Oil prices set for weekly drop on Trump’s election rout

Oil prices are poised for a significant weekly decline as US President Donald Trump's Republican Party suffers major setbacks in the recent midterm elections. Brent and West Texas Intermediate, two key benchmarks for oil, are projected to drop about 12% and 12.1% respectively over the coming week. This comes as Middle East tensions continue to cast uncertainty over the oil market, with ongoing conflicts in the region and various supply disruptions adding to the volatility.

The recent US midterm elections were a harsh rebuke of Trump's policies on the Iran war, with Democrats gaining control of both the House of Representatives and the Senate. VP Joe Biden emphasized that the loss was primarily due to the ongoing war with Iran. Both oil benchmarks plummeted more than 8% on Wednesday following the election results, settling at their lowest levels since August 31.

Brent closed 8.7% lower at $94.62 a barrel, while WTI fell 8.3% to $88.12. However, prices recovered some of those losses on Thursday and started the week on Friday trading higher, as uncertainty surrounding the Iran situation persists. On Thursday, Trump announced his intention to decide soon whether to resume attacks on Iran or seek an agreement after consulting with his national security advisers.