Both benchmarks fell more than 8% on Wednesday and settled at their lowest levels since August 31. Brent dropped below $100 for the first time since early October. Reported closing figures vary by a few dollars depending on the time of day they were taken. WTI is now more than $15 below its Friday close of $104, which puts crude on course for its worst week since April 2020. It remains roughly 50% above the near-$57 level where it started 2026, and it peaked near $113 on April 7.

Analysts tied the move to Iran. "Markets are assessing the impact of the midterm elections to Donald Trump's next steps with the Iran war, pricing in more likelihood for the war to end," said June Goh, a senior oil analyst at Sparta Commodities. Trump said on Tuesday that the US has no immediate plans to strike Iran, and he acknowledged the war's role in his party's setback. Vice President JD Vance also blamed the conflict. Two sources close to Gulf governments said a weakened Trump facing a Democratic Congress has more reason to pursue a diplomatic deal with Tehran.

Tehran has given little sign of movement. Supreme Leader Mojtaba Khamenei warned that US hostility would continue whatever the election result, and a senior Iranian official said the two governments remain far from an agreement. Yemen's Houthis claimed to have targeted King Khalid International Airport in Riyadh, which Saudi authorities have not confirmed. Qatar has stepped up its mediation. "We can see an escalation in Iran sooner than a resolution," said Carl Larry of Enverus.

Supply is also pressing on prices. Crude shipments through the Strait of Hormuz have recovered to near pre-war levels, at higher cost. JPMorgan said the global market returned to a surplus of 1.1 million barrels a day in September and 1.4 million in October, against an average of 1.3 million last year. Gulf exports averaged 17.1 million barrels a day in October, down from 18.9 million in September and about three-quarters of their pre-war level. The United Arab Emirates is considering a third export pipeline that would bypass Hormuz.

Not every indicator points down. US crude inventories fell by 865,000 barrels to 409.8 million in the week ended October 30, where analysts had expected a rise of 877,000. Gasoline and distillate stocks also fell, and oil demand reached its highest level in a year. Wells Fargo noted that US diesel stockpiles are the lowest since 2003 and that the war still constrains supply.

Energy shares took the hit on Wednesday. The Energy Select Sector SPDR Fund fell more than 5%, and refiners Marathon Petroleum and Valero dropped 8% to 10%. Gasoline futures were on track for their lowest close since March 10. After the last election that handed Democrats the House, in 2018, crude fell about 18%.

Mukesh Sahdev, CEO of XAnalysts, cautioned that the new Congress does not take office until January and that commercial oil inventories in major consuming countries are near their lowest in 15 years.