WTI falls 9% as hopes of an end to Iran war grow after US election results

• WTI drops below $90 as markets assess how the US midterm elections could affect the Iran war.
• A Democratic win in the US midterm elections increases the likelihood of political pressure to bring the war with Iran to an end.
• An unexpected draw in US crude inventories fails to stem the steep fall in oil prices.

A 9% fall in West Texas Intermediate (WTI) on Wednesday leaves the US crude benchmark trading at around $87 a barrel at the time of writing, a four-week low. Although the immediate catalyst for the sell-off is unclear, it could reflect the Democrats’ victory in the US midterm elections and the resulting potential for pressure on President Donald Trump to end the war with Iran.

With Democratic majorities in both the House and Senate, lawmakers could have greater room to curb funding for the war with Iran. “We will end the war,” said Senate Democratic Leader Chuck Schumer, who added that some Republicans had joined the initiative.

Having previously suggested that attacks could restart after the elections, Trump has since downplayed the likelihood of imminent military action. He said the US had no immediate plans to strike Iran.

According to CBS News, Trump is also discussing the possible replacement of Defense Secretary Pete Hegseth with advisers, although a decision has yet to be reached. Trump “has full confidence in Secretary Hegseth.” That was the response from White House spokeswoman Anna Kelly.

Diplomatic efforts continue, but the outlook for negotiations remains uncertain. Qatari mediators travelled to Tehran on Monday evening to discuss a potential US-Iran agreement with Iranian Foreign Minister Abbas Araghchi, Reuters reported.

US crude oil stocks declined by 865K barrels last week, rather than rising by the 900K barrels expected, figures from the Energy Information Administration (EIA) showed. The preceding week had recorded a draw of 1.462 million barrels.