Brent crude slips from intraday high as Trump rules out Iran strikes before midterms

Brent Crude prices slipped nearly $2 from their intraday high of $105.91 Thursday immediately after President Donald Trump said United States will not attack Iran before the November 3rd midterm elections.

"We will not be attacking Iran at any time prior to the Midterm Elections to be held in the United States on November 3rd," he wrote at 12:17 p.m. Eastern time on Truth Social, his own social media site. Crude prices then fell abruptly to $103.65, and were trading close to that figure as of 4:30 pm Eastern Time, up 3.37% for the day at press time.

Trump also said the blockade of Iranian ports would stay "in full force and effect."

A strike before the election had still been possible on Wednesday. The Pentagon had told Central Command, which runs American forces in the Middle East, to finish preparations for a return to major offensive strikes on Iran. Thursday's post did not cancel those preparations.

Oil was already higher because a strike was still possible, tankers were under attack, and a hurricane was closing wells in the Gulf of Mexico.

West Texas Intermediate, the US price, was at $91.45, up 3.6%.

The United States Oil Fund BUSO, “which holds a mix of near-term WTI futures contracts at several maturities, rather than barrels of oil, was up 3.37% for the day, at. $103.77.

The fund's largest position is the December contract, not the nearer-term November contract underlying the US WTI price, so the fund rose slightly less than WTL for the day.

The Strait is still closed

Nine tankers were attacked in the past week in and around the Strait of Hormuz, the narrow waterway tankers use to leave the Gulf. Iran-backed Houthi forces in Yemen fired missiles at airports in Saudi Arabia, including Riyadh, and Saudi forces said they intercepted another round of Iranian missiles on Thursday.

Meanwhile, Hurricane Isaias was forcing a shutdown of nearly two-thirds of Gulf of Mexico oil production, according to U.S. offshore regulators, contributing to upward pressure on global oil prices.

.Iran maintains the Strait is still closed. However, tankers are still moving through under American escort albeit much more slowly than before the war.

On Sunday, October 4, Mohammad Bagher Ghalibaf, the speaker of Iran's parliament, said the Strait "will not be opened" until Tehran's conditions are met. Tankers are still moving through it under American escort, more slowly than before the war.

Trump said 22 million barrels passed through the night before, called that a record, and said none of it came from Iran or went there. That number is his claim, for a single night. Kpler, a firm that tracks ships, put the flow for the week ended Tuesday at about 9.5 million barrels a day, roughly 37% below the approximately 15 million barrels a day that Kpler estimates transited the Strait before the war.

Counting pipelines that go around the strait, Middle East oil flows were 16.4 million barrels a day, nearly at the level before the war.

Ryan McKay, a commodity strategist at TD Securities, said a risk premium is likely to stay in the price. Ships still need escorts, the voyage costs more, and another attack is possible.

No agreement yet

Iran has offered to reopen the strait within seven days if the United States lifts the blockade, eases the limits on Iranian oil exports, and takes steps toward a ceasefire. Trump rejected that plan late last month.

Washington then sent its own proposal, through Qatar, asking for nuclear concessions. That is the reply Foreign Minister Abbas Araghchi said Thursday that Iran was still reviewing.

"The diplomatic process is still continuing," he said.

Trump called the discussions "productive." As of late last month, Qatari mediators had seen little progress, and the main differences had not narrowed. On Thursday they were still waiting for Iran's answer.

Trump's post did not say Iran's conditions had been met. The same day, the Treasury Department sanctioned 17 more ships it says move Iranian oil and gas.

Israel votes on October 27, a date that now sits inside the window Trump closed for an American strike. A report citing US officials said Eyal Zamir, Israel's military chief, had told American generals that a strike on Iran in the coming weeks could postpone that election.

An Israeli official, speaking Wednesday about a possible American return to strikes, said, "After the midterms the chances of it happening increase significantly."

Araghchi said Iran's answer could come within days. Trump has not said what he will do after November 3.