Oil prices dip after Trump says no Iran attack before midterms

Oil prices experienced a dip on Friday as concerns over Middle East supplies subsided following U.S. President Donald Trump's announcement that there would be no new attacks on Iran before the midterm elections. However, the decline was restrained by ongoing disruptions in Middle Eastern supplies, as well as anticipation of outages in the U.S. Gulf coast due to Hurricane Isaias, which is projected to make landfall in the coming days.

Brent oil futures for December dropped 0.8% to $103.45 a barrel, while West Texas Intermediate crude futures for November fell 0.7% to $90.86 a barrel. The market saw a slight recovery in crude during the Thursday trading session, but still ended the day up nearly 4% after Trump indicated Washington wouldn't be attacking Iran prior to the November midterm elections, following reports that such a move was being contemplated.

Trump also mentioned "productive discussions" with Iran. Iranian media sources reported that the country was evaluating America's response to their proposal to reopen the Strait of Hormuz. Iranian attacks on tankers in Hormuz reached their peak last week, surpassing any previous week since the U.S.-Iran war commenced in February, causing shipping levels in the region to plummet sharply.

This sparked significant gains in crude prices. Additionally, tensions between Saudi Arabia and Iran-backed Houthis in Yemen persisted, further heightening concerns over potential supply disruptions, particularly through the Red Sea. Yet, oil prices had taken a tumble earlier in the week due to reports indicating Saudi Arabia's oil exports were rapidly rebounding, while flows through the Strait of Hormuz briefly exceeded pre-war levels.

The situation was further exacerbated by increased anxiety over potential outages in the U.S. Gulf coast as Hurricane Isaias approached, expected to make landfall over the weekend. Major oil and gas companies like BP, Chevron, and Shell were evacuating their offshore facilities in response to the impending storm. According to the Bureau of Safety and Environmental Enforcement, 1.28 million barrels of oil per day—about 63% of the daily oil production in the Gulf coast—were being shut in because of the impending weather event.

Altogether, 121 platforms were evacuated, and natural gas production in the region was down by approximately 57%.