Oil Prices Head for 12% Weekly Drop Despite Friday Rebound as Tanker Attacks Rattle Hormuz

Oil prices rose for a second straight day on Friday, but the rebound has done little to repair a brutal week, with Brent on course for a 12% weekly drop as traders weigh hopes of an end to the nine-month US-Israeli war on Iran against fresh tanker attacks in the Strait of Hormuz.

Brent crude rose $1.57, or 1.6%, to $99.86 a barrel on Friday, while US benchmark West Texas Intermediate climbed $1.10, or 1.22%, to $91.62. Both gained for a second session, but Brent is still on track to lose 12% this week, and WTI is heading for a 12.1% weekly fall.

Key Points

• Brent rose $1.57, or 1.6%, to $99.86 a barrel on Friday; WTI climbed $1.10, or 1.22%, to $91.62.
• Brent is on track to fall 12% this week and WTI 12.1%, after oil fell 8% on Wednesday alone.
• The plunge followed the Democrats' midterm sweep, seen as a step toward ending the nine-month US-Israeli war on Iran.
• Iran said three more tankers were attacked on Thursday, with UKMTO data showing attacks near record pace.
• Oil flows through the Strait of Hormuz are under 60% of capacity.

What Happened

Oil prices rose on Friday, with Brent at $99.86 a barrel and WTI at $91.62 as of 0222 GMT. The gains marked a second straight day of recovery after both benchmarks were battered earlier in the week as traders priced in a possible end to the war in the Middle East. Even after Friday's rise, Brent remains below the $100 mark it lost on Wednesday.

A 12% drop in Brent over five trading days would be one of the largest weekly falls in recent years, after a rally of almost 14% in October took Brent to a six-month high. Wednesday's 8% plunge took prices to two-month lows; Friday's rebound was modest. Trading was pulled in two directions: hopes of a negotiated end to the war, and the tanker attacks, which reminded traders that oil flows through the region remain exposed.

Why Oil Prices Fell This Week

The selling began after the Democrats swept both chambers of Congress in the midterms on Tuesday, November 3. Traders read the result as a turning point for the nine-month US-Israeli war on Iran, betting that a Democratic-controlled Congress would push for de-escalation. Oil fell 8% on Wednesday alone, its steepest single-day drop in months.

Wednesday's plunge also pushed Brent below $100 a barrel for the first time since October, signalling that the market no longer believed a prolonged war premium was justified. Brent had already slipped below $100 earlier in the week.

US stocks suffered their worst day in months on Thursday, with the Dow falling 1,833 points and the Nasdaq plunging 5.5%, wiping out a record $5.4 trillion. President Donald Trump blamed the Democrats. Read our full report on Thursday's record market wipeout and Trump's response. Behind the moves sits a real diplomatic shift: Vice President JD Vance said Washington had made progress in talks with Iran, while President Trump said a deal was coming together very nicely.

Tanker Attacks Keep Hormuz Fears Alive

If the week's story were only about peace hopes, oil would likely have kept falling. Instead, a surge in tanker attacks in the Gulf and the Strait of Hormuz on Wednesday and Thursday put a floor under the market and drove Friday's rebound. Iran said on Thursday that three more tankers had been attacked. Data from the United Kingdom Maritime Trade Operations (UKMTO) shows attacks still running at close to record pace, and overall flows through the strait are now under 60% of capacity.

ANZ senior commodity strategist Daniel Hynes said traders viewed Wednesday's selloff as overdone: the physical risk to supply had not gone away. "Iran maintains control of the Strait of Hormuz and is unlikely to relinquish that control," Hynes said. The attacks followed earlier US strikes on Iran's Qeshm Island. Oil had risen after the reported US strike on Qeshm Island. Roughly a fifth of the world's petroleum liquids pass through the narrow channel between Iran and Oman, so when attacks rise, insurance costs climb and some owners refuse the voyage.

Reactions

Strategists are split between those who see the week's plunge as a lasting reset and those who see it as an overreaction. The ANZ view, voiced by Daniel Hynes, is firmly in the second camp: the selloff was overdone because the physical risks to supply remain. Others are more cautious, with many funds reluctant to rebuild large positions until the diplomatic picture is clearer. For now, the market is caught between a peace dividend and a supply shock.

Why It Matters

For American households, the oil market's weekly swing will show up at the pump, though not immediately. Retail gasoline prices follow crude with a lag of days to weeks, so the 12% drop should, if it holds, bring some relief to drivers paying war-inflated fuel prices. But Friday's rebound and the risk of further attacks mean that relief could prove short-lived. Diesel powers the trucks that move goods across the country, and heating oil matters as winter approaches, with the government already lending 300,000 barrels from the Northeast heating oil reserve.

A sustained fall would ease inflation and give the Federal Reserve more room on interest rates, while a renewed spike would squeeze household budgets as the holiday season begins. For the wider economy, the week's moves show how the midterm result is reshaping expectations: the same election that sent oil tumbling also sent stocks into their worst day in months.

What Happens Next

Traders head into the weekend watching the Gulf. Any new tanker attack, or any statement from Tehran or Washington on the negotiations, could move prices sharply on Monday, and the pace of attacks tracked by UKMTO has become a daily indicator almost as important as inventory data. With both sides reviewing mediator proposals and no deadline set by Washington, the coming days could bring a breakthrough or a breakdown. For now, though, the story is the strait: as long as flows through Hormuz run below 60% of capacity, oil prices will carry a risk premium that peace talk cannot erase.

Frequently Asked Questions

Why did oil prices fall so sharply this week?

Oil fell after the Democrats swept both chambers in the midterms, with traders betting on a de-escalation of the nine-month war on Iran. Brent fell 8% on Wednesday and is set for a 12% weekly drop.

How much did Brent and WTI rise on Friday?

Brent rose $1.57, or 1.6%, to $99.86 a barrel, and WTI climbed $1.10, or 1.22%, to $91.62.

What is happening in the Strait of Hormuz?

Attacks surged on Wednesday and Thursday, with Iran saying three more tankers were hit Thursday. UKMTO data shows attacks at close to record pace, and flows are under 60% of capacity.

Will US gas prices fall after the oil drop?

Fuel prices follow crude with a lag, so a sustained 12% fall should bring some relief at the pump, though Friday's rebound means it could be short-lived.

What could move oil prices next week?

Any new tanker attack, a breakthrough or breakdown in US-Iran talks, or OPEC signals could move prices.