Oil prices tumble for the week as investors weigh Iran conflict risk after midterm elections
Quick Look
- Crude oil prices fell sharply for the week as investors weighed renewed U.S.-Iran military escalation risks after the midterm elections.
- Brent dropped over 16% and U.S. crude nearly 13%, despite small Friday gains.
- Analyst Bob McNally sees an 80% probability of fighting resuming and forecasts both benchmarks above $100 a barrel, while Iran reportedly sent a nuclear proposal to Washington via Qatar.
AI-generated summary
Why It Matters
Crude oil prices posted a steep weekly loss as investors weighed the risk of renewed military escalation between the U.S. and Iran following the midterm elections. Brent crude futures added 3 cents to close at $98.32 per barrel, while U.S. West Texas Intermediate crude futures gained 31 cents to settle at $90.83 per barrel. Brent fell more than 16% for the week while U.S. crude lost nearly 13%.
Crude oil prices on Friday posted a steep weekly loss, as investors weighed the risk of renewed military escalation between the U.S. and Iran following the midterm elections.
International benchmark Brent crude futures added 3 cents to close at $98.32 per barrel. U.S. West Texas Intermediate crude futures gained 31 cents to settle at $90.83 per barrel. Brent fell more than 16% for the week while U.S. crude lost nearly 13%.
Investors are assessing whether the conclusion of the U.S. midterm elections could pave the way for renewed actions against Iran, potentially threatening oil supplies from the Middle East.
Bob McNally, Rapidan Energy Group founder and president, told CNBC's "Squawk Box Asia" that he sees an 80% probability of military fighting resuming, forecasting that both oil benchmarks could climb above $100 a barrel.
However, hopes for a diplomatic resolution have also emerged after Iran reportedly sent a nuclear proposal to Washington through Qatar, Reuters reported, citing a senior Iranian official.
Iran reported three additional attacks on oil tankers in the Strait of Hormuz on Thursday, while data from the UK Maritime Trade Operations (UKMTO) indicated that attacks on vessels were continuing at a near-record rate.
"President Donald Trump is determined, as a legacy item, almost at all costs, to prevent Iran from getting a nuclear weapon, having them give up their nuclear capabilities," McNally said.
"The Iranian regime, on the other hand, is not willing to do it. And as long as that core difference in that deal space is absent, the escalation dynamic remains in place," he added.
McNally's view is shared by other analysts, including Lombard Odier's chief economist Samy Chaar and head of investment strategy Luca Bindelli.
— CNBC's Lim Hui Jie contributed to this report.
What to Watch
AI outlook — possibilities, not facts
Both Brent and WTI crude benchmarks could climb above $100 per barrel if military fighting resumes between the U.S. and Iran.
Possible · Within weeks
Open Questions
- Will the U.S. take military action against Iran following the midterm elections?
- What specific terms are in Iran's nuclear proposal sent through Qatar?
- Will oil prices climb above $100 per barrel as forecast?
