Oil falls below $100 as markets bet on possible Iran war de-escalation after U.S. midterm shift
Oil prices fell below $100 a barrel after Brent and West Texas Intermediate both dropped more than 8% in the previous session, as traders reacted to the Republican Party losing control of Congress in the U.S. midterm elections. The move reflected a growing market view that the political shift in Washington could increase the chances of a negotiated end to the war involving the United States, Israel and Iran. Brent closed at $94.62 a barrel and WTI at $88.12, both their lowest levels since 31 August.
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The decline came after the Republican defeat, which left President Donald Trump facing a Congress now controlled by Democrats. According to the supplied report, investors interpreted the result as raising the odds that Trump would seek a deal rather than escalate the conflict further. The report also said two sources close to Gulf governments believed the weakened political position of the president made a large-scale attack on Iran less likely.
The market reaction matters because oil prices are closely tied to expectations about supply disruption in the Middle East, where the war has already become a major geopolitical risk. The report said analysts still warned that the conflict could escalate again, even as prices fell on hopes of de-escalation. Trump told the Financial Times on Tuesday that the United States had no immediate plans to attack Iran, and later acknowledged that the war had influenced the election result.
The price move also highlights how quickly energy markets can respond to political change in Washington when the Middle East is involved. A lower probability of escalation can ease pressure on global crude benchmarks, but the report suggests traders remain alert to the possibility of a reversal if the conflict intensifies again. The fall below $100 is therefore being read less as a settled trend than as a reassessment of risk after the midterm result.
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What remains unclear is whether the market's expectation of a negotiated exit will be borne out by events in the coming days. The report does not say that any agreement has been reached, only that investors are pricing in a higher chance of one. It is also not yet clear whether the political shift in Congress will materially change the administration's approach to the war or whether prices will remain under pressure if tensions rise again.
For now, the drop in Brent and WTI shows that traders see the election result as a meaningful signal for the conflict's next phase. The immediate question is whether that signal leads to diplomacy, renewed military pressure, or another sharp swing in energy markets.
Vice President JD Vance has publicly blamed the Iran war for the Republican Party's defeat in the midterm elections, deepening a visible split inside Donald Trump's political circle. Democrats won control of both chambers of Congress, a result that immediately shifted the balance of power in Washington. The comments came as Trump defended the decision to launch the war and said he would do it again.
Vance said in a lengthy post on X that the reason Republicans lost was the war, adding that Trump had said the same thing the previous night. He argued that supporters should be honest about the political cost and suggested the conflict may have helped drive away some voters who backed Trump in 2024. Senator Ted Cruz, who has long supported a hard line on Iran, also criticised the war, saying it should have been brief, decisive and over.
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The criticism matters because it is not coming only from opposition lawmakers, but from two prominent Republican figures with different roles in the party's foreign policy debate. Vance is widely seen as a possible 2028 presidential contender and a leading figure in the MAGA movement, while Cruz has been one of the most vocal Iran hawks in Congress. Their remarks suggest the war is becoming a political liability as Democrats prepare to use their new congressional majority to try to rein it in.
Trump, however, has not backed away from the decision. He told reporters that Vance's assessment was largely true, but also blamed higher fuel prices linked to the war for turning voters against Republicans. In comments reported on Wednesday, he said he had no regrets and would make the same choice again.
That stance leaves the administration publicly divided over a conflict that has already become central to the post-election debate. The dispute also reflects the wider pressure created by the war's cost and duration. Vance said ending the conflict and changing Washington's relationship with Israel were among the top concerns raised by some Trump voters before the election, according to an unnamed pollster he cited.
Cruz, meanwhile, said Washington should never give the Iranian leadership billions of dollars, apparently referring to a June memorandum of understanding that included a proposed $300bn fund for post-war reconstruction as part of broader peace talks. That June agreement had briefly provided for a ceasefire, but it quickly fell apart, according to the report. The collapse of that arrangement helps explain why the war remains politically and diplomatically unresolved, even as it shapes domestic politics in the United States.
It also shows how the conflict has moved beyond the battlefield and into the centre of congressional debate, where Democrats now have the numbers to press for oversight or restrictions. What remains unclear is how far the new congressional majority will go in trying to constrain the war, and whether Trump will adjust his approach in response to the election result. It is also not yet clear whether Vance's criticism marks a lasting break in Republican messaging or a short-term reaction to the defeat.
For now, the war has become both a foreign policy issue and a test of political loyalty inside the president's own camp.
US Vice-President JD Vance has publicly blamed the Iran war for his party's midterm defeat, in a sharp break from the usual discipline expected inside a White House after an election loss. In a statement posted on X on Wednesday, he said the reason Republicans lost was the war, adding that President Donald Trump had said the same thing the night before. The comments came after Democrats won control of both chambers of Congress, a result that has immediately reshaped the political balance in Washington.
Trump had already acknowledged in interviews late on Tuesday and on Wednesday that the war was a factor in the Republican defeat. Vance went further, saying the conflict was the reason the party lost and arguing that supporters should be honest about the political cost. He said that if people wanted to argue the war was worth losing the Senate for the next six years, they should do so openly.
The vice-president's remarks were delivered in a carefully worded statement of about 600 words, but they were still widely read as a public challenge to the president's handling of the issue. The exchange matters because it exposes a rare visible split at the top of the administration over a major foreign policy decision. Vance has publicly backed the war since the United States and Israel attacked Tehran in February, but the report says he has privately expressed opposition in meetings with administration officials.
Until now, those disagreements had remained out of public view. The timing is also significant because the comments came only hours after Republicans suffered a bruising election defeat, making the war an immediate political liability as well as a foreign policy issue. The remarks also carry wider implications for the administration's internal politics and for the next presidential race.
The statement was widely interpreted in Washington as an effort by Vance to distance himself from Trump ahead of a possible 2028 White House run. That interpretation is strengthened by the fact that Trump is known to demand loyalty from senior advisers, yet in this case he agreed with Vance that the midterms were largely decided by the war. Trump also said he would do it again if faced with the same choices, suggesting he is not retreating from the decision despite the electoral cost.
The war in Iran has now become part of the domestic political debate in the United States, linking military action abroad with control of Congress at home. According to the report, Republicans lost both the House of Representatives and the Senate, a result that will limit Trump's power on domestic legislation. It may also affect how the administration approaches foreign policy, because the election result has turned the war into a test of political judgment as well as strategy.
For Vance, the comments mark one of the clearest public signs yet that he is willing to separate his position from Trump's on a signature issue. What remains unclear is how far this public disagreement will go and whether it will affect the administration's handling of the war in the coming weeks. It is also not yet clear whether Vance's remarks will become a lasting feature of the post-election debate or a one-off response to the defeat.
