Oil Prices Rise as Investors Assess Iran War Developments and US Midterm Results

Global oil prices rose on Wednesday as investors assessed developments in the US-Israeli war with Iran following the US midterm elections.

Brent crude futures gained 82 cents, or 0.8%, to $104.42 per barrel at 0510 GMT. Meanwhile, US West Texas Intermediate (WTI) crude futures increased by 50 cents, or 0.5%, to $96.59 per barrel.

Both benchmarks reversed earlier losses during the session.

The gains followed a decline on Tuesday, when Brent settled at its lowest level in nearly four weeks. Traders had been assessing diplomatic efforts to end the conflicts in Iran and Ukraine.

US Midterm Elections Add to Market Uncertainty

Democrats secured majorities in both chambers of the US Congress for the remainder of President Donald Trump’s second term.

Oil investors are now watching Washington’s next steps in the conflict with Iran. Recent US military operations and renewed diplomatic efforts have added uncertainty to the market.

A US official said American forces carried out defensive strikes on Iran’s Qeshm island on Tuesday. The operation targeted surface-to-air missile systems used against US assets.

Another official described the strikes as limited. The official said they did not signal a return to major combat operations.

Trump separately told the Financial Times on Tuesday that Washington had no immediate plans for further strikes against Iran.

Diplomatic Efforts Fail to Ease Supply Concerns

Qatar has intensified mediation efforts to prevent further escalation following the US elections.

However, a senior Iranian official told Reuters on Tuesday that Tehran and Washington remained far from an agreement to end the war.

Conflicting signals from Washington have made it difficult for traders to assess the market’s direction.

Priyanka Sachdeva, head of market insights at Phillip Nova, said military operations alongside statements suggesting limited escalation had created uncertainty.

She added that some investors were taking profits and reducing speculative long positions after crude prices surged in October.

Gold Prices Rise Over 2% as Weaker US Dollar Supports Demand

Strait of Hormuz Risks Continue to Support Oil Prices

Supply concerns around the Strait of Hormuz remain a key factor for oil markets.

The strategic waterway is critical to global energy shipments. Any disruption could raise concerns about the availability of crude supplies.

An unexpected decline in US crude inventories also provided support to prices.

Market sources cited American Petroleum Institute (API) data showing that US crude inventories fell by 5.27 million barrels in the week ended October 30.

The decline contrasted with expectations of an increase of approximately 880,000 barrels, according to a Reuters survey of eight analysts.

US Fuel Inventories Show Mixed Trends

US gasoline inventories increased by 1.43 million barrels during the week.

However, distillate stocks, which include diesel and heating oil, declined by 1.19 million barrels.

Haitong Futures said diesel inventories remained tight despite the larger-than-expected increase in gasoline stocks.

The firm added that the overall inventory figures supported oil prices.

Official US Inventory Data Awaited

Investors are now awaiting the US Energy Information Administration’s (EIA) weekly petroleum inventory report.

The agency is scheduled to release its official figures at 1530 GMT on Wednesday.

The report is expected to provide further insight into supply and demand conditions in the world’s largest oil-consuming economy.