Oil slides as Republican midterm losses fuel hopes of Iran conflict exit
Crude fell after Vance linked Republican midterm losses to the Iran war, boosting expectations of a US exit from the conflict.
Houthi forces in Yemen have taken Bab el-Mandeb, pressuring energy routes already hit by Iran's actions at Hormuz.
The Iran-backed Houthi movement in Yemen has completed its seizure of the Bab el-Mandeb Strait, AFP reports, after taking control of strategic positions along the Red Sea. The waterway links the Red Sea with the Gulf of Aden and forms a major shipping corridor between the Indian Ocean, the Suez Canal and Europe. Roughly 10% of global trade moves through this route.
Global energy supplies now face pressure at two points on opposite sides of the Arabian Peninsula. Iranian disruption at Hormuz endangers the main outlet from the Persian Gulf, while Houthi authority over Bab el-Mandeb creates an added chokepoint for vessels travelling through the Red Sea and toward the Suez Canal.
Optimists see this as a major boost to Iran's leverage, one that could push the US out of the war and send oil prices back to pre-war levels. Pessimists, however, believe Trump may not pay it much mind and could keep waiting, hoping sanctions and attacks will compel Iran to surrender first.
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Crude fell after Vance linked Republican midterm losses to the Iran war, boosting expectations of a US exit from the conflict.
Gold broke above a key trendline after Vice President Vance's comments on Iran fueled de-escalation bets, opening potential rally to 4,700.
Gold prices rose over 6% this week after Democratic midterm wins. The metal recovered above $4,000 and now faces a test at $4,200.
Oil prices dropped after the Democrats won the midterms. WTI crude now tests a key support region near moving averages.