Oil Prices Rise as Investors Weigh U.S. Midterm Results, Iran Risks — Update

By Giulia Petroni and Farhan Rafid

Oil prices rose Wednesday as investors weighed the Democrats' sweep of Congress in the U.S. midterm elections and the implications for President Trump's approach to Iran, amid uncertainty over whether Washington will pursue diplomacy or renew military strikes.

Front-month Brent crude futures, the global oil benchmark, was up 0.7% at $104.30 a barrel in early European trading Wednesday. West Texas Intermediate futures, the U.S. benchmark, gained 0.5% to $96.62 a barrel.

Democrats won control of both chambers of the U.S. Congress in Tuesday's midterm elections, flipping Republican-held seats in several states. The results could introduce additional constraints on Trump's agenda, particularly around funding overseas military operations and other foreign policy commitments.

Trump acknowledged in an interview with The Wall Street Journal that the Iran war had contributed to Republican losses, but said he didn't regret the conflict. He also said he would work with Democrats while retaining the option of using his presidential veto.

The shift in congressional control could complicate Trump's efforts to pursue his foreign policy priorities, although any change in the balance of power will take time to translate into policy.

"The new Congress will not take office until January 3, leaving nearly two months for the administration to pursue further foreign policy initiatives under the existing congressional composition," said Michelle Brouhard, head of policy and geopolitical risk at Kpler.

For oil traders, the more immediate question is whether Washington will pursue a diplomatic agreement with Tehran or launch another round of military strikes.

ING analysts Warren Patterson and Ewa Manthey said the market has increasingly priced in the possibility of further hostilities between the U.S. and Iran. If the elections pass without either a new military escalation or a diplomatic agreement, traders will have to assess whether the geopolitical risk premium in oil prices can be sustained or begins to ease, they said.

Prices have been volatile this week as traders weighed fresh U.S. military action against diplomatic efforts to end the conflict with Iran. Signs of progress in negotiations have offered some relief, but uncertainty over regional developments and persistent threats to shipping continue to underpin prices. A U.S. attack on Iran's Qeshm Island fueled fears of renewed escalation in the region.

A broader military campaign could prompt Iranian retaliation against economic and civilian infrastructure across the region, further disrupting energy supplies and threatening shipping through the Strait of Hormuz, a critical artery for global oil and gas trade.

The conflict has put energy prices at the center of the political debate during the U.S. midterms, as Americans grapple with higher costs of fuel, groceries and utilities. Inflation remains above the Federal Reserve's 2% target, with the economic fallout from the Iran war adding to price pressures and uncertainty over the outlook.

"I think the starting point is that Americans vote with their pocketbooks, which is nothing new," said Brouhard. "Affordability and inflation are central concerns, and energy prices are one of the most visible ways consumers experience those pressures."

Negotiations involving Russia and Ukraine are another key development for energy markets, analysts said. Any progress could affect U.S. sanctions on the Kremlin and Russian fuel exports, as well as the security of energy infrastructure at a time when refined-product markets, particularly diesel, remain severely constrained.

Write to Giulia Petroni at giulia.petroni@wsj.com and Farhan Rafid at farhan.rafid@wsj.com

(END) Dow Jones Newswires

November 04, 2026 02:47 ET (07:47 GMT)