Oil prices reversed earlier gains on Wednesday as investors assessed the implications of Democrats taking control of both chambers of Congress and the potential impact on President Donald Trump’s approach to the war with Iran.
Brent crude futures had risen around 0.7% during the Asian session, with US West Texas Intermediate (WTI) also posting similar gains.
However, as the picture from the US midterm elections became clearer, prices turned lower. At 5:10 AM ET, Brent slipped 1.26% to $102.2 a barrel, while WTI declined 0.68% to around $95.44.
Brent had already settled at its lowest level in close to four weeks during the previous session as traders weighed diplomatic efforts to end the conflicts involving Iran and Ukraine.
The latest political developments added another layer of uncertainty to the outlook for energy markets.
Democratic victory could complicate Trump’s Iran strategy
Democrats secured control of both the Senate and the House of Representatives in a major setback for Trump and congressional Republicans.
The victories included traditionally Republican states such as Texas and Kansas, highlighting the scale of the party’s gains.
While Trump retains significant authority over foreign policy and military decisions, Democratic control of Congress could make it harder for his administration to secure funding for an extended military campaign against Iran.
Berenberg’s Holger Schmieding warned that Congress would likely resist providing money for an expensive military campaign similar to the Iran war.
“Congress will most likely not grant him the money for an expensive campaign similar to the Iran war… We probably have to brace ourselves for significant foreign policy noise in the two final years of the Trump presidency,” Schmieding told CNBC.
Laurel Rapp, director of Chatham House’s US and North America Programme, also said to CNBC that Democrats could use votes in both chambers to try to constrain the administration’s approach to Iran, although whether those efforts would bind the president remains uncertain.
However, JC Lintzenich, visiting senior fellow at the German Marshall Fund, thinks that Trump will be far from a “lame duck”.
“The President of the United States still has lots of power, lots of authority. We still have pending action in Iran. We still have an unresolved situation with Russia and Ukraine. What we’ll now see is a little bit more congressional oversight,” he told CNBC.
Conscience or the cost of living, Americans said NO TO WAR, and we endorse this message.
If the US govt betrays their public will to serve international paymasters and blackmailers, it will learn our NO comes with a Nightmare.
— محمدباقر قالیباف | MB Ghalibaf (@mb_ghalibaf) November 4, 2026
Iranian Parliament Speaker Mohammad Bagher Ghalibaf also responded to the election outcome, saying: “Conscience or the cost of living, Americans said NO TO WAR, and we endorse this message.”
Inflation induced by the Iran war was among the major topics of contention for voters in the midterms.
Qatar’s diplomatic efforts offer hope
Meanwhile, diplomatic efforts to end the conflict continue, with Qatar facilitating discussions between Iranian and US officials.
Qatari mediators had traveled to Tehran to meet Iranian Foreign Minister Abbas Araghchi, while a draft proposal aimed at restarting negotiations has reportedly been under discussion.
Iran has indicated that it remains open to dialogue but wants Washington to accept its conditions, including those concerning the Strait of Hormuz.
The Trump administration has also said that it is willing to take the diplomatic route even as it remains ready to deal militarily.
However, the diplomatic process has yet to produce a breakthrough, leaving traders uncertain about how quickly regional energy supplies could return to normal.
Strait of Hormuz risks continue to support oil
Despite hopes of a diplomatic resolution, the threat to commercial shipping remains a concern for energy markets.
Iran said on Wednesday that in a fresh incident, four tankers were set ablaze after they hit mines near the Strait of Hormuz.
The previous month saw close to 30 attacks on commercial vessels, highlighting the risks facing one of the world’s most important oil transportation routes.
“The underlying supply disruption risks around the Strait of Hormuz have not disappeared. An unexpected drawdown in US crude inventories is also offering some fundamental support,” said Priyanka Sachdeva, head of market insights at Phillip Nova, told Reuters.
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