Oil prices plunged about 9 percent on Wednesday, November 4, in volatile trading, as investors bet that US President Donald Trump's midterm election defeat — and his own signals that he has no immediate plans to strike Iran again — could push Washington toward ending its war with Iran. Brent crude futures dropped $9.27, or 8.9 percent, to $94.29 a barrel by 4:58 pm GMT, touching the lowest level since September 4, Reuters reported from Houston. US West Texas Intermediate (WTI) futures fell $7.44, or 7.8 percent, to $88.54 a barrel.

Source: Reuters via Business Day

The sell-off deepened through the New York session. OilPrice.com, using a 1:06 pm Eastern snapshot, put Brent down $8.94, or 8.6 percent, at $94.66 a barrel and WTI down $8.01, or 8.3 percent, at $88.08 — a dramatic reversal for a benchmark that traded near $118 a barrel as recently as Friday. Brokerage XTB described it as oil's sharpest fall since April, and the Associated Press reported Brent down 9.2 percent to $94.11, below $100 for the first time in nearly a month.

Source: OilPrice.com

Why the market sold off: Trump, Vance and a Democratic Congress

The trigger was politics. Democrats won control of both the US House of Representatives and the Senate in Tuesday's midterm elections. Trump acknowledged to Fox News that the Iran war played a role in his party's sweeping defeat, telling the channel, in OilPrice.com's account of the interview, “I think it's the gasoline price.” He had already told the Financial Times on Tuesday that the United States had no immediate plans to strike Iran, while adding that American forces were “locked and loaded” if needed. Vice-President JD Vance wrote on X that the war was the reason Republicans lost, and that “any honest conversation about where we go from here must start there.”

Source: OilPrice.com

“Larger crude oil exports out of the Middle East, along with President Trump stating he has no immediate plans to strike Iran, are keeping the pressure on crude oil prices for now. The Democratic control of Congress could also tighten US military spending in the Middle East and further heighten the possibility of a peace deal sooner than later,” Dennis Kissler, senior vice-president of trading at BOK Financial, told Reuters.

Source: Reuters via Business Day

Not every trader is convinced the war is ending. “The elections are giving bears a reason to cast doubt on a continuation in Iran... I'm more concerned that we can see an escalation in Iran sooner than a resolution,” Carl Larry, who leads the trading and North America risk team at Enverus, told Reuters. A Qatari outlet, Al-Jadeed, again reported significant progress in US–Iran negotiations — a claim OilPrice.com noted was similar to reports a senior Iranian official had swiftly dismissed a day earlier, so it is reported here as an unverified claim, not a development.

Inventories fell — and prices still crashed

The plunge overrode bullish supply data. The US Energy Information Administration (EIA) said crude inventories fell by 865,000 barrels to 409.8 million barrels in the week ended October 30, against analysts' expectations in a Reuters poll for an 877,000-barrel rise; gasoline and distillate stocks also fell. OilPrice.com, citing the EIA figures, said crude stocks sat 4 percent below the five-year average and distillate stocks dropped 3.6 million barrels to 13 percent below the five-year average. (Yaani: US oil godowns actually emptied a little this week — the crash was driven by war politics, not by extra supply sitting in tanks.)

Source: Reuters via Business Day

On physical flows, ship-tracking firm Vortexa put Gulf exports of crude, condensate and refined products — excluding liquefied petroleum gas — at an average of 17.1 million barrels per day in October, down from 18.9 million barrels per day in September but still roughly three-quarters of pre-war levels. Separately, Bloomberg reported, via Reuters, that the United Arab Emirates is considering a third oil-export pipeline that would deliver crude outside the Strait of Hormuz, as Abu Dhabi seeks to sharply reduce its dependence on the waterway.

Background: the war since February 28, Hormuz and the midterm timeline

The United States and Israel launched their war on Iran on February 28, and the conflict is now in its ninth month. Iran took de facto control of the Strait of Hormuz — through which about one-fifth of the world's oil and liquefied natural gas normally passes — and a US blockade of Iranian ports followed. US forces struck Iranian missile positions on Qeshm Island, at the mouth of the strait, on Monday, November 2, in what a US official described as defensive action. The war pushed gasoline and diesel prices sharply higher in the United States, and that cost at the pump became a central issue in the midterms. The new Democratic Congress does not take office until January, which analysts note leaves a window in which the administration can still act on Iran — in either direction — before the new lawmakers are sworn in.

What it means for Gulf workers, India and truckers

For the lakhs of Punjabi and Indian workers in the Gulf, a sustained fall in oil prices cuts both ways: cheaper fuel and a softer import bill ease pressure on families back home in Punjab and across India — India imports the great bulk of its crude — while a long period of low prices can squeeze Gulf government spending and, eventually, construction and transport jobs. In North America, diesel has been at record highs above $6.50 a gallon, a direct cost for Punjabi truck drivers in Canada and the US. The US Energy Department said it would loan 300,000 barrels from the Northeast Home Heating Oil Reserve to four companies — nearly a third of that stockpile — after pressure from senators of both parties, and heating-oil futures fell about 7 percent, OilPrice.com reported.

What happens next

Qatar has stepped up mediation to avert a fresh escalation after the elections, but a senior Iranian official told Reuters on Tuesday that Iran and the United States remain far from a deal to end the war. Iran's Supreme Leader, Ayatollah Mojtaba Khamenei, said in a written statement that US hostility would persist regardless of which party holds power in Washington. The market's bet, in other words, is a hope, not an agreement: if talks stall or a new strike lands, the same traders who sold Brent down to $94 can push it back up just as fast. Watch for any confirmed US or Iranian negotiating move, any change in Hormuz shipping, and whether Brent holds below $100 when Asian markets open.

Iran's Supreme Leader has already answered the midterm result in a written statement saying US hostility will not change, whichever party runs Congress. Read: Khamenei says US hostility will not shift after midterms