Oil prices fell sharply this week, with benchmarks hitting their lowest levels in nearly two months amid hopes that a Democratic sweep in the U.S. midterm elections could accelerate efforts to end the conflict with Iran.

Brent crude futures for January closed at $98.32 a barrel on Friday, up slightly but on track for a roughly 16% weekly decline, the steepest since the start of the COVID-19 pandemic. West Texas Intermediate settled at $90.83, heading for a 13% drop. Both contracts briefly touched two-month lows earlier in the week, with Brent dropping below $95 and WTI under $89.

The selloff accelerated after Tuesday's elections, in which Democrats gained control of Congress. Traders interpreted the results as increasing the likelihood of a diplomatic resolution to the months-long Iran conflict, which had added a significant war premium to prices. Brent had ended October near six-month highs above $110 before the pullback.

Prices fell nearly 8% on Wednesday alone as optimism grew for reduced supply risks in the Strait of Hormuz. OPEC+ held production plans steady at its recent meeting, providing little additional support. Continued tanker attacks in the region offered some floor to prices, but the overall trend reflected unwinding of geopolitical tensions.

Lower oil prices provide relief to American consumers facing elevated energy costs and could ease broader inflationary pressures. The drop follows a period of volatility tied to Middle East developments and offers a potential boost to economic activity heading into the holiday season.

Analysts noted that any firm agreement to de-escalate could lead to higher exports from the region, further pressuring prices. However, risks remain if talks falter or if supply disruptions persist. Friday's modest rebound reflected ongoing uncertainty, with some observers assigning a high probability to renewed military action.

The week's action marked one of the largest percentage declines for oil in years, highlighting how quickly market sentiment can shift on political developments. U.S. retail gasoline prices have also eased in recent sessions, benefiting drivers nationwide.