Oil prices steady as Trump rules out Iran strikes
Oil prices settled slightly higher after President Trump said the U.S. would not attack Iran before the November midterm elections. Traders also weighed ongoing Persian Gulf shipping risks and Gulf of Mexico production shut-ins.
S. midterm elections against persistent shipping risks in the Persian Gulf and extensive offshore production shut-ins in the Gulf of Mexico. 4% weekly gain. 8% on the week.
S. wouldn't attack Iran before the November midterm elections, citing what he called "productive discussions" with Tehran. S. naval blockade of Iran remains in place, with roughly a dozen Navy ships in the region, The Wall Street Journal reported.
S. offshore production remains disrupted, said Hani Abuagla, a senior market analyst at XTB MENA. Analysts at MUFG said geopolitical risks remain high amid fighting between Saudi Arabia and the Houthis, while shipping through the Persian Gulf and Strait of Hormuz continues to face threats. Brent's spread between the first two futures months remains in backwardation at around $3 a barrel, indicating continued tightness in the near-term market, they said.
Backwardation is when near-term oil futures trade at a premium to contracts for later delivery, typically indicating tighter supplies in the immediate market. Goldman Sachs estimated that Brent's geopolitical risk premium reached $22 a barrel in September, the second-highest monthly level on record and above the peak of $16 during the Russia-Ukraine war in 2022. The bank also estimated that a 100 million-barrel decline in commercial inventories across OECD countries raised Brent's fair value by nearly $8 a barrel. Tensions elsewhere in the region also remain high.
Iran and its Houthi allies in Yemen carried out another series of attacks Wednesday night and Thursday, including strikes targeting shipping in the Persian Gulf and Saudi Arabia, the Journal reported. S. also increased economic pressure on Tehran on Thursday. The Treasury Department sanctioned 17 vessels it said were part of Iran's remaining shadow fleet and had transported millions of barrels of Iranian crude, petroleum and petrochemical products to markets in South and East Asia.
S. Gulf production. S. coast, and was expected to make landfall in Alabama "at or near major hurricane strength" Friday evening, according to the National Hurricane Center.
8% of natural gas output. S. Gulf Coast refineries has narrowed despite the offshore shutdowns. 5 million barrels a day expected earlier in the week, S&P Global Energy said.
S. 1 million barrels a day the previous week, S&P said. S. refineries appeared to have dodged a threat from the storm, Robert Yawger, a commodity specialist at Mizuho Securities USA, said in a note.
S. can afford to take a few barrels of offshore production offline," he said. com (END) Dow Jones Newswires October 09, 2026 15:20 ET (19:20 GMT) Copyright (c) 2026 Dow Jones & Company, Inc. The statements in this document shall not be considered as an objective or independent explanation of the matters.
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