New York —Oil prices recovered part of their post-election slide on Thursday, with Brent crude settling at $98.29 a barrel, up $3.67, or 3.9 percent, as traders questioned whether the US midterm results would hasten an end to the Iran war. Brent extended the gain in Asian trading and stood at $100.21 as of 04:15 GMT on Friday, while West Texas Intermediate was at $91.90.
The bounce followed one of the sharpest selloffs of the year. Brent fell $8.98, or 8.7 percent, on Wednesday to settle at $94.62, and WTI dropped $7.97, or 8.3 percent, according to OilPrice.com, after Democrats won control of both the House and the Senate. Bloomberg and The Washington Post described the level as a two-month low. Separately, Yahoo Finance reported that oil had suffered its worst three-day drop since 2021.
Traders had read the election results as raising the odds of a quicker end to the conflict, which began with the US and Israeli offensive against Iran on February 28. Those bets faded on Thursday, according to OilPrice.com, which reported that Eurasia Group cut its odds of a negotiated agreement to 10 percent from 20 percent and put the likelihood of renewed US strikes at 60 percent. Iran’s navy also reported that a tanker struck a mine east of the Strait of Hormuz and caught fire, the outlet said.
WTI settled Thursday at $90.52, more than $2 higher on the day. The rebound came even as broader markets sold off: the S&P 500 fell 4.36 percent to 7,353.73. Morningstar reported the decline as an AI selloff that gathered steam on the election fallout. The US Dollar Index was up 0.25 percent at 101.80 early Friday.
WTI crude recovered part of Wednesday's post-election plunge
WTI crude oil, US dollars per barrel, selected intraday readings, Nov. 2 to Nov. 6 (GMT)
Source: Delayed market data via Economy & Markets
Energy stocks lag the crude bounce
Producers did not share in the recovery. The Energy Select Sector SPDR ETF fell 1.6 percent to $62.50 on Thursday, according to OilPrice.com, which said energy stocks tracked the broader market lower despite the rebound in crude. Yahoo Finance also reported that energy shares were not joining oil’s bounce. OilPrice.com noted that Democratic committee chairs are set to use new subpoena powers from January to investigate the administration’s energy dealings.
Treasury targets shadow-fleet flagging network
Washington also kept up pressure on Iranian oil flows. On Wednesday the Treasury Department sanctioned a network led by India-based Suniel Kumar Sharma and his spouse, Jaspreet Preeti Shahid, which it said supplied false flags and certifications to sanctioned vessels carrying Iranian petroleum, including ships operating on behalf of the Iranian military and its proxies. The action, taken under Executive Order 13902, designated Sharma, Shahid, two associates and a group of India- and Singapore-based companies, and was accompanied by a new alert to the shipping industry on the sanctions risks of dealing with potentially falsely flagged vessels.
“As we have said many times, under Operation Economic Outcast, you are either with us or against us. We know where you are, and we will sanction those who continue supporting the Iranian regime, whether by land, sea, or air.”
The Treasury said the network’s fraudulent registries purported to represent countries including Aruba, Guyana, Mali, Mozambique, Malawi, Sint Maarten and Timor-Leste. The designations are part of Operation Economic Outcast, which Bessent announced on August 24 to sever what the department called the remaining economic lifelines sustaining the Iranian government.
What to watch
Despite the rebound, Reuters reported early Friday that crude was still headed for a sharp weekly decline, with Middle East supply concerns providing a floor, and separately reported fresh signs of a supply glut as high prices curb demand. Traders will also watch the October jobs report, which the Bureau of Labor Statistics is scheduled to release at 8:30 a.m. Eastern time on Friday.