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

Oil prices experienced a decline on Friday, with the expectation of a significant weekly drop, as US President Donald Trump's Republican Party faced significant setbacks in the recent midterm elections. Elevated concerns over the Iran conflict continued to bolster oil prices, as the ongoing regional tension persists. Brent crude, a critical benchmark for two-thirds of the global oil market, surged by 1.68% to $99.94 per barrel, while West Texas Intermediate (WTI), which tracks US crude, climbed 1.33% to $91.72 per barrel.

Forecasts suggest Brent could plummet by approximately 12% this week, while WTI may suffer a 12.1% decline. Oil prices plummeted sharply this week following the US midterm elections, wherein the Republicans suffered heavy losses, with Democrats gaining control of both the House of Representatives and the Senate. The outcome was widely perceived as a rebuke of Trump regarding the Iran war.

Trump himself acknowledged the impact of the war on the election results during a post on social media, stating that the reason for their loss was the war. Both benchmarks experienced more than 8% decline on Wednesday following the election results, settling at their lowest levels since August 31. Brent closed 8.7% lower at $94.62 per barrel, while WTI slipped 8.3% to $88.12 per barrel.

Prices recovered some of their losses on Thursday and surged again in early trade on Friday, amid ongoing uncertainty surrounding the Iran war. Trump mentioned his decision to either resume attacks on Iran or negotiate an agreement after consulting with his national security advisers.