Oil Posts Worst Week Since 2020 as US-Iran Peace Signals Sink Crude

Brent crude cratered last week, shedding 17% for its worst weekly drop since the pandemic choked off global demand in 2020. WTI wasn't far behind, down 13%, per London Stock Exchange Group figures that stretch back to 1988. Both benchmarks smashed through $95 and $90 respectively on the way down.

Wednesday was the bloodbath: Brent's January futures plunged 9.73% in a single session to close at $93.52 a barrel, while WTI fell 8.88% to $87.56. Friday brought a small bounce — Brent settled at $98.32 and WTI at $90.83 — but the damage was already done.

The trigger was diplomacy, not drill bits. Democrats swept both the Senate and the House in the US midterm elections, which traders read as mounting pressure on Washington to end the war with Iran. Qatar stepped in as mediator, Iran's president said the supreme leader had authorized pushing for peace talks, and both capitals signaled a return to the table. Iran also reportedly handed Washington a nuclear-related proposal through Qatar, feeding hopes of de-escalation.

Nobody should punch the all-clear yet. Iran's Revolutionary Guard reported three more tanker attacks in the Strait of Hormuz last Thursday, and crude flows through that chokepoint are still running below 60% of normal capacity. Donald Trump said he would soon decide whether to chase a peace deal or destroy Iran's remaining forces — hard talk that briefly lifted futures to a slightly higher close. The new Congress doesn't take office until January 3, so its leash on the war stays short for now.

The supply backdrop gave sellers room to run. JPMorgan estimates global crude supply outpaced demand by 1.4 million barrels per day in October, up from 1.1 million in September, with Middle East exports back near 20.7 million bpd after a March low of 9.8 million. Rystad Energy analyst Janiv Shah cautioned that the market is tilting toward oversupply but refineries still have to hunt down the specific grades their equipment can process — and that without real evidence Iran will sign, a flare-up of countermeasures could tighten the balance fast. OPEC+ left its December 2026 production target untouched last month after completing the return of 1.65 million bpd of cuts in September, and its ministers meet again on November 29.

Pump prices are catching some relief. AAA put Friday's US average for regular unleaded at $4.0688 a gallon, about 19% under the record $5.0165 set on June 14, 2022, with diesel at $6.2305 — roughly 4.5% below its own September 22 record. Taiwan's CPC Corporation froze gasoline and diesel prices for an eighth straight week through November 15, holding 92 unleaded at NT$31.2 a liter, 95 at NT$32.7, 98 at NT$34.7 and premium diesel at NT$29.9, after absorbing NT$8.0 per liter through tax cuts and its war stabilization mechanism. In Japan, the November 2 survey put regular gasoline at ¥170.0 a liter, a second straight weekly dip, but the government is raising its subsidized benchmark to about ¥172 on December 3, about ¥174 on December 10 and roughly ¥175 from December 17 — a ¥5 climb over three weeks that pushes domestic prices up even as crude collapses. Japan has also been diversifying fast: the Middle East supplied 94.0% of its crude in 2025, but preliminary August data shows that share at 62.6%, with the US at 31.6% after overtaking the UAE and Saudi Arabia as its top source in July.