Trump sees Iran war ending soon after mid-term elections, predicts oil prices will then fall sharply

• Brent crude settled at $104.61 per barrel (down 2.8%) and WTI at $100.05 (down 2.4%) on Friday after peaking at $108 and $104 respectively on Thursday
• Saudi Arabia shut down its East-West pipeline (7 million barrels per day capacity) after drone attacks from Iraq, forcing reliance on alternative export routes
• Iran-backed Houthi rebels captured Perim Island and Mokha port, threatening control of the Bab el-Mandeb Strait and prompting Saudi Arabia to request U.S. military intervention

Market Summary: Trump Forecasts Iran War End, Oil Price Decline

Key Developments

President Trump predicted the Iran war will end shortly after November's mid-term elections, anticipating a sharp decline in oil prices following resolution. He made these comments during a trip to Ireland on Saturday.

Oil Market Movements

Price Action:

• Brent crude: settled down 2.8% at $104.61/barrel on Friday
• WTI crude: down 2.4% to $100.05/barrel
• Weekly performance: both benchmarks posted sharp gains, trading above $100/barrel for the first time in months
• Thursday peaks: Brent hit ~$108, WTI reached $104+

Friday's retreat followed reports that Iran will meet with Gulf states in Oman on Monday to discuss the Strait of Hormuz and establish an Iran-Oman shipping route.

Geopolitical Tensions

Saudi Infrastructure Attacks:

Trump indicated Iran was "probably" responsible for drone attacks on Saudi Arabia's East-West crude oil pipeline, targeting facilities in Riyadh and Medina regions. The pipeline, with 7 million barrel/day capacity, was shut down as a precautionary measure. Multiple injuries were reported.

Houthi Advances:

Iran-backed Houthi rebels captured Yemen's Perim Island and Mokha port city, threatening control of the Bab el-Mandeb Strait—a critical shipping chokepoint connecting the Red Sea to the Gulf of Aden. This development, combined with tensions around the Strait of Hormuz, puts two vital oil transit routes at risk. Saudi Crown Prince Mohammed bin Salman reportedly pressed Trump for U.S. military intervention.

Market Implications

Energy markets face continued volatility as diplomatic efforts compete with escalating regional conflict. Control over key shipping routes could significantly impact global oil supply and trade flows.