WTI drops to near 101.00 as Trump rules out immediate Iranian strikes

• WTI fell after US President Trump ruled out immediate military strikes against Iran.

• Houthi attacks on Saudi targets and potential Post-Election Iranian retaliation keep geopolitical risks elevated.

• Trump implemented costly policy measures, including easing Russian fuel sanctions, to tackle high diesel prices.

West Texas Intermediate (WTI) oil price declines after registering over 4% gains in the previous trading day, hovering around $101.10 during Asian hours on Monday. Crude oil prices declined after US President Donald Trump ruled out immediate military action against Iran, stating, “there will not be a strike today,” according to Al Jazeera. This followed earlier remarks where Trump suggested Washington might need to “finish the job” or potentially reach a deal with Tehran amidst growing Iranian and Houthi threats against American interests in the region.

However, fears remain that strikes against Iran could resume following this week’s Israeli elections and next week’s US midterm elections, with Iran reportedly prepared to retaliate by targeting Israel and the UAE.

Adding to regional tensions, Yemen's Houthis declared on Sunday that they will continue targeting Saudi Arabia's King Khalid Airport in Riyadh, as reported by Reuters. This announcement came just hours after Saudi officials stated that airport flights had resumed despite repeated attacks by the group.

Conflict in the area persisted over the weekend, with the Houthis claiming attacks on the Saudi airport and oil facilities on Saturday, while Saudi Arabia reported on Sunday that it had intercepted additional missiles and drones. The top oil exporter restarted partial operations at its main airport on Sunday following damage from previous Houthi strikes, even as the militant group vowed to maintain its offensive.

Meanwhile, with the November midterm elections fast approaching, President Donald Trump is deploying a range of costly and politically fraught measures to address stubborn diesel prices. To lower costs, his administration has offered billions of dollars to farmers, relaxed regulations for truckers, eased sanctions on Russian fuel, and pressured European allies to release emergency oil stocks.

Oil outlook stays biased higher as election risks keep escalation premium in play

According to TD Securities, crude prices are likely to remain supported in the coming weeks, with the bank highlighting that “we expect crude oil will remain skewed to the upside in the near term as escalation risk ahead of Israeli elections and US midterm elections remains elevated.” This persistent geopolitical risk premium, in their view, continues to underpin a constructive bias for oil despite broader market uncertainties.