoline inventories increased, while distillate stocks declined. The mixed figures suggest that underlying fuel demand remains an important factor for crude prices, even as geopolitical developments dominate trading.
Reuters said US demand had reached its highest level in a year, while commercial oil inventories in major consuming countries remained near 15-year lows.
US-Israel-Iran War Latest Live News: Can Oil Prices Fall Further?
Oil prices could remain under pressure if diplomatic efforts make progress.
A sustained reduction in the US-Iran conflict would remove part of the geopolitical premium that pushed crude sharply higher earlier in the year. Increasing oil flows through the Gulf could also leave the market with more supply than immediate demand.
But the decline may not continue in a straight line.
Any new military strike, breakdown in negotiations or fresh disruption to shipping could quickly push crude prices higher again. Reuters noted that geopolitical risks remain despite the recent decline, while low commercial inventories leave the market vulnerable to another supply shock.
For now, traders are watching Washington and Tehran more closely than ever. The US midterm election has changed the political calculation around the Iran war, and that change is already being reflected in crude prices.