Oil Prices Fall Over 2% Weekly Amid Easing Iran Conflict Fears
Oil markets showed a mixed picture on Friday. Brent crude futures for January delivery rose 0.3% to close at $96.13 a barrel, while U.S. West Texas Intermediate (WTI) futures for December delivery increased 0.2% to $88.92 a barrel. Despite the daily gains, both benchmarks recorded weekly declines, with Brent down 2.2% and WTI down 2.1%, marking Brent’s worst weekly performance since late April 2020. Year‑to‑date, Brent remains approximately 60% higher.
Supply‑side developments indicated a gradual normalization of Middle‑East oil flows. Across October, crude and clean‑product shipments through the Strait of Hormuz averaged about 12 million barrels per day (MBD), complemented by just under 6 MBD via the Fujairah‑Red Sea route. For the week ending 5 November, Hormuz outflows strengthened to roughly 13 MBD. Saudi Arabia reported October crude production of 10.6 MBD, exceeding pre‑war (November 2025‑January 2026) levels and reflecting a recovery from September’s East‑West pipeline disruptions.
Political commentary noted that President Donald Trump declared the United States no longer required a diplomatic agreement with Iran, directing Vice President J.D. Vance to focus on domestic priorities. Analysts interpreted the statement as an indication that the U.S. will continue a naval blockade of Iranian ports and maintain broader economic sanctions rather than resume fresh strikes.
Security incidents in the region remained elevated. Risk consultancy Verisk Maplecroft recorded 36 confirmed attacks on commercial vessels in the Persian Gulf, Strait of Hormuz and Gulf of Oman during October—the highest monthly tally since the conflict began. Iran’s top security official reiterated a hard‑line stance on nuclear negotiations, ruling out the removal of enriched nuclear material.
On the broader market, the International Energy Agency (IEA) observed that global oil supplies have surpassed demand for the first time since the war’s outbreak in late February, suggesting tentative signs of rebalancing. Gulf crude exports have recovered to roughly three‑quarters of pre‑war volumes. OPEC reported that total crude production rose by 1.96 million barrels per day to 27.16 million bpd in October, approaching the pre‑war level of 28.63 million bpd recorded in February. Saudi Arabia led the output increase, lifting production to 10.56 million bpd from 8.37 million bpd in September.
Walt Chancellor, energy strategist at Macquarie, emphasized the continued strength of Middle‑East oil flows, particularly through the Strait of Hormuz, and cautioned that while diplomatic prospects remain uncertain, any substantive progress could markedly improve energy market outlooks.