Global oil prices remained stable during Wednesday’s trading (October 28) following a decline over the previous two sessions. Brent crude traded above US$114 per barrel, while West Texas Intermediate (WTI) hovered around US$100 per barrel, as investors closely monitored the results of Israel’s general election—an outcome that could influence the trajectory of the conflict with Iran.
Preliminary results indicate a tight race between the opposition bloc led by Gadi Eisenkot and the bloc headed by Prime Minister Benjamin Netanyahu. Neither side has yet secured the majority required to form a government, with the vote count still underway. This political uncertainty has kept the market cautious regarding potential shifts in Israel’s policy toward Iran.
Meanwhile, diplomatic efforts in the Middle East continue, following discussions in Tehran involving officials from Saudi Arabia, Pakistan, and Turkey. However, Iran maintains several conditions for ending the conflict. This uncertainty has sustained a risk premium on oil, following an 85% surge in Brent prices this year, driven by disruptions to supply and energy transit routes.
Supply risks remain elevated after Saudi Arabia’s energy infrastructure was once again targeted by Houthi attacks. A fire was reported near the Ras Tanura export terminal, though it has since been brought under control. Separately, Iran has threatened legal action against vessels owned by Sinokor, citing alleged violations in the Strait of Hormuz.
Regarding U.S. supply, the American Petroleum Institute reported a decline in crude oil inventories of approximately 2 million barrels last week. Investors are now awaiting official inventory data and the Federal Reserve’s interest rate decision. The combination of political uncertainty in Israel, risks in the Middle East, and the Federal Reserve’s policy is expected to remain the primary driver of oil prices in the near term.