Mayank Bansal, CFA
Mayank Bansal is a CFA Charterholder and heads the Equity Research team at Kapitales Research, with over 5 years of experience analysing global equity markets. He leads fundamental, data-driven research combining rigorous financial analysis with macro trends.
Brent Crude Near US$95: What the Oil Drop Means for ASX Energy and Airlines
Highlights
Introduction
Brent crude settled at US$94.62 a barrel on Wednesday 4 November 2026, down US$8.98 or about 8.7%, after markets bet that a Democratic sweep of both houses of the US Congress could hasten an end to the US-Iran war. West Texas Intermediate settled at US$88.12, down about 8.3%. Both benchmarks closed at their lowest levels since 31 August. As at around 11:15 AEDT / 05:45 IST on Thursday 5 November 2026, that overnight oil slide was flowing straight into ASX trading. The S&P/ASX 200 Energy Index was about 4.5% lower near 10,271, while airline shares moved in the opposite direction on hopes of cheaper fuel.
Why Oil Fell After the Midterm Result
Investors read the midterm outcome as raising the odds of a negotiated path out of the conflict rather than a further military escalation. Senior US comments overnight also linked the Republican losses in part to the war and elevated fuel costs, reinforcing that interpretation in the futures market.
The decline took Brent below US$95 and marked the weakest settlement in more than two months. Oil had climbed earlier on supply-disruption risk tied to the Middle East conflict; Thursday's local session is the first full ASX response to the sharp overnight reversal of that risk premium.
ASX Energy Producers Feel the Pressure
Listed oil and gas producers typically move with crude. Woodside Energy Group (ASX: WDS) was around AU$30.61, down about 6.0% from Wednesday's close near AU$32.55. Santos (ASX: STO) traded near AU$8.62, about 4.8% lower. Beach Energy (ASX: BPT) was softer near AU$0.89, down about 3%.
Origin Energy (ASX: ORG) was little changed near AU$12.34. Fuel retailers Ampol (ASX: ALD) and Viva Energy Group (ASX: VEA) were softer near AU$36.68 and AU$2.71 respectively, as wholesale and pump prices often adjust on different timelines from crude.
Airlines, Fuel Costs and the Inflation Angle
Airlines are on the other side of the ledger. Jet fuel is one of the largest operating costs for carriers, so a sustained drop in crude can ease cost pressure even if hedges delay the full benefit. Qantas Airways (ASX: QAN) was around AU$9.32, up about 4.7% from Wednesday's AU$8.90 close. Overnight, a US airlines exchange-traded fund also jumped about 9%, underscoring the same theme globally.
The inflation link matters for Australian households and for monetary policy. The Reserve Bank of Australia this week lifted the cash rate target to 4.85% and pointed to higher fuel and commodity prices linked to the Middle East conflict as part of the inflation story. A lasting decline in oil would remove one of the pressures the Board highlighted, though one session's futures move is not the same as a confirmed easing in local pump prices or underlying inflation.
What Investors Should Watch
Conclusion
Brent's slide to about US$94.62, a two-month low after an 8.7% drop, is reshaping Thursday's ASX session. Energy producers such as Woodside and Santos fell about 5% to 6%, while Qantas gained about 4.7% on cheaper jet-fuel hopes. If lower oil persists, it could also ease one of the fuel-driven inflation pressures the Reserve Bank flagged when it raised the cash rate to 4.85% this week.
Note- All data presented is based on information available at the time of writing.
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