EL7 Research · Oil and the Gulf
6 November 2026 · Prices through settlement on 5 November
Brent fell from 113.43 to 94.62 dollars a barrel between 30 October and 4 November on political signals that the war could soon end, most notably a post by US Vice-President JD Vance after the midterm elections, then rebounded 3.88% following fresh tanker attacks. We assess what physical barrels, inventories and speculative fund positions show, and ask what this volatility means for Gulf budgets.
Brent crude, the benchmark used to price most of the world’s oil, lost 16.58% of its value in just three sessions. The settlement price, the official closing price for the contract published by the exchange, fell from 113.43 dollars a barrel on 30 October to 94.62 dollars on 4 November. This was the lowest close since 31 August. These prices refer to futures, agreements to buy or sell a commodity at a specified price for delivery at a later date. Brent then rebounded 3.88% in the 5 November session to 98.29 dollars, following fresh attacks on oil tankers in the Gulf.
The decline came in two stages, each driven by political statements rather than changes in supply. On 2 November, Brent fell 7.63% as hopes revived that talks between Iranian and Qatari officials would end the war. On 4 November, it fell 8.67% after US Vice-President JD Vance wrote, the day after the Republicans lost the midterm elections, the US legislative elections held halfway through a presidential term: “The reason we lost is the war.” Between the two sessions, President Donald Trump confirmed that US forces had struck an air defence facility on Iran’s Qeshm Island near the Strait of Hormuz, describing it as “a small strike, it was not a war”.
Indicators of physical oil supply, however, did not improve as quickly. US commercial crude inventories fell for five consecutive weeks, by a total of 17.56 million barrels. ADNOC’s chief executive said the world had drawn about a billion barrels from inventories since shipping through the strait was disrupted. UK Maritime Trade Operations (UK Maritime Trade Operations, UKMTO), which receives reports of maritime incidents, said attacks on vessels remained close to their record pace.
The Commitment of Traders report (Commitment of Traders (COT)), which sets out positions by trader category and is published by the Commodity Futures Trading Commission (CFTC), the US regulator, shows that the sell-off was not a liquidation of crowded bets. Managed money, meaning speculative funds managing investors’ money, had reduced its net long position by 72.14% between 8 September and 27 October. This position is the number of long contracts minus short contracts, and here relates to West Texas Intermediate crude (West Texas Intermediate (WTI)), a US oil benchmark. The reduction preceded the sell-off, during weeks when Brent was climbing towards its peak.
In the Gulf, Saudi Arabia’s main equity index (TASI), which tracks market performance, rose 2.04%, and Aramco shares gained 1.23% over the period when Brent fell, while shares in Diamondback Energy and Devon Energy, among the largest US shale oil producers, lost 13.77% and 15.40% respectively. The lesson we documented in our analysis of Saudi Arabia’s Q3 budget is that export volumes affect the treasury as much as prices do: average Brent prices rose 33.6% while oil revenue fell 23%.
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