Oil prices have fallen sharply in international markets, falling below $90 per barrel, at a time when investors are assessing the possibility of an end to the war with Iran.
The drop in prices comes after the victory of the Democrats in the mid-term elections in the United States of America, a result that could increase the pressure on President Donald Trump to end the conflict.
US crude oil, known as West Texas Intermediate (WTI), closed on Wednesday at $88.12 a barrel, recording a drop of more than 8% in a day. Compared to Friday's close, the price is down about $16.
The three-day drop, of roughly 15%, was the biggest since November 2021. Meanwhile, Brent crude, which serves as a benchmark for the international market, fell near a two-month low.
According to Wells Fargo Investment Institute analysts, the outcome of the election could put pressure on Trump to seek an early end to the war.
Although diplomatic signals remain unclear, markets are reacting to expectations of a reduction in tensions in the conflict with Iran. Mark Hackett, chief markets strategist at Nationwide, said prices were falling on hopes of a more limited escalation of the conflict.
The decline has not been limited to crude oil. Gasoline futures are nearing their lowest close since March 10, while the Energy Select Sector SPDR fund has lost more than 5%. Oil refining companies, Marathon Petroleum and Valero, have also recorded significant declines in stock value.
However, despite the decline of the last few days, the price of oil remains significantly higher than at the beginning of the year. WTI crude started 2026 at around $57 a barrel, and on April 7 it peaked at around $113. Thus, the current price continues to be about 50% higher than at the beginning of the year.
The markets are closely following the political developments in Washington, as the outcome of the elections may affect the attitude of the US administration towards the conflict with Iran.
Meanwhile, fuel supplies continue to remain tight, with US diesel stockpiles falling to their lowest level since 2003.
In this situation, the recent drop in prices mainly reflects the markets' expectations for reaching an agreement and reducing tensions, although so far such a development has not materialized.
