Brent crude and West Texas Intermediate (WTI) oil prices continued their downward trend in trading on Thursday. The price of a barrel of Brent crude fell by 97 cents, equivalent to 1.03%, reaching $93.65. Additionally, WTI crude also experienced a price drop of $1.14, or 1.29%, settling at $86.98 per barrel.
Analysis of the Oil Market Situation
The two main oil benchmarks had also fallen more than 8% in trading on Wednesday, reaching their lowest levels since August 31, 2023. This price drop is attributed to investors' expectations for accelerated efforts to end the war in the Middle East and the Democrats' victory in the U.S. midterm elections. Sources close to government circles in the Gulf states indicated that Donald Trump will face a Congress controlled by Democrats, which could limit his military options.
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Political and Economic Consequences
According to these sources, the weakening of Trump's political position and the limitation of his powers could create greater motivation to reach an agreement and end the war. The end of this conflict could pave the way for the resumption of oil flows from the Middle East, which have been affected by the war. Jun Gu, a senior oil analyst at Sparta Commodities, stated that markets are assessing the impact of the U.S. midterm elections on Trump's future decisions regarding the war with Iran, and they are factoring in the likelihood of this war ending more than before in the prices.
According to reports, the volume of crude oil shipments passing through the Strait of Hormuz has returned to levels close to those before the war against Iran. However, the transportation of oil shipments through this strategic route still incurs higher costs compared to normal conditions. This situation could impact global oil prices and create new fluctuations in the market.
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