The U.S. and Iran are careening toward renewed war despite growing hopes this week that the Democrats' decisive midterm election victory will bring the conflict to an end, analysts say.
Crude oil prices fell more than 16% over the last five trading days after Vice President JD Vance publicly blamed the Republicans' stinging loss on the war. Vance's remarks raised questions about whether there is still support within the administration to continue the conflict with Iran.
The Democrats plan to use their comfortable majorities in both chambers of Congress to pass a war powers resolution that demands President Donald Trump end the war. But tensions in the Middle East have not eased since the election, and the Democrats aren't sworn in until January, the analysts say.
"Throughout the week, we were struck by the divergence between deepening escalation concerns in the Gulf and the headline driven off-ramp optimism of market participants thousands of miles away," Helima Croft, head of global commodity strategy at RBC Capital Markets, told investors in a note Friday.
Several oil tankers have come under attack near Oman since the election, killing one seafarer, according to maritime security agencies. Iran's Houthi allies in Yemen continue to fire missiles at neighboring Saudi Arabia.