Brent crude oil for January delivery fell by 0.6% to $97.75 per barrel, marking a total weekly decline of 16.9%. This price drop is recognized as one of the sharpest weekly declines in the oil market.
Market Analysis and Political Implications
West Texas Intermediate (WTI) crude oil for December delivery also closed down 0.2% at $90.36 per barrel. This index also saw a total weekly decrease of 13.2%, which is considered its steepest weekly drop since mid-April.
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Traders are assessing the implications of the Democrats' decisive victory in the recent elections, which has resulted in control of both houses of Congress by this party. Speculation is rife about whether the Democrats will use this new influence to pressure Republican President Donald Trump to find solutions to end the disputes with Iran.
Impacts on Oil Policies
Walt Chancellor, an energy strategist at Macquarie, stated that the change in majority in the House of Representatives and the Senate was anticipated, but the stronger-than-expected performance of the Democrats in the midterm elections has necessitated a reevaluation of expectations surrounding the dispute with Iran. He noted that having a decisive majority in either house of Congress increases the costs for President Trump to continue or escalate the conflict.
Chancellor also pointed out that although Trump still has significant executive powers to attack Iran, the new composition of Congress and its budgetary powers limit his ability to continue such actions to achieve strategic goals.
The end of the Middle East conflict, which began in late February with a joint military incursion by the United States and the Israeli regime into Iran, could lead to the reopening of vital shipping routes in the region. This could have major impacts on the supply and price of oil in the global market.
Read more: 15% Drop in Oil Prices with Hopes for a Peace Agreement Between the U.S. and Iran · Brent Crude Oil Price Reached $88.5 in Global Market
