The price of Brent crude oil has decreased to $100.60 per barrel, indicating a 2.9 percent drop and the third consecutive decline of this index. This drop has occurred as markets react to the potential agreement between the US and Iran, ignoring surrounding threats.
Oil Price Developments
At 9:40 AM Eastern Time, West Texas Intermediate (WTI) crude oil price also fell by $2.86, reaching $93.23 per barrel. Additionally, Murban crude oil price dropped by $1.27 to $100.90. Prior to this decline, both oil indices had experienced price increases in a volatile session.
Statements from US and Iranian Officials
The US government, led by President Donald Trump, has stated that there are no plans to attack Iran. Trump told the media in an interview: "It seems we have gotten everything we wanted." Additionally, Vice President JD Vance has announced that both sides have made progress in their negotiations. A senior Iranian official has also stated that Tehran may reopen the Strait of Hormuz within two days, provided Washington responds to Iran's demands.
However, news related to escalating tensions has not been able to keep prices elevated. Trump has also told the media that there is a possibility of a "heavy blow" to Iran. The Iranian Revolutionary Guard has claimed that four oil tankers have been damaged due to mines in southern Hormuz, but this claim has not yet been independently verified.
Market Analysis
Market analysts believe that prices are influenced by the increasing likelihood of further tensions in the region. According to ING, markets are increasingly reacting to the possibility of new conflicts. Furthermore, the results of the recent midterm elections in the US indicate a Democratic victory in both houses, which could have implications for war financing. Michel Brouhard from Kpler noted that the new Congress will not convene until January 3, giving the government nearly two months to act.
Ultimately, JPMorgan estimates that the global oil market surplus in October has reached 1.4 million barrels per day, up from 1.1 million barrels in September. Middle Eastern exports have also increased to 20.7 million barrels per day, up from their lowest level of 9.8 million barrels per day in March. However, demand has decreased by 3.3 million barrels per day since the onset of the war.
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