Oil Prices Rebound Sharply After Midweek Selloff Driven by U.S. Midterm Results and Iran War Uncertainties

On November 5, 2026, global crude oil benchmarks experienced a sharp price recovery, reversing a substantial portion of the steep losses recorded earlier in the week following the United States midterm elections. Brent crude advanced by $3.39, or 3.58 percent, to reach $98.01 per barrel by early afternoon, while West Texas Intermediate crude increased by $2.21, or 2.51 percent, to trade at $90.33 per barrel. Additional market reports noted Brent trading at $96.71 and WTI at $89.42 per barrel later in the session. This rebound followed Wednesday's drastic selloff, during which Brent plunged $8.98, or 8.7 percent, to settle at $94.62, and WTI shed $7.97, or 8.3 percent, to close at $88.12 per barrel, marking the lowest settlement levels for both benchmarks since August 31.

The primary catalyst for the midweek market collapse was the Democratic Party sweeping both chambers of the U.S. Congress in Tuesday's midterm elections. Energy futures traders widely interpreted the political shift as a development that would pressure President Donald Trump to bring a swift diplomatic end to the ongoing eight-month war with Iran. Driven by aggressive position liquidation and heightened expectations of an impending peace settlement, Brent crude prices plunged nearly 18 percent over the course of the week. However, by Thursday, market participants began aggressively repurchasing positions as technical indicators signaled oversold conditions and traders reconsidered the actual likelihood of a rapid diplomatic breakthrough.

Geopolitical risk assessments contributed directly to Thursday's price surge. Eurasia Group revised its market evaluation, reducing the estimated probability of a negotiated peace agreement between Washington and Tehran from 20 percent down to 10 percent, while elevating the likelihood of renewed U.S. military strikes to 60 percent. Physical threats to maritime trade also persisted across key Middle Eastern waterways. Reuters reported at least five security incidents involving commercial vessels in the Persian Gulf since Sunday, and Iranian authorities reported that four oil tankers had been destroyed by mines near the Strait of Hormuz. Although Iran is actively reviewing diplomatic proposals transmitted via regional mediators, significant policy divisions between the U.S. and Iran remain unresolved.

From a technical perspective, market analysts from FX Empire highlighted critical chart levels governing future crude movements. Analysts noted that WTI crude needs a monthly close above the $106 per barrel resistance line to break out of its long-term descending channel, which could potentially clear a path toward $150 per barrel, with intermediate resistance between $125 and $130. Conversely, a drop below $80 could push WTI down toward $55. For Brent crude, $120 remains the primary resistance barrier, while a fall below its 50-day moving average of $107 could test its 200-day moving average near $98.50, though strong underlying support remains intact around $100 per barrel.

The global energy landscape has faced intense volatility during the eight-month war between the United States and Iran, which severely disrupted critical shipping corridors in the Middle East. Transporting crude through the Strait of Hormuz has become increasingly treacherous and costly, with logistics expenses tripling for oil service companies due to heightened security threats, sea mines, and military engagements such as reported U.S. strikes on Qeshm Island. Although physical crude exports from the Persian Gulf have gradually recovered toward pre-war levels, high geopolitical risk premiums remain embedded in global pricing.

The wider energy market faces compounded structural challenges alongside the crude volatility. The International Energy Agency has warned that the global gas crunch could endure well into 2027, driven by high demand from artificial intelligence infrastructure and ongoing conflict disruptions. Furthermore, political realignments in the United States following Democratic gains in Congress have altered investor expectations regarding military commitments and renewable energy transition policies. Throughout the war, WTI crude has consolidated within a broad range of $69 to $120 per barrel, reflecting constant recalibration between diplomatic optimism and supply disruption fears.