Oil prices were relatively unchanged on Friday, with Brent crude holding near $98 per barrel as markets weighed expectations of a potential de-escalation in the conflict with Iran against continued threats to Middle East oil shipments. Brent crude futures rose $0.03 to $98.32 per barrel, while U.S. West Texas Intermediate (WTI) crude gained $0.31 to $90.83 per barrel. Despite the modest daily gains, both benchmarks remained on track for significant weekly losses, with Brent heading for its steepest weekly percentage decline since the beginning of the COVID-19 pandemic.

The election results have prompted investors to unwind some of the geopolitical risk premium previously built into crude prices, as expectations grow that diplomatic efforts could reduce tensions and allow additional oil exports from the Middle East. However, the possibility of a prolonged conflict continues to create uncertainty around global supply flows.

Signs of a potential oversupply in the crude market have added further downward pressure on prices. Spot premiums for Middle Eastern crude have returned to levels seen before the conflict, suggesting that supply conditions are gradually easing. However, longer shipping routes, ship-to-ship transfers and continued logistical disruptions near the Strait of Hormuz are complicating the recovery in regional oil flows. Market participants remain cautious, as a breakdown in negotiations or renewed military escalation could quickly tighten supply conditions again.

Despite the sharp weekly decline, continued attacks on commercial vessels in the Gulf and Strait of Hormuz remain a significant concern. A Greek ship manager reported that a crew member was killed following an explosion aboard an oil products tanker on November 5, believed to have been caused by a missile attack. Data from the United Kingdom Maritime Trade Operations (UKMTO) also indicate that attacks on oil-carrying vessels remain near record levels.

The market continues to balance expectations of improved supply availability against persistent shipping risks and uncertainty surrounding negotiations with Iran. While the recent decline has removed some of the geopolitical premium from crude prices, the underlying risks to Middle East oil production and transportation remain unresolved.