Oil nears $94, Trump election setback fuels Iran peace hopes

November 05, 2026 (MLN): Oil prices extended their decline for a fourth consecutive session on Thursday, as investors assessed the potential impact of US President Donald Trump's Republican Party losses in Congressional elections on the likelihood of further military escalation in the Middle East.

Currently, Brent crude futures is down, 0.73%, at $93.93 per barrel.

West Texas Intermediate (WTI) crude futures is down by $1.12, or 1.27%, to $87.4 00per barrel by [10:23 am] PST.

The election setback has raised expectations that Trump may face greater constraints on military action against Iran, increasing the possibility of a diplomatic settlement.

Two sources familiar with Gulf government discussions said on Wednesday that a weakened Trump would have stronger incentives to pursue an agreement, making a full-scale offensive against Iran less likely, as reported by Reuters.

An end to hostilities could help restore oil supplies disrupted by the conflict across the Middle East. However, analysts warned that uncertainty surrounding the diplomatic process could continue to drive volatility in energy markets.

Meanwhile, crude shipments through the Strait of Hormuz, a vital route for oil exports from Gulf producers, have recovered to levels close to those recorded before the war, although transportation costs remain elevated.

The recovery in regional supplies has also shifted the global oil market back into surplus following months of disruption, according to JPMorgan.

In a Wednesday note, the bank estimated that the market recorded a surplus of 1.1 million barrels per day in September, which widened to 1.4 million bpd in October, approaching last year's average surplus of 1.3 million bpd.

Despite improving supply conditions, analysts said the outlook remained uncertain ahead of the Democratic-controlled Congress taking office in January.

Citi warned on Thursday that the end of the midterm elections could allow the White House to concentrate more heavily on its executive authority in foreign policy, potentially increasing the risk of renewed confrontation with Iran.

Eurasia Group also revised its assessment of possible outcomes, lowering the probability of renewed US strikes against Iran to 60% from 65%.

However, it reduced the likelihood of a diplomatic agreement to 10% from 20%, citing Iran's continued adherence to its demands and Trump's reluctance to accept terms that could be viewed as a defeat.

The group increased its estimate for a prolonged standoff to 30% from 15%.

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