Oil Falls Nearly 9% to Below $90 as Vance Blames Iran War for GOP Midterm Losses

Since the U.S. and Israel launched the Iran war in late February, crude has swung on every signal out of Washington and Tehran. Today, Nov. 4, it swung hard.

West Texas Intermediate futures traded at $87.59 a barrel as of 12:36 p.m. ET, down nearly 9%. Brent futures slid more than 9% to $93.91. Earlier in the session the drop was closer to 7% for WTI (about $89.40) and 8% for Brent (about $95.41), so the selloff deepened through the morning.

Oil futures are now down more than 14% this week. Brent is down by 16% so far this month and on track to finish at two-month lows, according to CNN. In October, fears of a post-election escalation had pushed prices up more than 10%.

What Vance wrote

The selloff accelerated after Vance posted on X following Republican losses in Tuesday's midterms. Democrats took both the House and the Senate.

"The reason we lost is the war," Vance wrote. "The president himself said so last night."

He said many 2024 Trump voters backed Democrats this year and that turnout was not the main problem. He cited a pollster's finding that the top four things that would bring those voters back were ending the war, focusing on cost of living and inflation, putting America first, and changing the U.S. relationship with Israel.

"If you'd like to argue it was worth it, that losing the Senate for the next 6 years was worth it, then do so," Vance wrote.

It was his first public comment since the election.

Trump's position

Trump did acknowledge the war's role. He said it was "largely true" that the conflict contributed to the GOP's losses. He added: "At the same time, if I had it to do again, I'd have to do it again."

He told the Financial Times on Tuesday that he has no immediate plans to strike Iran. He also said he would work with Democrats but use his veto if necessary.

On Oct. 30, Trump told Kansas City radio station KCMO the war would end "very soon, one way or the other," and that gasoline and diesel prices would fall once it did. He tied any end to a guarantee that Iran cannot obtain a nuclear weapon.

He also said Vance's outreach to Iranian officials, which Tasnim reported as a letter to Rezaei, concerned medical supplies getting past the U.S. naval blockade, not revived peace talks. Tasnim reported that Iran's demands for ending the war are unchanged.

Analysts disagree on what the move means

Ben Cahill, a nonresident senior fellow at the Atlantic Council, told Axios the price drop "is entirely about the U.S. election and the belief that Trump will de-escalate rather than escalate on Iran," and that Vance's statement amplified that sentiment. Pavel Molchanov of Raymond James called the post a "key catalyst" for today's plunge, but said it "remains unclear whether Vance's comments signal a more dovish stance toward Iran."

Andy Lipow of Lipow Oil Associates said the market now concludes Trump "might now be inclined to make a deal." He pointed to Trump's announcement this week that the U.S. would cut some funding to Israel, which he said could pressure Israel to accept Washington's decisions. He also said Democrats could try to restrict war funding.

Oil had already been sliding at the start of the week on signs of fresh U.S.-Iran diplomacy, before the election results and the Vance post.

Some market voices are not convinced. Bob McNally, president of Rapidan Energy Group and a former energy adviser to President George W. Bush, said traders are betting the administration will quit the war because the election loss was bigger than expected. "We're not buying it. We think escalation is more likely," he said. He added that Trump "has already paid the political price. In some ways, he's unburdened now."

Rebecca Babin, senior energy trader at CIBC, said the selloff "could be getting a bit overdone."

Iran has vowed to attack energy infrastructure in the Middle East if major combat operations resume. Adm. Brad Cooper, head of U.S. Central Command, said on Oct. 30 that about 50,000 U.S. troops remain in the region, including forces patrolling the Strait of Hormuz.

Politics on the other side of the aisle

House Minority Leader Hakeem Jeffries, poised to become speaker, told CNN that Democrats will seek to end the war as part of their affordability agenda. Rep. Sean Casten, D-Ill., said Vance "is an upwardly aspirational Republican who understands that he needs to differentiate himself from Donald Trump."

What comes next

Fuel prices are the pocketbook link. Kloza, the fuel-price analyst cited by CNN, said national average gasoline could fall below $4 a gallon around Veterans Day next week, with some states dipping below $3.

That forecast depends on crude staying down. Trump's no-regrets stance, his veto threat, and Iran's unchanged demands leave open whether the White House changes course or the market has priced in a pullback that never comes.