Oil prices fall as Trump signals no Iran attack before US midterm elections

Oil prices fell on Friday after US President Donald Trump ruled out an attack on Iran before the November 3 midterm elections, easing some concerns over supply disruptions even as Brent crude remained on track for a weekly gain.

Brent crude futures fell 72 cents, or 0.7 per cent, to $103.53 a barrel by 0220 GMT. US West Texas Intermediate (WTI) crude futures declined 52 cents, or 0.6 per cent, to $90.97 a barrel.

Despite the decline, Brent was set to record a weekly gain after settling 4 per cent higher on Thursday, following increased attacks earlier in the week on shipping carrying crude out of the Middle East. WTI, meanwhile, was on course for a slight weekly decline.

Trump said on Thursday that Washington was holding “productive discussions” with Iran and that no attack was planned before the November 3 US midterm congressional elections. His remarks came after media reports suggested he was considering military action against Tehran before the polls.

The comments eased some concerns in oil markets, which have been volatile this week amid threats to energy shipments through the Gulf and the Strait of Hormuz.

Iran’s Tasnim news agency reported on Thursday that Foreign Minister Abbas Araqchi said Tehran was reviewing Washington’s response to an Iranian proposal to reopen the Strait of Hormuz within seven days.

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The waterway is a critical route for global energy supplies. Before the war, shipments through the Strait of Hormuz accounted for about 20 per cent of global oil and fuel flows. Disruptions to traffic through the passage have heightened concerns over the availability and cost of crude.

However, the prospect of diplomatic progress has not eliminated the risks to supply. The US continues to exert economic pressure on Iran in an effort to end the conflict, which is now in its eighth month.

Washington imposed fresh sanctions on Thursday targeting individuals, networks and 17 vessels involved in transporting Iranian crude oil, petroleum products and petrochemicals.

Hurricane disrupts US oil production

Oil markets are also monitoring Hurricane Isaias in the Gulf of Mexico, where the approaching storm has disrupted production.

US producers had shut in about 1.3 million barrels per day of oil output as of Thursday, equivalent to 62.9 per cent of current production in the affected area, according to the US Marine Minerals Administration.

The combination of diplomatic developments, sanctions and weather-related disruptions has kept crude prices volatile, with traders assessing whether progress in US-Iran talks can ease supply concerns.