Oil Prices Retreat After Trump Rules Out Iran Strikes Before US Midterm Elections

Oil prices fell sharply on Friday after President Donald Trump indicated that the United States would not carry out military strikes against Iran before the November midterm elections, easing fears of a broader conflict that could disrupt global energy supplies. Brent crude futures declined 1.3% to $102.91 per barrel, while US West Texas Intermediate fell 1.2% to $90.40, with WTI touching $90.70 in early Asian trading. The retreat came after crude had surged the prior session, contributing to a broadly weaker Wall Street close on Thursday.

The pullback in oil rippled across global markets. Asian shares were mixed but steadied as geopolitical risk appetite improved, European equities moved higher with the FTSE 100 rising 0.8%, and European natural gas prices eased off two-week highs. US Treasury yields held steady as Trump struck a more diplomatic tone on Iran.

Despite the relief rally, traders continued to weigh persistent shipping risks in the Persian Gulf, ongoing Hormuz attacks, and production disruptions in the Gulf of Mexico against Trump's pre-midterm pledge. A US military source told broadcaster Al-Hadath that American forces maintain 50,000 soldiers on permanent standby, with options on Iran remaining open, underscoring that the pause in military action is being read as tactical rather than a full de-escalation. The S&P 500 had closed down 0.47% on Thursday, the Nasdaq 100 fell 1.39%, and the Dow Jones edged up 0.10%, with chipmaker weakness compounding the drag from soaring crude prices during the prior session.