Crude crashes below $100: Brent, WTI hit over two-month lows after midterm elections

Oil prices continued to ease on Thursday, with Brent crude and US West Texas Intermediate (WTI) tumbling below the $100-per-barrel threshold. Brent slipped below the $95-per-barrel mark, while WTI fell below $90, as markets continued to react to the political fallout of the US midterm elections and the possibility of an end to the war with Iran. Brent crude futures fell 50 cents, or 0.53%, to $94.12 a barrel, while WTI crude declined 61 cents, or 0.69%, to $87.51. The latest movement follows Wednesday's sharp sell-off, when both benchmarks lost more than 8% and settled at their lowest levels in over two months. Brent ended the session at $94.62 a barrel, shedding $8.98 or 8.7%, while WTI settled at $88.12, down $7.97 or 8.3%. Both contracts recorded their lowest closing levels since August 31.

The market reaction came after Republicans lost control of Congress in the midterm elections, raising expectations that US President Donald Trump could face greater pressure to bring the US-Israeli war with Iran to an end. The election outcome has also complicated Washington's options in the conflict. With Democrats taking control of the House of Representatives and the Senate, Trump could find it harder to pursue further military action. Two sources close to Gulf government circles told Reuters that the weakened political position gave him greater reason to pursue a negotiated settlement, making a full-scale assault on Iran less likely. However, the possibility of a deal does not necessarily rule out further escalation. Gulf analysts said an agreement that allows Iran to claim a clear victory while leaving Trump appearing defeated could encourage recklessness rather than restraint.

Trump told the Financial Times earlier this week that the US had no immediate plans to strike Iran. A day later, he acknowledged that the conflict had contributed to his party's sweeping defeat in the midterm elections. Vice president JD Vance also questioned the decision to enter the war on Wednesday, distancing himself from it and blaming the conflict entirely for the Republicans' electoral setback. Tehran, however, has indicated that a change in political control in Washington would not alter its position towards the US. Iran's Supreme Leader Ayatollah Mojtaba Khamenei said in a written statement that American hostility would continue regardless of which party was in power. There were also fresh developments in the region, with Yemen's Houthis claiming to have targeted King Khalid International Airport in Riyadh.

Diplomatic efforts to prevent another escalation have gathered pace, with Qatar stepping up mediation following the US elections. But the prospect of an immediate breakthrough remains uncertain. Meanwhile, regional energy flows continue to be disrupted. The United Arab Emirates is also looking at ways to reduce its reliance on the Strait of Hormuz, considering a third oil pipeline. Separately, US oil stockpiles recorded a decline last week. The Energy Information Administration said crude inventories dropped by 865,000 barrels to 409.8 million barrels in the week ended October 30. This was sharply different from expectations in a Reuters poll, where analysts had forecast an increase of 877,000 barrels.