Oil falls on Iran war uncertainty, US Democrats' midterm sweep

Oil prices climbed as market participants awaited the next steps in the United States' dispute with Iran following the Democratic Party's victory in the U.S. midterm elections, according to a report by Reuters on November 4. Brent crude futures increased by 82 cents, or 0.8%, to $104.42 per barrel, while U.S. West Texas Intermediate (WTI) crude futures rose by 50 cents, or 0.5%, to $96.59 per barrel.

The unpredictable nature of President Trump's actions, ranging from continued military strikes to statements minimizing the risk of further escalation, has made it challenging for traders to gauge the market's direction. Priyanka Sachdeva, the head of market analysis at Phillip Nova, suggested that profit-taking and a reduction in speculative long positions were warranted, particularly after the market's substantial rally in October.

Sachdeva acknowledged that underlying risks of oil supply disruptions in the Strait of Hormuz had not vanished. She added that an unexpected decrease in U.S. crude oil inventories also provided some fundamental support to the price surge.

Oil prices experienced a more than $1 per barrel increase on October 21, 2026, as escalating tensions in the Middle East amplified concerns about supply disruptions. On October 22, oil prices surged due to an order for U.S. diplomats to leave Saudi Arabia. On October 23, oil prices remained relatively stable amid worries about additional energy supply disruptions caused by Houthi attacks on Saudi Arabia, a key oil exporter.

On October 26, oil prices fell as hopes grew that tensions between the United States and Iran might ease. However, persistent attacks on Saudi Arabia, a major oil producer, kept investors on edge.

Oil prices experienced an uptick on November 3 following reports that the United States had targeted Iran's Qeshm Island, fueling concerns about the escalation of the eight-month conflict and potential prolonged disruptions to Middle Eastern oil supplies.