Oil Price Today (November 5): Crude oil falls below $94 after 9% plunge on Wednesday after midterm results. More downside ahead?

Crude oil prices extended their decline on Thursday, following a sharp 9% slump in the previous session, as markets assessed the implications of the Democrats' sweeping victory over Republicans in the US midterm elections.

The political setback raised expectations that mounting pressure on the Republican Party could push the Trump administration toward ending the war with Iran through a negotiated settlement.

In a lengthy post following the election defeat, Vice President JD Vance acknowledged that voter dissatisfaction over the war and the US-Israel relationship had contributed to the Republicans' poor performance. Senate Minority Leader Chuck Schumer, a Democrat, also pledged to bring the war to an end soon.


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Crude oil prices on November 5

Brent crude was trading at $93.51 a barrel, down more than 1%, or $1.05 in absolute terms. US West Texas Intermediate (WTI) crude slipped 1.35% to below $87 a barrel. In the previous session, Brent futures settled $8.98, or 8.7%, lower at $94.62 a barrel, while WTI crude futures dropped $7.97, or 8.3%, to $88.12. Both benchmarks ended Wednesday at their lowest levels since August 31.

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US President Donald Trump now faces a choice between pursuing a negotiated exit from the conflict and risking further escalation. With Democrats gaining control of both the House of Representatives and the Senate, a weakened Trump administration could face greater constraints on its military options, increasing the incentive to reach an agreement, Reuters reported, citing two sources close to Gulf government circles. The sources said a full-scale assault on Iran appeared less likely.

However, Gulf analysts cautioned that a settlement allowing Iran to claim a clear victory while leaving Trump politically weakened could trigger further recklessness rather than bring restraint.

Trump told the Financial Times on Tuesday that the United States had no immediate plans to strike Iran. On Wednesday, he also acknowledged that the war had contributed to his party's sweeping defeat in the midterm elections, with Democrats securing control of both chambers of Congress.

Meanwhile, Iran's Supreme Leader Ayatollah Mojtaba Khamenei said in a written statement that US hostility towards Iran would continue irrespective of which political party held power in Washington. Yemen's Houthis also claimed to have targeted King Khalid International Airport in Riyadh, although Saudi authorities did not confirm the attack.

Qatar has intensified its mediation efforts to prevent another escalation in attacks following the US elections. However, a senior Iranian official told Reuters on Tuesday that Tehran and Washington remained far from reaching an agreement to end the war.

Separately, the United Arab Emirates is considering constructing a third oil pipeline to transport crude outside the Strait of Hormuz, Bloomberg reported, citing people familiar with the matter. The proposed pipeline is part of the country's efforts to significantly reduce its dependence on the strategic waterway.

Where are crude oil prices headed?

Goldman Sachs has raised its oil price forecasts, citing growing risks to global supplies. The investment bank warned that Brent crude could surge to $140 a barrel in 2027 if oil production across the Gulf region remains substantially below its 2025 average.

The bank increased its December Brent crude forecast to $105 a barrel from its earlier estimate of $90. Its price projection for US WTI crude was also revised upwards to $94 a barrel from $81.

Under an upside scenario, Brent crude could touch $140 a barrel and average around $130 in 2027 if Gulf oil production remains 3.5 million barrels per day below its 2025 average, Reuters reported, citing Goldman Sachs' projections.

Goldman Sachs expects the market to factor in a higher geopolitical risk premium, reflecting the possibility of disruptions to Middle Eastern oil supplies, the historical duration of major supply shocks and concerns that securing a lasting diplomatic breakthrough could prove difficult.

Meanwhile, uncertainty over the direction of the conflict continues to complicate the outlook for oil prices. JPMorgan analysts said assessing how the war would develop remained challenging. At the outset of the conflict, the bank had expected the US administration to avoid crossing certain economic thresholds. However, seven months into the war, several of those limits had been breached, with no clear strategy in place to bring the conflict to an end.

Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here