Global crude oil prices moved higher on Wednesday, November 4, 2026, as traders assessed the uncertain outlook for the Iran conflict and its potential impact on energy supplies. Market sentiment remained volatile following major gains by Democrats in the US midterm elections, which could reshape the political environment for President Donald Trump during the remainder of his second term.
Brent crude futures increased by 82 cents, or 0.8%, to $104.42 per barrel at 05:10 GMT. US West Texas Intermediate (WTI) crude gained 50 cents, or 0.5%, to $96.59 per barrel, reversing earlier losses.
The recovery followed a previous session in which Brent settled at its lowest level in nearly four weeks. Investors had been weighing diplomatic efforts to end the wars in Ukraine and Iran against the possibility of further military escalation.
US Election Results Add to Market Uncertainty
The 2026 US midterm elections became another factor influencing investor sentiment. According to the supplied Reuters report, Democrats secured majorities in both houses of Congress, potentially changing the political balance for the remainder of Trump's presidency.
Oil traders are also watching how Washington responds to developments in the conflict with Iran. Conflicting statements from the US administration have made it difficult for markets to establish a clear direction.
Priyanka Sachdeva, head of market insights at Phillip Nova, said uncertainty surrounding the administration's position was limiting traders' confidence. She also suggested that some investors could take profits and reduce speculative positions following the sharp rise in oil prices during October.
However, the underlying risks to supply have not disappeared, particularly around the Strait of Hormuz, a critical route for international oil shipments.
US Strikes on Iran Keep Geopolitical Risks in Focus
A US official said American forces had carried out what were described as defensive strikes on Iran's Qeshm island, targeting surface-to-air missile systems allegedly used against US assets.
Another US official characterised the strikes as limited and said they did not indicate a return to major combat operations.
President Donald Trump reportedly told the Financial Times on November 3 that the United States had no immediate plans to launch another strike against Iran. Meanwhile, a senior Iranian official told Reuters that Tehran and Washington remained far from reaching an agreement to end the conflict.
Qatar has stepped up diplomatic mediation efforts in an attempt to prevent further escalation after the US elections. Markets are watching for signs of progress, although a negotiated settlement remains uncertain.
US Crude Inventories Fall More Than Expected
Supply-side data also provided support to oil prices. Crude inventories in the United States reportedly declined by 5.27 million barrels during the week ended October 30, according to figures from the American Petroleum Institute (API) cited by market sources.
The decline was significantly different from expectations. Eight analysts surveyed by Reuters had forecast an average increase of approximately 880,000 barrels.
Other inventory movements included:
Gasoline: Stocks increased by 1.43 million barrels.
Distillates: Inventories declined by 1.19 million barrels.
Crude oil: Stocks fell by 5.27 million barrels.
Haitong Futures said tight diesel inventories, together with the larger-than-expected increase in gasoline stocks, made the overall inventory picture broadly supportive of crude prices.
The market was also awaiting official figures from the US Energy Information Administration (EIA), scheduled for release later on Wednesday.
Strait of Hormuz Remains a Critical Risk for Global Oil Supply
The Strait of Hormuz continues to be a major concern for energy markets because of its importance to international oil transportation. Any disruption to shipping through this route could affect supplies and increase pressure on crude prices.
Even as diplomatic efforts continue, uncertainty surrounding the Iran conflict is preventing traders from assuming that supply risks have eased. The combination of geopolitical tensions, inventory changes and shifting political developments is contributing to volatility in energy markets.
For businesses exposed to international energy prices, exchange-rate movements and cross-border trade, monitoring geopolitical developments is important for financial planning. Shunyatax's strategic advisory services can support businesses in evaluating broader financial and market-related risks.
What Could Influence Oil Prices Next?
In the near term, traders are expected to focus on three major developments: progress in US-Iran diplomatic discussions, the security situation around the Strait of Hormuz and the official US petroleum inventory report.
A credible diplomatic breakthrough could ease concerns about supply disruptions and put downward pressure on crude prices. Conversely, renewed military escalation or restrictions on shipping could push prices higher.
The EIA's inventory figures will provide another important indicator of US supply conditions. Until there is greater clarity on the geopolitical situation, oil markets are likely to remain sensitive to political announcements and changes in supply expectations.