Oil prices retreat ahead of U.S. midterms despite renewed Strait of Hormuz attacks
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Oil prices declined ahead of Tuesday’s U.S. midterm elections as investors weighed renewed attacks on commercial vessels near the Strait of Hormuz against prospects for a diplomatic resolution to the conflict with Iran.
Brent crude (CO1:COM) fell below $112 a barrel after gaining more than 2% Friday, while West Texas Intermediate (CL1:COM) traded near $102. Secretary of State Marco Rubio said Washington hasn't decided whether to launch additional strikes against Iran, emphasizing President Donald Trump's preference for diplomacy.
For investors, the competing signals highlight the geopolitical risk premium embedded in crude prices. Further military escalation could disrupt shipments through Hormuz, a critical route for global energy supplies, potentially driving oil prices higher and adding to inflationary pressures.
Iran's Supreme Leader Mojtaba Khamenei reportedly instructed military commanders to prepare for renewed hostilities with the U.S. and Israel, even as Iranian officials indicated progress in negotiations. Maritime authorities reported a vessel struck by a projectile Sunday, following an attack Friday on a liquefied natural gas tanker.
Meanwhile, OPEC+ agreed to maintain its production quotas for December after completing the reversal of voluntary output cuts in September. The decision comes as continuing Middle East hostilities threaten regional energy infrastructure and exports.
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