Oil Falls 8% to $95 as Traders Weigh Iran War Talks After US Midterms

Brent futures were down $7.50, or 8 per cent, at $95.43 a barrel in the latest trading, while US West Texas Intermediate fell $7.13, or 7.2 per cent, to $98.02, according to Reuters data cited by Al Bayan. The drop followed a previous session in which Brent closed at its lowest level in about four weeks, as markets weighed the chances of progress in talks to end the war with Iran and in negotiations over the war in Ukraine.

Why Prices Fell

Analysts pointed to two main sources of pressure, Al Bayan reported: rising oil exports from the Middle East, and remarks by US President Donald Trump that there were no immediate plans to strike Iran. The midterm results added to speculation that US military spending in the region could be scaled back, which some traders see as opening room for a political settlement.

A deal is far from certain. Reuters quoted a senior Iranian official as saying Washington and Tehran remain far apart on an agreement to end the war, while Qatari mediation continues in an effort to narrow the gap and prevent further attacks. Traders warned that if diplomacy stalls, renewed escalation could quickly restore the geopolitical risk premium to prices.

Gulf Supply and a Possible New Pipeline

Ship-tracking data from Vortexa showed that Gulf exports of crude oil, condensate and refined products, excluding liquefied petroleum gas, averaged 17.1 million barrels a day in October, down from about 18.9 million barrels a day in September. Even after that decline, flows are running at roughly three quarters of their pre-war level, which points to a continuing recovery in regional supply.

Separately, Bloomberg reported, citing people familiar with the matter, that the UAE is considering building a third crude export pipeline that would bypass the Strait of Hormuz. The aim would be to give the country more flexible export routes and reduce its reliance on the waterway, through which much of the Gulf's oil normally passes. No official confirmation of the plan was reported.

US Inventories Offer Some Support

US stockpile data limited the losses. The Energy Information Administration said crude inventories fell by 865,000 barrels in the week ended October 30 to 409.8 million barrels, against analysts' expectations of an 877,000-barrel increase. Gasoline and distillate stocks also fell during the week. Preliminary figures from the American Petroleum Institute had earlier shown a crude draw of about 5.27 million barrels.

The market is caught between expectations of better supply and lower disruption risk on one side, and falling US inventories and continuing uncertainty over the war and the negotiations on the other.

What It Means for the Gulf

For Gulf producers and their governments, the move matters on two fronts. Lower prices reduce oil revenue at a time when export volumes are still recovering from wartime disruption. At the same time, the reported pipeline study shows how the conflict has pushed the UAE to treat export-route resilience as a strategic priority, which could mean new spending on energy infrastructure regardless of where prices settle.

The sell-off came on the same day that US stocks rallied after the election, with the Dow Jones Industrial Average gaining about 1,203 points, as investors priced in a Congress likely to check sharp policy changes from the White House.