Baghdad /NINA/ – Oil prices are heading toward a sharp weekly decline, driven by expectations of a de-escalation regarding the "Iran conflict"—following electoral losses for U.S. President Donald Trump’s party—as well as a sell-off in stock markets. However, attacks on vessels in the Middle East have prevented an even steeper drop.

During a highly volatile trading session yesterday, Brent crude futures for January delivery rose by 31 cents (0.3%) to $98.60 per barrel, while U.S. West Texas Intermediate (WTI) crude futures increased by 48 cents (0.5%) to $91 per barrel.

Brent crude is on track for a 16% decline this week—its largest weekly drop since the onset of the COVID-19 pandemic and the largest in absolute terms according to London Stock Exchange Group data, which dates back to 1988. U.S. crude is expected to fall by 13% this week.

The decline in oil prices coincides with a sharp drop in the shares of technology companies.

A potential de-escalation in the Iran conflict could lead to an increase in crude oil exports from the region. There are also signs of a potential surplus in crude oil supply amid a collapse in demand—a trend underscored by the return of spot premiums for benchmark Middle Eastern crude grades to pre-conflict levels.

Last Wednesday alone, oil prices fell by 8% following a sweeping victory for the Democrats in the midterm elections, with prices settling at their lowest levels in two months. Prices have risen once again, driven by an escalation in attacks on oil tankers in the Gulf and the Strait of Hormuz—a development that has reignited concerns regarding supply flows from the region.

Data from the United Kingdom Maritime Trade Operations (UKMTO) indicates that attacks on oil tankers continue at a frequency near all-time highs./ End




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