Oil markets head into Sunday evening’s reopen after their steepest weekly selloff in months, with December West Texas Intermediate settling Friday at $90.83 a barrel, down 12.8% on the week, on hopes that a sweeping Democratic midterm victory will hasten the end of the Iran war. Energy analysts say the facts on the ground point the other way, and that drivers could feel it at the pump if fighting resumes.
Most of the drop landed on Monday and the day after the election, and Brent crude ended the week above $97. The slide accelerated after Vice President JD Vance publicly blamed the Republicans’ stinging midterm loss on the war, raising questions about whether the administration still has public support to continue the conflict.
Tensions in the Gulf have only deepened, analysts note. Several oil tankers have come under attack near Oman since the election, killing one seafarer, and a third U.S. carrier strike group is en route to the region. On Sunday, witnesses reported damage to an Aramco office tower in Riyadh’s King Abdullah Financial District after Saudi air defenses said they intercepted two ballistic missiles fired by Yemen’s Houthi forces toward the capital.
Analysts warn the peace discount could vanish fast
“Throughout the week, we were struck by the divergence between deepening escalation concerns in the Gulf and the headline-driven off-ramp optimism of market participants thousands of miles away,” Helima Croft, head of global commodity strategy at RBC Capital Markets, told investors in a note Friday.
Rapidan Energy sees an 80% chance that fighting resumes as diplomacy stalls, and its president, Bob McNally, said crude would vault back above $100 a barrel in response. President Donald Trump has reiterated that he will not allow Iran to have a nuclear weapon, while Democrats, who do not take control of Congress until January, have limited leverage to force a change in policy before then. Amos Hochstein, a former energy adviser to President Joe Biden, warned that gasoline, diesel and jet fuel prices would all surge if the conflict reignites.
The stakes for household budgets are real. Gasoline prices were already the highest of any Election Day on record this week, up nearly 40% from recent years. U.S. futures resume trading at 6 p.m. Eastern on Sunday, with December WTI’s Friday close of $90.83 the reference point for whether the week’s peace discount holds.
JBizNews Desk | New York
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