Oil plunges as traders reassess the Iran war after the election
U.S. crude falls below $90 a barrel as expectations of a possible diplomatic opening shake the market.
Oil prices plunged Wednesday as traders reassessed the outlook for the Iran war after Democrats won control of Congress in the U.S. midterm elections.
U.S. West Texas Intermediate crude was nearly 9% lower at $87.59 a barrel at 12:36 PM ET, CNBC reported. Brent, the international benchmark, was down more than 9% at $93.91. Those are timestamped intraday prices, not closing settlements.
The selloff had already crossed 4% earlier in the session. At 11:19 AM ET, Brent was down 4.3% at $99.07 and WTI was down 4.3% at $92.02, according to Reuters. The later figures show how sharply the decline deepened.
Analysts linked the move to expectations that the election result could increase pressure for a diplomatic deal with Iran. CNBC cited oil-market analysts who said President Donald Trump may now have a stronger incentive to reach an agreement. That is an assessment of political incentives, not confirmation that a peace deal has been reached.
The risk runs both ways. Analysts quoted by CNBC and Reuters also warned that military escalation remains possible. A fall in the price investors are willing to pay for oil does not establish that supply disruptions are over.
The price slide is separate from Wednesday's U.S. inventory report, which showed declines in crude and finished-fuel stocks. For the next stage of trading, the key distinction is between expectations of more secure energy supplies and evidence that those supplies can actually move.
