Oil prices fell Friday after surging the previous day, as traders weighed President Trump's pledge not to attack Iran before the U.S. midterm elections against persistent shipping risks in the Persian Gulf and extensive offshore production shut-ins in the Gulf of Mexico. Trump stated Thursday that the U.S. would not attack Iran prior to the November 3 midterm elections, pointing to what he described as productive discussions with Tehran.
December Brent crude futures decreased by 1.3% to settle at $102.90 a barrel, while December West Texas Intermediate futures fell 1.4% to $89.50 a barrel. Both benchmarks had surged 4.4% on Thursday, with Brent climbing as high as $105.23 a barrel and WTI reaching $92.70 earlier in the session before trimming those gains. Despite the pullback, a U.S. naval blockade involving roughly a dozen Navy ships remains active in the region.
Market analysts note that oil prices are likely to stay elevated in the short term despite the downward correction, driven by ongoing threats to Middle East shipping lanes and continuing disruptions to U.S. offshore output. Regional tensions also remained elevated, with Iran and allied Houthi forces in Yemen executing a series of attacks targeting shipping in the Persian Gulf and Saudi Arabia.
Concurrently, the U.S. Treasury Department stepped up economic pressure on Tehran by sanctioning 17 vessels identified as part of Iran's shadow fleet that allegedly transported millions of barrels of crude and petroleum products to Asian markets.
At the same time, Hurricane Isaias severely impacted output in the Gulf of Mexico. Officials reported that 1.28 million barrels per day, representing 62.9% of total offshore production, had been shut in by Thursday morning, accompanied by personnel evacuations across numerous platforms and rigs.
While the threat to regional refineries narrowed with fewer than 500,000 barrels per day of capacity at immediate risk, port closures and shipping delays continued to impact refined-product exports, highlighting the complex interplay of geopolitical and weather-related supply factors.