Oil Prices Slide for Fourth Straight Day as Democratic Midterm Sweep Fuels Bets on Diplomatic End to Iran War

NEW YORK — Oil prices fell for a fourth straight session on Thursday, extending a steep selloff as traders bet that Democrats' sweeping midterm victories will increase pressure on President Donald Trump to wind down the U.S. war with Iran.

Brent futures fell 97 cents, or 1.03%, to $93.65 a barrel as of 0211 GMT, while U.S. West Texas Intermediate crude futures were down $1.14, or 1.29%, to $86.98.

The decline followed a dramatic drop on Wednesday. Both benchmarks tumbled by more than 8% in the previous session to settle at their lowest since Aug. 31. WTI posted its biggest loss since May.

Election shifts war calculus

Traders linked the selloff directly to the political shift in Washington. Prices fell on expectations that the losses Trump's Republican Party suffered in congressional elections may reduce the risk of further escalation of the U.S.-Israeli war on Iran.

The White House itself connected the war to the election results. Markets increasingly priced in an end to the Iran war after the White House linked Republicans' midterm losses to the conflict, with Washington and Tehran signaling openness to negotiations. Trump told reporters that Iran wants "to make a deal and that could happen."

Trump and Vice President JD Vance blamed the Iran war for the Republican Party's electoral setback, as rising living costs linked to the conflict reportedly contributed to voter dissatisfaction.

A Democratic Congress could also restrict war funding. Dennis Kissler, senior vice president of trading at BOK Financial, said the new balance of power could tighten U.S. military spending in the Middle East and "further heighten the possibility of a peace deal sooner rather than later."

A sharp reversal from recent highs

The decline marks a striking turnaround. Brent had traded near $118 last Friday before the downturn. Energy traders, who had built geopolitical risk premiums into prices through October, quickly unwound speculative long positions, pushing crude down by more than 14% across the week.

Supply data also weighed on prices. JPMorgan estimates the oil market returned to a surplus of 1.1 million barrels per day in September, widening to 1.4 million bpd in October.

Relief for importers

The drop was welcomed by oil-importing economies. Indian stock benchmarks surged in early trade Thursday amid the sharp decline in crude prices and hopes for a resolution to the conflict. Geojit Investments strategist V.K. Vijayakumar said the sharp fall in Brent was the strongest positive for the market.

Rally may not last

Not all analysts expect prices to stay low. Asked whether prices were likely to remain lower after the election, Mukesh Sahdev, CEO of energy consultancy XAnalysts, said, "The short answer is no."

Risks to supply remain in the region. Gulf exports of crude, condensate and refined products averaged 17.1 million barrels per day in October, roughly three-quarters of prewar levels, according to Vortexa ship-tracking data. Iran's Supreme Leader Ayatollah Mojtaba Khamenei said U.S. hostility would persist regardless of which party is in power.

Some forecasters still see elevated prices ahead. Trading Economics models expect Brent to trade at $116.80 a barrel by the end of the quarter.

Investors will watch for any formal talks between Washington and Tehran, as well as weekly U.S. inventory data, for further direction.