From Startup Fortune · · 2m
Brent crude drops 16% in a week
Traders bet on US-Iran deal as Brent crude falls 16% to $98.
In brief
Traders bet on US-Iran deal as Brent crude falls 16% to $98. Brent crude dropped 16% to $98 a barrel this week as traders anticipated a US-Iran deal, impacting startup valuations and Fed rate decisions. Originally reported by Startup Fortune.
Brent crude drops 16% in a week
Brent crude futures settled at $98.32 a barrel on Friday, November 6, up 3 cents on the day, according to FinanceFeeds.
Weekly drop to $98
The prior week closed with January Brent at $117.64, which puts the weekly fall at about 16%, the steepest since the Covid-19 shock of 2020.
Traders bet on US-Iran deal
Traders decided the US midterm elections, which Democrats won in both chambers, clear the way for Washington to cut a deal with Iran, and they sold the war premium before anything was signed.
Iran's nuclear proposal
Iran reportedly sent a nuclear proposal through Qatar, with conditions that include an end to the US naval blockade, sanctions relief and unfrozen assets.
Ongoing attacks in Strait of Hormuz
Iranian drone and missile attacks in the Strait of Hormuz continue, and one seafarer was killed in a missile strike on an oil products vessel on November 5.
Sanctions on Indian and Turkish firms
Washington is also still tightening the screws, expanding sanctions on Indian and Turkish firms accused of helping Iran get around oil restrictions.
Oil prices impact startup valuations
Brent crude's breach of $100 a barrel on July 23 has pushed the U.S. 10-year Treasury yield to 4.65%, Japan's bond yield to a 30-year high, and Germany's Bund to a 14-year peak.
Startup valuation consequences
For startups, the direct consequence is compressed valuation multiples and costlier venture debt, arriving just as the Fed's rate-cut window narrows.
Physical signs of unwind
Saudi Aramco cut its December Asian pricing to six-year lows, with Arab Light at a $7 discount to the Dubai/Oman benchmark.
Why $98 is not cheap
Because it started from $117.64.A fall of nearly $20 is a big move on any day, but it only takes Brent back to a level that was an energy shock in itself not long ago.
The big picture
Brent crude dropped 16% to $98 a barrel this week as traders anticipated a US-Iran deal, impacting startup valuations and Fed rate decisions.
