On Wednesday, November 4th, energy traders did something out of the ordinary. They saw an election in America as an oil story.
West Texas Intermediate crude ended trading at $88.12 per barrel, falling more than 8% for the session, and 16 dollars off the Friday close of $104. The fall of 15% over three days was its biggest since November 2021.
Brent, the most commonly used oil benchmark in the world, fell by 8.47 percent to end at $94.83 per barrel.
The trigger was the outcome of Tuesday’s election. Democrats took control of both houses of Congress, setting up a scenario of a split government.
To the markets, this looked like a risk to the war. They believed that the Democrats’ win could lead to an early end to the prolonged Iran conflict which has disturbed energy markets worldwide.
This strategy was characterized as a bet for peace. “Oil prices are lower based on expectations for de-escalation in the Iran conflict,” says Mark Hackett from Nationwide.
Politics played its part as well. Prices went down further still when Vice President JD Vance openly blamed Republican defeats on the foreign war.
It was also clear to investors that Senate Minority Leader Chuck Schumer promised an end to the war, claiming some Republicans will support him. None of those declarations alone represents any shift in US policy, however, as no statements from the president have been issued in that vein.
Oil prices have fluctuated during the course of the day such that the figures presented are quite different. On Wednesday, earlier in the day, Reuters had said that Brent had fallen by 1.44% to $102.11, while WTI had fallen by 0.93% to $95.20.
Later in the day, Brent reached its lowest level of $93.22 per barrel for the session, marking its lowest point in two months. The fall in oil prices has been estimated to be around 10% by Business Standard and 8.47% by The National.
Oil prices have fluctuated during the course of the day such that the figures presented are quite different. On Wednesday, earlier in the day, Reuters had said that Brent had fallen by 1.44% to $102.11, while WTI had fallen by 0.93% to $95.20.
Later in the day, Brent reached its lowest level of $93.22 per barrel for the session, marking its lowest point in two months. The fall in oil prices has been estimated to be around 10% by Business Standard and 8.47% by The National.
The positioning was also relevant. The trend-following commodity trading advisors reduced their long position in Brent crude to 55% from 73%, according to Kpler's Bridgeton Research Group.
Such a move tends to exacerbate an existing fall caused by political factors.
The mood transcended energy. In the best day in 2026 for the index, the Dow soared 1,500 points while US stocks rallied. Energy stocks dropped by more than 5%, and gas futures were set for their lowest close since March 10.
Drivers will certainly be happy about this development, especially given the rise in fuel prices following the outbreak of hostilities.
The decline in prices has not diminished the impact of the war. The price of WTI began the year at around $57 and reached a high of around $113 by April 7th, 2026, and is currently about 50% higher than at the start of the year.
The supply situation is also not back to normal. A report from Yahoo Finance says that the supply was not back to pace with the peace trade. Supplies of US crude oil have been falling despite lower prices.
The upcoming election is reminiscent of past events. The most recent event occurred in 2018 where the Democrats won the House during Trump's first midterm. WTI declined 18.1% from the date of the election to the end of November that year.
This trend does not always occur. WTI increased following both of Trump's 2016 and 2020 elections and even declined 5.5% after the 2024 election.
There were other sources that highlighted the constraints of the story. The elections alone will not affect the US’s military strategy, and its direct impact on the price of crude oil is not easy to identify.
The US president also gave contradictory statements. Trump stated that there were no immediate intentions to bomb Iran again, which prevented the escalation of tensions. This followed the bombing of Qeshm Island by US military units this week.
