Oil Prices Today, November 5, 2026: Brent Falls 0.7% To $93.9, WTI Slips Below $88 As Iran War Resolution Hopes Weigh On Prices

Mumbai, November 5: Crude oil prices extended their decline for a fourth consecutive session on Thursday, November 5, as investors weighed the possibility of a diplomatic resolution to the US-Israeli war on Iran following the Democrats’ sweeping victory in the US midterm elections. Brent crude futures were trading 0.7% lower at $93.9 per barrel, while US West Texas Intermediate (WTI) crude futures fell 1.18% to $87 per barrel in early trade. 

The latest decline follows a massive sell-off in the previous session, when both international benchmarks plunged more than 8% to their lowest settlement levels in over two months. Brent crude futures settled $8.98, or 8.7%, lower at $94.62 per barrel on Wednesday, while WTI dropped $7.97, or 8.3%, to close at $88.12 per barrel. Both benchmarks have now surrendered a substantial portion of the geopolitical risk premium accumulated during the conflict, with Brent on course for its steepest weekly decline in more than six years. 

Why Are Crude Oil Prices Falling? 

The sell-off has been driven primarily by expectations that the Republican Party’s loss of control of Congress could constrain US President Donald Trump’s military options and increase pressure on his administration to negotiate an end to the conflict with Iran. 

Democrats secured control of both the Senate and the House of Representatives in the midterm elections, dealing a major political setback to Trump. Investors believe the changed balance of power in Washington could make further military escalation more difficult and encourage diplomatic efforts to resolve the conflict. 

Trump has acknowledged that the war contributed to his party’s electoral defeat. Meanwhile, Qatar has stepped up mediation efforts to prevent a renewed escalation of attacks and encourage negotiations between Washington and Tehran. 

However, the prospects of a quick resolution remain uncertain. A senior Iranian official told Reuters that the United States and Iran remain far from an agreement to end the war. Iran’s Supreme Leader Ayatollah Mojtaba Khamenei has also indicated that US hostility towards the country would persist irrespective of which political party controls Congress. 

Market participants are therefore balancing the possibility of a diplomatic breakthrough against the risk of renewed military action and further disruption to energy supplies from the Middle East. 

Middle East Supply Outlook 

Beyond the political developments in Washington, improving crude supply flows through the Middle East have also contributed to the bearish outlook. Shipments through the Strait of Hormuz, a critical transit route for global oil supplies, have recovered to levels close to those seen before the war, although transportation costs remain elevated. 

The restoration of Gulf supplies has pushed the global oil market back into surplus after months of disruption. JPMorgan estimated that the market recorded a surplus of 1.1 million barrels per day in September, which widened to 1.4 million barrels per day in October, approaching last year’s average surplus of 1.3 million barrels per day. 

However, the recovery in supplies does not eliminate the risk of further disruptions. Gulf exports of crude, condensate and refined products remained below pre-war levels in October, while the security situation around key shipping routes continues to be a concern. Any renewed military escalation could quickly reverse the improvement in supply conditions. 

US Crude Inventories Offer Some Support 

Adding a counterweight to the bearish sentiment, US crude, gasoline and distillate inventories all declined in the week ended October 30, according to data from the Energy Information Administration (EIA). The drawdown came as US fuel demand climbed to its highest level in a year, indicating that underlying consumption remains relatively strong. 

Nevertheless, analysts have cautioned that the latest correction in oil prices may not necessarily mark the beginning of a sustained downward trend. Commercial oil inventories across major consuming economies are close to their lowest levels in 15 years, leaving the market vulnerable to supply shocks. The incoming Democratic-controlled Congress will also not assume office until January, meaning the immediate balance of political and military powers in Washington remains unchanged. 

What Does The Oil Price Fall Mean For India? 

The decline in international crude benchmarks is significant for India, which imports the bulk of its oil requirements. A sustained reduction in prices could lower the country’s crude import bill, ease pressure on the current account deficit and provide some relief to the rupee. It could also moderate imported inflation and improve the cost outlook for oil-dependent industries. 

Sectors such as aviation, paints, chemicals, tyres and logistics could benefit from lower energy and transportation costs, while oil marketing companies may see an improvement in marketing margins, depending on domestic retail pricing and refining spreads. Lower crude prices could also give policymakers greater room to manage inflationary pressures. 

However, the extent of the benefit will depend on whether the decline is sustained and how much of the international price movement is passed through to domestic fuel consumers. For now, traders are likely to remain focused on developments in the Iran conflict, the restoration of Middle Eastern oil supplies and further signals from Washington. 

Source

• Oilprice.com