(Oil & Gas 360) – Oil prices were headed for their steepest weekly decline since the beginning of the COVID-19 pandemic as investors assessed whether Democratic victories in the U.S. midterm elections could accelerate diplomatic efforts to end the conflict with Iran and restore Middle Eastern petroleum exports.Brent crude futures for January traded at approximately $98.60 per barrel Friday morning, up 31 cents, while West Texas Intermediate gained 48 cents to $91.00. Despite the modest recovery, Brent was on track to decline approximately 16% for the week, while WTI faced a 13% loss.According to Reuters, the projected Brent decline would represent its largest weekly percentage drop since 2020 and its biggest dollar-denominated decline in LSEG records dating to 1988.The selloff accelerated Wednesday, when crude prices fell approximately 8% after Democrats secured control of both chambers of Congress.Investors interpreted the election results as potentially increasing political pressure on President Donald Trump to seek a negotiated resolution to the U.S.-Israeli conflict with Iran, which began in February.However, the incoming Congress will not assume office until January, and no comprehensive peace agreement has been announced.A potential reduction in hostilities could improve shipping conditions through the Strait of Hormuz, which handled approximately one-fifth of global oil and liquefied natural gas flows before the conflict.Middle Eastern crude exports have already shown signs of recovery, contributing to expectations that global petroleum supplies could exceed demand.Spot premiums for several Middle Eastern crude benchmarks have returned toward prewar levels, suggesting that immediate supply pressures are easing.JPMorgan recently estimated that global oil supplies exceeded demand by approximately 1.4 million barrels per day in October.Nevertheless, renewed attacks on vessels in the Persian Gulf and Strait of Hormuz have complicated expectations for a sustained market recovery.British maritime security authorities reported that attacks on oil-carrying vessels remain near record levels, while a fatal explosion aboard a petroleum products tanker underscored continuing risks to maritime operations.Transportation restrictions have also forced some operators to rely on longer shipping routes and ship-to-ship transfers, increasing logistical complexity.Rystad Energy analyst Janiv Shah indicated that the crude market is moving toward oversupply, although differences in available crude quality and refinery requirements continue to affect regional balances.For energy investors, the decline in crude prices could reduce near-term revenue expectations for upstream producers while offering potential feedstock cost relief to refiners.However, refined product margins, freight expenses and crude quality differentials will determine how much of that benefit reaches downstream operators.The market’s next direction will depend on whether diplomatic negotiations produce measurable improvements in shipping security and export availability.Until then, improving supply fundamentals and unresolved geopolitical risks are likely to remain competing influences on crude prices.Disclaimer This informational, opinion, and insights article is provided for informational purposes only and does not constitute investment, legal, or financial advice. The views expressed are based on publicly available information and market conditions at the time of publication and are subject to change without notice.