Stay informed with free updates
Simply register at Oil myFT Digest – delivered straight to your inbox.
Oil prices fell to their lowest level in two months on Wednesday, as Democrats’ landslide victory in the US midterm elections increased pressure on Donald Trump to end his war in Iran.
Brent crude, the international benchmark, fell 9.3% to $93.95 a barrel after US Vice President JD Vance blamed the conflict for the Republican defeat in Tuesday’s midterm elections.
The price has fallen more than 17 percent since late last week following reports of progress toward a peace deal between Washington and Tehran.
West Texas Intermediate, the U.S. benchmark, was down 8.9 percent on Wednesday at around $87.70 a barrel, leaving it down almost 16 percent this week.
“(The) real reason we lost is obvious to almost everyone,” Vance posted on social media, adding that pollsters found that Republican voters’ top response to the question of why they voted Democratic instead on Tuesday was a demand to “end the war.”
Traders and analysts said the oil price was driven by a surge of optimism about an end to the conflict, which has plunged the global oil market into turmoil and sharply reduced exports of Gulf crude.
“The market is saying that Congress and members of his own administration are likely to start acting as a constraint on President Trump’s war in Iran,” said Seb Barker, chief market strategist at hedge fund firm Marshall Wace.
Donald Trump Jr, the president’s eldest son, showed his support for Vance’s message on X.
CBS reported Wednesday that Trump asked his advisers whether he should fire Defense Secretary Pete Hegseth, a supporter of the Iran war. Chuck Schumer, the Democratic leader in the Senate, said his new majority would work with Republicans to end the war.
The fall in oil prices has triggered a strong rally in government bond markets, which have been hit hard by energy-related inflation in recent months.
Ten-year government bond yields fell 0.13 percentage points, the biggest daily decline since May, to 5.16 percent. Yields on French debt of the same maturity fell 0.16 points to 4.78 percent. Yields fall as prices rise.
Claudio Galimberti, chief economist at Rystad Energy, a research group, said the election results would make continuing the war more costly for the Trump administration.
“A Democratic victory changes the political cost of continuing the war in Iran. The White House retains its discretionary powers over strikes, blockades and sanction authorizations. What changes, however, is the price of using them,” he said.
“With both houses (of Congress) now able to pass resolutions, withhold war funding and delay confirmations, the administration faces a shorter political path and greater institutional pressure to reach a (peace) agreement,” he added.
Joel Hancock, senior commodities analyst at Natixis bank, said Trump had suggested he was moving away from previous suggestions that he might resume strikes against Iran after the election.
“All of Trump’s recent statements on Iran have been quite conciliatory, or at least not showing any urgency for attack. This really contradicts the narrative that we are about to see an imminent resumption of war,” he said.
In the absence of a peace deal, he added, Brent could return above $100 a barrel due to high logistics costs and continued difficulties in moving crude out of the Gulf.
Additional reporting by Kate Duguid in New York
Gn bussni
