Brent crude falls below $95 as midterms raise odds of Iran exit

Brent crude settled 8.7 percent lower at $94.62 a barrel on 4 November 2026, its weakest close since 31 August, after Democrats secured majorities in both chambers of the United States Congress. West Texas Intermediate fell 8.3 percent to $88.12. Prices extended the decline on 5 November, with Brent trading near $93.65.

The move followed the clearest electoral signal yet that voters want the war with Iran to end. President Trump acknowledged the conflict had hurt his party, and Vice President JD Vance stated outright that the war was the reason Republicans lost Congress. Senate Democrats have pledged to use their new majority to press for an exit. Markets treated the combination as a material reduction in the risk of further escalation or prolonged disruption to shipping through the Strait of Hormuz.

Crude inventories in the United States fell for a fifth consecutive week, yet the geopolitical premium dominated. Shipments of oil products out of the Gulf remain constrained by attacks on commercial vessels, and US petrol and diesel prices have reached record levels in recent months. Those retail prices were a central complaint in the midterm campaigns.

The sell-off is the sharpest single-day drop since May. Over the past week Brent has fallen roughly 16 percent as the probability of a negotiated settlement has risen. Energy shares led declines in equity markets even as broader indices rose on the clearer political picture. The Dow Jones Industrial Average gained more than 1,000 points in overnight trading after the results became clear.

Traders now weigh two paths. One is a diplomatic off-ramp that restores more normal flows through Hormuz and reduces the risk premium. The other is continued fighting if the White House chooses to press the campaign despite the congressional shift. Trump has said he would repeat the decision if the alternative was an Iranian nuclear weapon, but he faces a Congress that can withhold funding, hold hearings and shape public pressure.

October flows through the Gulf already stood at about three-quarters of pre-war levels. Further attacks or a wider blockade would reverse the price decline quickly. For now, the dominant trade is the removal of escalation risk after the election.

Lower oil prices would ease inflation pressures that have persisted through 2026 and that contributed to the Republican losses. Petrol prices in the United States remain elevated relative to early 2025 levels, and any sustained drop would show up at the pump within weeks. Central banks and governments that import energy will watch the next round of talks for confirmation that the risk premium continues to shrink.

The midterm result does not end the conflict by itself. It does change the balance of incentives in Washington. Markets have already adjusted the price of crude to reflect that change.