Oil falls below $100 for first time since October as Iran diplomacy hopes grow

Oil prices cracked a psychologically significant threshold on Wednesday, with European Brent crude falling below $100 per barrel for the first time since October 7 — a nearly $8 drop, or 8.3%, in a single session, the biggest daily decline since April. U.S. West Texas Intermediate fell by the same percentage, closing at around $88.12. By Thursday morning, Brent had slid further, to $93.63, as markets continued to price in the possibility of a diplomatic off-ramp to the U.S.-Iran war.

The catalyst was political. Democrats swept Congress in Tuesday's midterm elections, and traders quickly bet that the results would pressure President Donald Trump toward ending the Iran war — which began February 28 when Trump and Israeli Prime Minister Benjamin Netanyahu launched it — without a major escalation. Trump's own statement that the U.S. has no immediate plans to strike Iran, along with reports of Qatar stepping up mediation efforts, reinforced that read, according to Gulf News.

The scale of the reversal is striking. On Friday, Brent traded as high as $118 per barrel. By Thursday it had fallen to roughly $93 — a drop of more than a fifth in under a week. Despite that plunge, oil remains about 60% higher than at the start of the year, according to NBC News.

The next six weeks typically deliver one of the most hostile environments for higher gasoline and diesel prices. If the US or Iran don't pursue 'scorched earth' policies in the Persian Gulf, we may see considerably lower prices by second half December.— Tom Kloza, Chief Energy Adviser, Gulf Oil

For American consumers, the practical question is what happens at the pump. The national average price of gasoline stood at $4.12 on Wednesday morning — 39% higher than before the Iran war began, according to NBC News. Patrick De Haan, an analyst at GasBuddy, said oil's fall could bring that average below $4 in the 'days ahead.' U.S. diesel futures also tumbled Wednesday, falling nearly 7% to their lowest level since late August, a move that could ripple through grocery and goods prices given diesel's role in powering the country's freight network.

The political fallout from those prices was on full display Tuesday night. Exit polls conducted by NBC News found that 59% of voters said they were 'very concerned' about the cost of gas and diesel. Trump himself acknowledged the connection on Fox News as the first results came in.

I think it's the gasoline price. People agree with what I'm doing on Iran, but they really probably weren't willing to do the short-term consequence of paying more for gasoline, and that, you know, I understand that.— President Donald Trump

Vice President JD Vance went further, directly blaming the Iran war for the Republican Party's steep midterm losses on social media, adding: 'And any honest conversation about where we go from here must start there.' Vance is seen as a potential GOP standard-bearer for the 2028 presidential election, according to NBC News.

The war disrupted shipping traffic in the Strait of Hormuz, the narrow waterway through which a significant share of the world's oil passes, sending gasoline and diesel prices skyrocketing and worsening already stubborn inflation for consumers, farmers, and business owners. The physical constraint has not disappeared: Gulf News noted that Murban physical crude carried roughly a $7 premium over Brent futures on Thursday, suggesting real Gulf barrels remain tighter than the paper market implies.

Caution is warranted on the diplomatic front. Iranian officials said the two sides remain far from an agreement, and U.S. officials told Axios the military is still finishing preparations for possible major combat operations, according to Gulf News. The Hormuz disruption remains a live physical constraint, and prices — even below $100 — are still well above pre-February levels.

U.S. commercial crude stocks, excluding the Strategic Petroleum Reserve, stood at 409.8 million barrels as of the latest EIA report, down 0.9 million barrels week-over-week, according to World Oil Monitor. The U.S. oil and gas rig count held unchanged at 603 for the week of October 30.

Why it matters — A sustained drop in oil prices would directly lower gasoline and diesel costs for American consumers and businesses, potentially easing inflation — but only if U.S.-Iran diplomacy holds and Hormuz shipping disruptions ease.

Reported by nbcnews.com, gulfnews.com, worldoilmonitor.com, moneycontrol.com