Oil Prices Rise as Markets Weigh U.S. Election Impact

Oil prices recovered on Thursday following a session where benchmarks plunged over 8%. Brent crude futures rose nearly US$3 to approximately US$97 per barrel, while West Texas Intermediate crude climbed to nearly US$90 per barrel. The rebound comes as investors evaluate whether Republican losses in the U.S. midterm elections will push Donald Trump toward diplomacy or lead the White House to use executive powers to escalate the ongoing U.S.-Israeli war with Iran.

Risk analysis from the Eurasia Group suggests a 60% probability of renewed U.S. strikes on Iran, a 30% chance of a continued standoff, and only a 10% likelihood of a diplomatic deal. These market tensions coincide with reports from the Islamic Revolutionary Guard Corps that two oil tankers and a tugboat caught fire after using unauthorized routes through the Strait of Hormuz.

In response to the instability, Iranian Foreign Minister Abbas Araqchi held calls with counterparts in Saudi Arabia and Qatar to discuss regional stability.