Brent ($97) Prices In an Iran Peace Deal That Has Not Been Signed as Tanker Attacks Persist — $90–$110 Range Into OPEC+’s November 29 Meeting

Brent crude fell 1.3% to $97.02 a barrel by 11:06 a.m. ET on Friday. Earlier in the session it had traded at $99.42 after tanker attacks overnight. West Texas Intermediate settled Thursday at $90.52, traded as high as $91.24 early Friday, and then slipped back with Brent. Both benchmarks are heading for their worst week in years. On Monday, Brent was above $110 and WTI was above $100. Measured from that peak, Brent is down between 12% and 16% this week. That would be its steepest weekly decline since the start of the COVID-19 pandemic in 2020.

The move started on Tuesday with the US midterm elections. Democrats won both chambers of Congress, and traders bet that the result would push President Trump toward a deal with Iran to end the war that began on February 28 and reopen the Strait of Hormuz. On Wednesday alone, Brent fell $8.98, or 8.7%, to settle at $94.62, its lowest close since August 31. Since the war began, the strait has carried only a fraction of its pre-war traffic, down from 20% of the world’s oil and LNG.

Our thesis is that this week’s sell-off priced in a peace agreement that does not exist yet. No deal has been signed. Iran has said it will reopen Hormuz only after Washington meets seven demands. At least five vessel incidents have been reported in the Persian Gulf since Sunday. On Friday, Iran’s Revolutionary Guard claimed that two more tankers hit naval mines and caught fire, though nobody has independently confirmed it. In the US, the Energy Information Administration reported an 8.0 million-barrel crude draw for the week to October 30, against expectations for a 890,000-barrel build.

The case for lower prices is also strong, and it is about 2027. Demand destruction this year has been severe. The International Energy Agency’s August report had 2026 demand falling 1.56 million barrels per day to 103.29 million. If Hormuz flows recover, the IEA expects global supply to swing from a 4.3 million-barrel-per-day contraction in 2026 to 8.3 million barrels per day of growth in 2027. That would turn the current shortage into a large surplus. Once a deal is signed, the risk premium built into Brent over eight months would come out quickly.

Our base case through the OPEC+ meeting on November 29 and the Fed decision on December 9 is a Brent range of $90 to $110, with a midpoint of $100. If the US resumes strikes, Brent would retest $110, 13% above the current price. If a deal is signed and Hormuz reopens, Brent would fall toward $85, 12% below. The two outcomes are close to equally likely, and that balance is why oil is this volatile.

The Week: From $110 to $94.62 and Partly Back

The past seven sessions show how violently oil is repricing geopolitical risk. On October 30, Brent traded near $118.70. Over that weekend, Iran’s foreign minister said Tehran’s offer to reopen Hormuz could be carried out within two days if the US accepted its terms. Iran’s Supreme Leader, Mojtaba Khamenei, gave the government authority to speed up talks. On November 2, Trump said a deal “could happen,” and oil fell more than 7% in a single session.

Monday began with Brent above $110 and WTI above $100. WTI opened the week at $102.39 and fell to $96.30 by Tuesday as election-day optimism built. On Election Day, US strikes on Iran’s Qeshm Island briefly lifted prices. Iran’s top security official also cast doubt on the talks, calling the US approach a “court” on any prospective peace deal. Both headlines added volatility without reversing the trend.

Wednesday was the biggest move of the week. Democrats had secured both chambers, and traders read that as a sign the war would end sooner. Brent fell 8.7% to settle at $94.62. In the equity market, consumer discretionary rose 4% as falling crude and falling yields eased pressure on household budgets. WTI dropped to a low of $87.10 on Thursday morning and opened that session at $88.05.

Thursday brought a partial recovery. More tanker attacks in the Gulf and doubts about whether a deal could actually be done lifted Brent 3.88% to settle at $98.29. WTI rose 2.72% to $90.52. Iran’s military said four tankers caught fire while passing through the Strait of Hormuz. Oman said it was still working with Iran on a joint system to control commercial traffic, one that “would end the state of war.” Indirect talks continued through mediators in Qatar, Pakistan and Saudi Arabia.

Friday’s trading followed the same pattern. Brent opened near $99.42 to $99.90 after the IRGC’s mine-strike claim, then turned lower as the stronger dollar and the equity market weighed on risk assets. By 11:06 a.m. ET it had fallen 1.3% to $97.02. For the week, WTI is down about $11.19 a barrel, or 10.9%. Brent has fallen further because it carried more of the Middle East risk premium.

Washington After the Midterms: An Off-Ramp or a Lame-Duck Window to Strike

The election result has two opposite readings, and the oil market has not settled on either one. In the first, a Democratic Congress limits Trump’s support for the war against Iran, and the administration looks for a diplomatic way out before the new Congress is sworn in in January. Iran apparently sending the US a new proposal through Qatar supports this reading. Under it, ships would move freely through Hormuz in exchange for Washington meeting Tehran’s conditions.

The second reading is the reverse. The two months between the election and January 3, when the new Congress convenes, give Trump a lame-duck window to strike Iran again, before Democrats can use their majorities to restrict funding or authorization. Israeli Prime Minister Benjamin Netanyahu has been pressing Trump to attack Iran after the midterms, according to officials. Trump suggested several times before the vote that the US could strike after November 3.

Forecasters are split. One energy consultancy puts the probability of renewed fighting at 80% and expects both benchmarks to rise back above $100 a barrel. Another expects a limited strike before January 3, most likely between mid-November and mid-December, lasting up to four weeks. In that scenario, the recovery of oil flows through Hormuz would be pushed back to March 2027. A third view holds that the market has become more convinced the end of the midterms opens a diplomatic path.

Domestic politics add pressure in both directions. Gasoline prices have climbed high enough that Trump invoked the Defense Production Act on October 30 to increase refining output. A deal that brings crude down would help households, and the administration paid a political price for high prices in the election. But a deal on Iran’s terms, with tolls on the strait, sanctions relief and an end to the naval blockade, would be hard for the administration to accept after eight months of war.

For oil, the Washington outcome is close to binary. A signed agreement removes most of the risk premium and sends Brent toward $85. A new strike campaign puts it back above $110. Prices in between reflect uncertainty, not a settled view. Every headline about the talks, the mediators and US military positioning will move the market until one side of that outcome happens.

Tehran’s Terms: Seven Demands and a Two-Day Hormuz Offer

Iran’s position has been consistent: it will reopen Hormuz only after conditions are met. Foreign Minister Abbas Araghchi said Iran would open the strait and resume negotiations if Washington accepted its terms. “Otherwise, the current situation will continue, and Iran will not bow down,” he said. Foreign Ministry spokesman Esmaeil Baghaei said security in the strait could be restored, and negotiations could start, within a short period if Iran’s demands were met.

Tehran’s latest proposal lists seven demands, including an end to US “acts of aggression” and the lifting of the US naval blockade of Iranian ports. Iranian negotiators have also focused on sanctions relief, frozen Iranian assets and the fighting across the region. Those are much harder to resolve than navigation rules for the strait. They are the main obstacles to a deal, and none of them can be settled quickly.

The US position has been just as firm in a different direction. Washington wants total freedom of commercial navigation through the strait, with no Iranian tolls and no arrangement that requires ships to get Tehran’s approval before passing. In late September, at the United Nations General Assembly, Iran offered to reopen the strait after seven days, with talks on its nuclear program to follow. That offer was not accepted before the midterms. US officials have since said Iran has “lost complete control” of the strait and that its economy is in freefall.

The history of this conflict is a warning about early optimism. A US-Iran memorandum of understanding was announced in mid-June, under which Tehran would reopen Hormuz and the US would end its blockade. That deal collapsed on July 8, when Iran allegedly struck several commercial ships and the US responded with strikes on Iranian territory. A two-week ceasefire in April, which sent oil down 13% in one session, also broke down. Both times, the market priced peace before it happened and then had to reverse.

The structure of a possible deal also matters for prices. Iran and Oman have been discussing a joint mechanism to control commercial traffic through the strait. One proposal would set up a new “middle corridor” that eventually replaces the existing northern and southern routes, while protecting what Iran calls its rights as a coastal state. Any deal that gives Iran lasting influence over Hormuz traffic would leave a structural risk premium in Brent even after the fighting stops.

On the Water: Tanker Attacks, Mines and Gulf Flows at 81%

The physical situation in the Gulf has not caught up with this week’s optimism. At least five vessel incidents have been reported in the Persian Gulf since Sunday, and commercial traffic is still under threat even as crude shipments through Hormuz recover. On Friday, the IRGC claimed two more tankers struck mines and caught fire. Iran’s military had earlier said four tankers caught fire during transit. No independent maritime authority has confirmed these claims, but they keep insurers, shipowners and charterers cautious.

Mines are still a serious problem. On August 25, US officials confirmed that the Navy had cleared mines from the Strait of Hormuz Traffic Separation Scheme. Underwater drones had identified more than 100 suspected mines, and private contractors had dealt with them. Trump said the US would destroy any Iranian vessels laying new mines. If the new mine-strike claims are true, clearance work would have to restart, delaying full normalization of traffic even after a political deal.

Flows have recovered far more than headlines suggest. Gulf oil flows excluding Iran reached more than 81% of pre-war levels in September. The IEA reported that shipments through the strait rose from a May low of 9.6 million barrels per day to about 12 million barrels per day by early June, helped by ship-to-ship transfers in the Gulf of Oman. Producers in the region have been expanding exports that the war had disrupted for months.

That recovery is the main reason prices fell from more than $120 in March to $97 now. If 81% of non-Iranian Gulf supply is already moving, the market is no longer pricing a near-total closure of Hormuz. It is pricing the remaining 19% gap, the risk of a new closure, and Iran’s own exports, which cannot fully resume until the US blockade ends. Without escalation, the oil market is likely to keep slowly giving back the risk premium it built up in recent months, since Gulf flows have held up well.

The IEA has warned that full normalization will take time. “Mines will have to be removed from the main shipping lanes and supply chains will take time to normalize,” the agency said. Its earlier guidance said flows could take at least two months to resume after a reopening, and a full return to pre-war levels is unlikely before early 2027. That timeline limits how fast prices can fall even after a deal, because physical supply would lag the political announcement by weeks or months.

US Inventories: An 8.0 Million-Barrel Draw and Refineries at 93.5%

The US physical market tightened sharply in the latest weekly data. The Energy Information Administration reported that commercial crude stocks fell 8.0 million barrels in the week to October 30, against analyst expectations for an 890,000-barrel build. That 8.9 million-barrel miss is one of the largest bullish surprises of the year. It follows a 1.9 million-barrel draw in the week to October 23, which took inventories to 410.6 million barrels. Commercial crude stocks are now at 402.6 million barrels.

The details show strong refinery demand and heavy exports. Refinery crude runs rose 164,000 barrels per day, and utilization rose 0.7 percentage points to 93.5%, up from 92.8% the week before. US refiners are running hard to supply domestic fuel demand and export markets that have been cut off from Gulf supply. Crude stocks at Cushing, Oklahoma, the WTI delivery hub, rose 936,000 barrels. Gasoline stocks rose 1.5 million barrels, against expectations for an 871,000-barrel draw. Distillate stocks, which include diesel and heating oil, fell 1.6 million barrels, against forecasts for a 2.0 million-barrel decline.

The US has become the world’s supplier of last resort this year. With Gulf supply disrupted, US crude and product exports have hit records, and the Strategic Petroleum Reserve has released barrels at its fastest weekly pace ever. A wide WTI discount to Brent made US crude very competitive for foreign buyers, and that pulled barrels out of US inventories. In March, the WTI discount to Brent reached its widest level in 11 years.

Diesel is the tightest part of the market. Gasoline stocks have recovered somewhat, but distillate inventories keep drawing as heating demand rises into winter and export demand stays strong. Fears of a US diesel export ban have widened the Brent-WTI split at times, because restricting exports would add to domestic diesel supply. Trump’s use of the Defense Production Act on October 30 to boost refining is a response to that pressure on products.

For the forecast, the inventory data support prices. An 8.0 million-barrel draw at 93.5% refinery utilization means physical demand for crude is strong, whatever happens in the peace talks. The next EIA report, due next Wednesday, will show whether the draw was a one-off or the start of a trend. A second large draw would support WTI near $90 and make it harder for the deal scenario to push prices much lower.

OPEC+: A Third Month on Hold, With November 29 Next

OPEC+ has stepped back from active management of output while the war disrupts supply. On November 1, the seven core members, Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman, met virtually and agreed to keep December production at the levels required for September 2026. That is the third straight month of unchanged targets. The group raised output every month from April through September, then paused in October and November.

The pause reflects what is physically possible. Most Gulf members are still producing below their assigned targets because the Iran war has disrupted their exports. Raising quotas would mean little when producers cannot deliver their current allocations through Hormuz. The group is also expected to make no further changes to production policy in the fourth quarter and to focus on negotiating quotas for 2027.

The 2027 quota fight will matter far more for oil prices than December’s decision. If Hormuz reopens and Gulf production comes back, every OPEC+ member will want to recover lost market share. The IEA expects global supply to rise by 8.3 million barrels per day in 2027 if flows recover. A large part of that would come from Gulf producers returning to full output. Unless OPEC+ agrees on discipline, that supply surge could crash prices well below current levels.

The next meeting is November 29. It falls in the middle of the window when one consultancy expects a possible US strike on Iran. If a deal has been signed by then, OPEC+ will face pressure to signal how it will manage the return of Gulf barrels. If fighting has resumed, the group will probably keep holding output while prices stay high. Either way, the November 29 statement will be the first official signal of how producers expect the post-war market to work.

OPEC’s own demand outlook is more optimistic than the IEA’s. OPEC cut its 2026 demand growth forecast to 970,000 barrels per day in June but still expects demand to grow this year, while the IEA expects it to shrink. That gap shows the uncertainty about how much demand has been permanently lost to high prices. If OPEC’s view is right, demand will absorb returning supply more easily, and the 2027 glut would be smaller.

Demand Destruction: Eight Months of High Prices

High prices have cut demand to a degree not seen in decades. Before the war began in late February, the IEA expected global oil demand to grow by 850,000 barrels per day in 2026. By May, it was forecasting a contraction of 420,000 barrels per day to 104 million. In June, it deepened that to a 1.1 million-barrel-per-day decline. In August, it cut again to a 1.56 million-barrel-per-day contraction, leaving 2026 demand at 103.29 million barrels per day, 510,000 barrels per day lower than the previous report.

From the pre-war forecast to the August estimate, that is a swing of 2.4 million barrels per day in expected demand. It reflects consumers and businesses responding to oil prices that rose more than 60% in March, the largest monthly gain on record, and that stayed above $100 for long stretches of the year. Higher fuel costs reduced driving, flying, freight and petrochemical use, especially in price-sensitive emerging markets.

Inflation data confirm the damage. Euro-area inflation reached 4.0% in October, with energy prices up 20.8% from a year earlier. Eurozone retail sales fell 0.6% in July, the steepest monthly decline in more than a year. US consumers are facing high gasoline prices as winter heating demand rises. Those pressures hold down demand for fuel even when supply becomes available.

Some of the demand loss may be permanent. Countries have responded to the war by expanding strategic storage, diversifying suppliers and speeding up efficiency measures. The EIA has noted that any return to pre-conflict levels of inventories, production and trade would have to account for the partial restructuring of the global oil market that has already happened. Demand that shifted to alternative fuels or more efficient equipment will not fully return even when prices fall.

For the forecast, demand destruction limits how far prices can rise. Even with renewed fighting, the market would be absorbing a supply shock with weaker demand than at the start of the war, and that caps the upside. In March, Brent exceeded $120 with demand still close to pre-war levels. A new escalation with demand 1.56 million barrels per day lower would probably peak below that level unless Hormuz closed completely again.

The 2027 Glut Risk: An 8.3 Million-Barrel-Per-Day Supply Rebound

The biggest long-term risk for oil prices is what happens after peace. The IEA forecasts that a recovery in Hormuz traffic would turn a 4.3 million-barrel-per-day global supply contraction in 2026 into 8.3 million barrels per day of growth in 2027. Its earlier projection put 2027 supply at 110.3 million barrels per day against demand of 105.3 million. That gap of about 5 million barrels per day would be one of the largest surpluses in the history of the oil market.

Several sources would drive the supply rebound. Gulf producers would return to full output and to their OPEC+ quotas. Iranian exports could fully resume once the US blockade is lifted. American, Brazilian, Guyanese and Canadian producers expanded output during the high-price period, and that new capacity would stay online. The IEA has said supply will likely recover more slowly than demand, but once it does, the oversupply could be large.

The market has priced some of this. Brent has fallen from more than $120 in March to $97 now, even with the strait still partly constrained and tanker attacks continuing. Before the war, analysts expected the market to be in surplus heading into 2026, with prices in the $60s. The IEA noted at the start of the crisis that the market was already in surplus before the war. A return to that baseline, with even more supply capacity online, points to prices far below current levels.

How quickly the surplus arrives depends on the peace timeline. If a deal is signed in November and Hormuz fully reopens by early 2027, the surplus would build through the first half of next year. If escalation pushes the recovery out to March 2027 or later, the surplus would be delayed and prices could stay high for longer. Each month of delay keeps current prices in place a little longer.

For the forecast, the 2027 surplus is why upside rallies will probably be sold. Traders looking past the current conflict see a market heading into oversupply. That gives producers and hedgers a reason to lock in high prices whenever geopolitical headlines push Brent toward $110. That steady selling keeps the risk premium from building as high as it did earlier in the war.

The Brent-WTI Spread: A Gauge of the Risk Premium

The spread between Brent and WTI is the clearest measure of how much Middle East risk is in the price. Brent is the global seaborne benchmark and is closely tied to Gulf supply. WTI is priced at Cushing, Oklahoma, and is more exposed to US storage and export conditions. When the risk of a Middle East supply disruption rises, Brent rallies more than WTI, and the spread widens.

The spread has swung widely in 2026. In March, at the height of the initial Hormuz crisis, the WTI discount to Brent reached its widest in 11 years. Between September 8 and 18, the spot spread widened from $11.91 to $18.22 a barrel. On October 24, it stood at $13.45. Early Friday, one feed showed Brent at $102.81 and WTI at $91.71, an $11.10 gap. With Brent at $97.02 and WTI near $90.52, the spread has narrowed to about $6.50.

Historically the spread has run between $8 and $10 because of the cost of moving crude from inland US hubs to export terminals. The average for 2025 was $3.80, and during the 2022 energy crisis it averaged $11.30. A spread of $6.50 is close to its normal level, which means much of the Middle East risk premium has come out of Brent this week. That supports the view that the market has priced in a peace deal to a large extent.

A narrow spread raises the bar for further Brent declines. If most of the risk premium has already gone, more downside in Brent would have to come from fundamental oversupply, not from a falling geopolitical premium. That could take months to show up. If the peace talks collapse, on the other hand, the spread could widen back to $10 to $13 quickly as Brent rallies.

The spread also matters for US refiners and exporters. A wide spread gives US Gulf Coast refiners running WTI-priced crude a cost advantage over European and Asian refiners buying Brent-linked barrels. It also makes US crude exports more competitive. A narrower spread reduces both advantages. It could slow US exports and raise US inventories, which would put pressure on WTI if Brent falls further.

Macro Backdrop: The Dollar, the Fed and Equities

Broader markets added pressure on oil on Friday. The October US jobs report showed payrolls rising by 165,000, against a 59,000 consensus. Unemployment fell to 4.1%, and wages grew 3.1% from a year earlier. The dollar rose 0.7% to its highest level since October 29. A stronger dollar makes oil more expensive for buyers in other currencies, which weighs on demand. The odds of a December Fed rate hike rose to 74.8%.

The Fed is in a hiking cycle that oil prices helped cause. Chair Kevin Warsh raised rates to 3.75% to 4.00% on September 16, the first increase since 2023, largely because of energy-driven inflation. A December hike would tighten financial conditions further, slow economic growth and add to demand destruction. The 10-year Treasury yield rose to 4.90% after the jobs data. Higher borrowing costs weigh on industrial activity, freight and the economy’s overall appetite for energy.

The equity market sell-off has spread to risk sentiment more broadly. On Thursday, the Nasdaq fell 5.52% into correction territory and the S&P 500 lost 4.36%, its worst day since April 2025, on fears about AI data-center regulation. Global markets followed on Friday. Japan’s Nikkei fell 6.7%, and Korea’s KOSPI hit a circuit breaker after an 8.7% drop. A risk-off backdrop reduces speculative buying in commodities and adds to selling pressure in oil.

Central banks elsewhere face the same squeeze. The European Central Bank is expected to raise its deposit rate to 2.75% on December 17 because euro-area inflation is running at 4.0%, mostly from energy. Higher rates in Europe and the US slow growth in the two largest oil-importing blocs outside Asia. Asia accounts for 70% of expected new energy demand, but China and India remain highly sensitive to oil prices.

For the forecast, the macro backdrop works against oil. A stronger dollar, a hiking Fed, falling equities and demand destruction from high prices all point lower. They don’t outweigh the geopolitical risk, but they make rallies harder to sustain. In a renewed-escalation scenario, the macro drag would limit Brent’s upside to about $110, compared with the $120-plus peaks earlier in the war.

The Technical Map: $94.62 Support, $102 and $110 Resistance

Brent’s chart has clear levels after this week’s collapse. Immediate support is Wednesday’s settlement low at $94.62, the lowest close since August 31. Below that, the $90 handle is a major psychological level. A daily close below $90 would confirm a full unwind of the risk premium and open the way to the $85 zone, where the market would be pricing a signed deal and early recovery of flows.

On the upside, the first resistance is $99.42 to $99.90, where Brent traded early Friday before turning lower. The $100 handle is a psychological barrier that has repeatedly marked the line between war-premium and peace-premium pricing. Above that, $102.81, where Brent traded on one feed early Friday, is the next level. A recovery through $102 would show the market putting the escalation premium back into the price.

The major resistance is the $110 zone, where Brent traded at Monday’s weekly peak. Above that, the October 30 level near $118.70 and the April 29 high of $118.03 mark the top of the 2026 range, apart from March’s spike above $120. Breaking above $110 would need renewed military escalation or new supply disruptions.

WTI has a similar structure, shifted lower. Support is at Thursday’s low near $87.10, with $85 below that. Resistance sits at Thursday’s settlement of $90.52, then $91.71 and $96.30, Tuesday’s level. The 200-period moving average on the short-term chart is $98.88, and the $100 handle that WTI held at Monday’s open is above that. On the short-term chart, WTI is just above its 50-period average of $91.57.

Volatility will stay extreme. Brent moved between 3.88% and 8.7% in individual sessions this week. Average daily ranges of $4 to $9 mean either side of the range can be tested in a single session on one headline. In this environment, traders treat support and resistance as zones, not exact lines, and the weekend gap risk around peace talks and possible strikes is high.

Scenario Map: $110 Upside, $90–$110 Base, $85 Downside

Our forecast covers the period to the OPEC+ meeting on November 29 and the Fed decision on December 9, with three scenarios.

The base case, at 45% probability, is a Brent range of $90 to $110 with a midpoint of $100. In this scenario, indirect talks continue through Qatari, Pakistani and Saudi mediators without a signed agreement, tanker incidents keep happening at a low level, Gulf flows keep improving toward pre-war levels, and the US doesn’t launch a major new strike campaign. Brent swings between $94 and $105 on headlines, and WTI trades between $86 and $96. The end-of-November target is $100 for Brent and $92 for WTI.

The bullish case, at 30% probability, is a return to $110. The US would need to resume military strikes on Iran during the lame-duck window between mid-November and mid-December. Iran would respond by tightening restrictions on the strait or hitting more tankers, and Gulf flows would fall back. Brent would retest Monday’s peak at $110, 13% above the current price, and WTI would rise back above $100. If a strike disrupted major Gulf infrastructure, Brent could extend toward $118, though demand destruction and the macro drag would limit how far it went.

The bearish case, at 25% probability, is a fall to $85. Washington and Tehran would need to sign an agreement that reopens Hormuz, lifts the US blockade and allows Iranian exports to resume. Brent would break below $90 and fall toward $85, 12% below the current price, as traders look ahead to the 2027 surplus. WTI would drop toward $80. If OPEC+ signaled a fast return of Gulf barrels at its November 29 meeting, the decline could go further.

From $97.02, the risk-reward is roughly balanced. The bullish target of $110 is 13% higher. The bearish target of $85 is 12% lower. The base case of $100 is 3% above the current price. That symmetry fits a market waiting on a binary political outcome it can’t predict.

The signals that will decide which scenario plays out, in order of importance: any US military action against Iran, the status of the Qatar-mediated talks, independent confirmation of tanker attacks and mine strikes, next week’s EIA inventory report, and the November 29 OPEC+ statement. A strike would point to the bullish case. A signed deal would point to the bearish case. Continued talks without a resolution keep the base case.

Verdict: Neutral With an Upside Tilt, Buy Dips Toward $90–$94, Sell Rallies Into $105–$110

Brent at $97.02 and WTI at $90.52 have dropped 12% to 16% this week. That is the steepest weekly decline since 2020, driven by bets that the US midterm results will push Washington toward a deal with Iran. Brent fell 8.7% to $94.62 on Wednesday alone, its lowest close since August 31, before recovering 3.88% on Thursday as tanker attacks continued. The Brent-WTI spread has narrowed to about $6.50 from $13.45 in late October, which shows most of the Middle East risk premium has already come out.

The market has priced in a deal that hasn’t been signed. Iran is holding to seven demands, including an end to US military action and the lifting of the naval blockade. At least five vessel incidents have been reported in the Gulf since Sunday. Forecasters see a real chance of a US strike during the two-month lame-duck window. The US physical market tightened sharply: the EIA reported an 8.0 million-barrel crude draw against expectations for a build, and refinery utilization is at 93.5%. OPEC+ has held output steady for three months, and most Gulf members are still producing below target.

The case against higher prices is structural and looks further out. Demand destruction has taken 2026 demand down by 1.56 million barrels per day. A recovery in Hormuz flows would turn 2026’s supply contraction into an 8.3 million-barrel-per-day rebound in 2027 and a large surplus. A stronger dollar, a hiking Fed and the equity sell-off add to the downward pressure.

Our call is neutral with an upside tilt. We would buy dips toward $90 to $94 and sell rallies into $105 to $110, within a base-case range of $90 to $110 and a midpoint target of $100. A US strike on Iran would point to $110, 13% higher. A signed agreement that reopens Hormuz would point to $85, 12% lower. The decision point is Washington’s next move during the lame-duck window. Until a deal is signed or a strike begins, oil will trade in the range set by that uncertainty, with sharp moves in both directions.

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