Oil and European natural gas prices fell sharply after Democrats made major gains in the US midterm elections, raising hopes that Washington could seek an end to the conflict with Iran.
Brent crude dropped nearly 9% during Wednesday’s trading session, settling at $94.62 (€83.94) per barrel. Prices fell further on Thursday, with Brent trading near $94 (€83.43) as markets assessed the political and diplomatic outlook.
European natural gas futures also declined. The Dutch Title Transfer Facility (TTF), the continent’s benchmark contract, traded near $95.77 (€85) per megawatt-hour on Thursday.
Why the US election results affected energy markets
Investors are weighing whether the election results could increase pressure on President Donald Trump to pursue a negotiated end to the conflict with Iran.
Democratic gains in Congress could make it harder for the administration to sustain its current military strategy. The possibility of a diplomatic breakthrough has therefore reduced some of the risk premium that had pushed energy prices higher.
Oil prices retreat as traders assess supply risks
Brent crude, the international oil benchmark, fell to its lowest level in more than two months during Wednesday’s session. US West Texas Intermediate crude also declined sharply. The latest drop extended a broader retreat in oil prices during the week. Traders have responded to hopes of de-escalation, while developments affecting crude exports from the Persian Gulf have also influenced market expectations.
A successful agreement between Washington and Tehran could ease pressure on energy markets. Renewed hostilities or supply disruptions, however, could trigger another price increase.
European natural gas prices also decline
European gas futures fell below $95.77 (€85) per megawatt-hour on Thursday, extending their weekly losses. The decline reflects improving hopes for diplomacy and a reduced risk of further escalation in the Middle East. Qatar has continued efforts to mediate between Washington and Tehran.
Nevertheless, Europe’s gas market remains exposed to supply risks. Disruptions to liquefied natural gas shipments from the Persian Gulf could limit the impact of falling benchmark prices.
The latest movements offer some relief to energy markets, but they do not yet signal a lasting reduction in costs for households and businesses. Wholesale prices can change quickly, and their effects on consumer bills depend on contracts, taxes, distribution costs, and national pricing arrangements.
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