Brent crude slips below USD 94 as oil prices plunge nearly 9 percent after US election results fuel hopes of ending the Iran war. |
Mumbai: Global crude oil prices witnessed a sharp decline of nearly 9 percent on Wednesday as the Democrats’ victory in the US midterm elections raised hopes of an early end to the ongoing Iran war. Brent crude slipped below USD 94 per barrel on Thursday, extending the previous session’s losses.
Oil Prices Tumble
US benchmark West Texas Intermediate (WTI) crude plunged 8.3 percent to settle at USD 88.12 per barrel on Wednesday. International benchmark Brent crude dropped 8.7 percent to USD 94.62 per barrel.
Selling pressure continued on Thursday, pushing Brent below the USD 94 mark as investors reassessed geopolitical risks and potential disruptions to global oil supplies.
US Elections Impact
US Vice President JD Vance reportedly linked the Republican Party’s electoral defeat partly to the ongoing conflict in West Asia.
His remarks strengthened market expectations that growing political pressure could encourage the Trump administration to seek an early resolution to the Iran war.
A possible ceasefire could ease concerns over oil supply disruptions and reduce the geopolitical risk premium built into crude prices.
Uncertainty Remains
However, analysts caution that an immediate end to the conflict is far from certain.
Military tensions in West Asia remain elevated, while President Donald Trump could seek more favourable terms before agreeing to end hostilities.
Consequently, crude oil prices may continue witnessing sharp fluctuations in the coming sessions.
India Could Benefit
Falling crude prices could provide significant relief to India, which imports most of its petroleum requirements.
Lower international oil prices could reduce the country’s import bill, conserve foreign exchange and ease pressure on the current account deficit.
Inflation Relief
Cheaper crude could also help moderate inflation by reducing fuel, transportation and logistics costs.
Aviation, paints, chemicals, tyres and oil marketing companies could benefit from lower input expenses.
However, any reduction in domestic petrol and diesel prices would depend on government taxation, refining costs and pricing decisions.
Sustained declines in crude prices could also improve the inflation outlook, potentially giving the Reserve Bank of India greater flexibility to support economic growth.
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