Oil extends losses as U.S. midterm results fuel Iran peace hopes

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Oil falls over 2%

Highlights

Brent fell 2.15%, while WTI lost 2.13%.
Democratic control of Congress raised questions over U.S. policy toward Iran.
Recovering Gulf oil exports added pressure on prices.

January Brent crude futures dropped 2.15%, to $101.37 a barrel, while December West Texas Intermediate futures fell 2.13%, to $94.04. Both benchmarks had briefly risen earlier in the session before reversing course as traders reassessed the outlook for the conflict, according to Reuters.

Democratic victory puts Iran policy under scrutiny

Democrats won control of both the House of Representatives and Senate on Tuesday, dealing a major political setback to President Donald Trump. The election campaign was heavily influenced by concerns about inflation and the economic consequences of the U.S.-Israeli war with Iran, which began in February.

Trump acknowledged that the conflict contributed to the Republican defeat. His administration has since indicated that immediate military action against Iran is not planned, encouraging speculation that Washington could give negotiations more time.

Qatar has intensified mediation efforts aimed at preventing further attacks and securing an agreement between the two countries. However, Iranian officials have cautioned that substantial differences remain, leaving the prospects for a settlement uncertain.

Iran's Supreme Leader Mojtaba Khamenei has also indicated that Tehran does not expect U.S. hostility to disappear simply because control of Congress has changed. Although Democratic lawmakers could increase oversight of the conflict, decisions on military operations and diplomacy remain largely with the president.

Gulf shipments recover as traders monitor supply

Improving export flows from the Middle East have added downward pressure on crude prices. Gulf shipments of crude oil, condensate, and refined products, excluding liquefied petroleum gas, averaged 17.1 million barrels per day in October, according to Vortexa tracking data.

That was below September's 18.9 million barrels per day but represented approximately three-quarters of prewar export volumes. The recovery has helped ease concerns about immediate shortages, even as attacks on tankers continue to threaten shipping routes.

U.S. inventory figures offered a contrasting signal. Industry data showed crude stockpiles fell by 5.27 million barrels during the week ended October 30, against analysts' expectations for an increase of about 880,000 barrels.

Peace talks and fuel supplies shape the outlook

The market remains sensitive to developments around the Strait of Hormuz, a critical route for Middle Eastern energy exports. Any renewed military escalation could disrupt shipping and reverse the recent improvement in supply availability.

Meanwhile, recovering crude exports do not necessarily mean immediate relief for consumers. Refined fuel shipments from regional facilities remain comparatively weak, potentially delaying reductions in gasoline and diesel prices.

Official U.S. inventory data from the Energy Information Administration is also due Wednesday. The figures will help traders assess domestic supply conditions alongside the larger geopolitical uncertainty.

Earlier, we reported that Gulf states urge Washington to avoid new confrontation with Iran.

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