Global oil prices plunged nearly 9% on Wednesday, November 4, after Democrats seized control of both chambers of the United States Congress, raising hopes that President Donald Trump could face pressure to end the ongoing war with Iran.
Brent crude futures, the international benchmark, fell $9.27, or 8.9%, to $94.29 per barrel by 1658 GMT, hitting their lowest level since September 4.
Meanwhile, US West Texas Intermediate (WTI) crude dropped $7.44, or 7.8%, to $88.54 per barrel, as traders assessed the implications of the Republican Party’s defeat in Tuesday’s midterm elections.
The sharp decline came after Trump acknowledged that the war with Iran had contributed to Republican losses, which handed Democrats control of the Senate and House of Representatives.
Investors believe a Democrat-controlled Congress could make it harder for the Trump administration to secure funding for further military operations in the Middle East.
Trump also told the Financial Times on Tuesday that Washington had no immediate plans to launch fresh strikes against Iran.
Dennis Kissler, an analyst at BOK Financial, said the prospect of tighter congressional control over military spending, combined with recovering Middle Eastern oil exports, had increased expectations of a possible peace agreement.
However, diplomatic efforts have yet to produce a breakthrough.
Qatar has stepped up mediation between Washington and Tehran, although a senior Iranian official told Reuters that both countries remain far from reaching an agreement.
The decline also follows a recovery in Middle Eastern oil shipments, easing concerns about disruptions to global energy supplies.
According to shipping data firm Vortexa, exports of crude oil, condensate and refined products from the Gulf averaged 17.1 million barrels per day in October.
The sell-off extended to energy companies, with shares of ExxonMobil and ConocoPhillips also falling as investors reassessed the outlook for oil prices.
