Oil prices sink on US-Iran war hope ahead of midterms

An aerial view shows ships anchored off the coast of Khasab in Oman’s Musandam Governorate, near the Strait of Hormuz. Oil prices sank more than four per cent Monday as a report that Donald Trump wanted to negotiate with Iran raised hope of ending the Middle East war, as the US president prepared for pivotal midterm elections. — AFP pic

First Published: Monday, 02 Nov 2026 8:20 PM MYT

LONDON, Nov 2 — Oil prices sank more than four per cent Monday as a report that Donald Trump wanted to negotiate with Iran raised hope of ending the Middle East war, as the US president prepared for pivotal midterm elections.

Weighing on crude futures was also Iran saying it is ready to reopen the Strait of Hormuz within two days should the United States agree to ending the war on all fronts, among other conditions related to the conflict.

The Axios news outlet reported that US Vice President JD Vance had sent a letter to Iranian national security chief Mohsen Rezaei about possible new talks, marking the highest-level move in months.

Share prices of energy majors dropped as gas price also fell, while many other sectors were boosted by the cooling fuel costs.

“We believe the (Trump) signals may be tactical ahead of tomorrow’s US midterm elections,” noted Arne Lohmann Rasmussen, chief analyst at Global Risk Management.

“Meanwhile, attacks on shipping in the Strait of Hormuz continue (and) we maintain our higher-for-longer outlook for energy prices.”

All eyes are on Tuesday’s midterms, with Democrats expecting to win at least partial control of Congress that would impose political constraints on Trump for the first time in two years.

The loss of total Republican dominance would push the president into unfamiliar and uncomfortable territory: a lame-duck period beset with high inflation at home, the sputtering war against Iran and hostile Democratic investigations into his activities in Washington.

“Investors are bracing for a fresh round of turbulence ahead of US midterm election fireworks while they assess the extent that companies are burning through cash to keep the AI bonfires burning,” said Susannah Streeter, chief investment strategist at Wealth Club.

Technology firms’ share prices retreated further after Friday’s selloff, as more poorly received earnings from US titans fanned deepening concerns about the investment boom for artificial intelligence.

Results updates from Apple, Advanced Micro Devices and software titan Palantir will be closely watched this week.

The share price of Japanese chipmaker Kioxia plunged nearly 16 per cent Monday after the company gave a cautious outlook that fell short of forecasts.

The company has plunged about 70 per cent from its record high set in June, although it is still up more than 200 per cent since the start of the year.

There were tech gains elsewhere, however, with Taiwan’s TSMC adding almost two per cent and SK hynix gaining 3.8 per cent.

Bitcoin and other cryptocurrencies were steadier after Friday’s retreat triggered by the world’s biggest crypto exchange Binance suffering the sector’s largest hack, with more than US$6 billion (RM24.4 billion) stolen.

On the corporate front, shares in Alstom dropped over 25 per cent after the maker of France’s TGV trains said it had uncovered new production issues with its new Coradia Max regional trains.

That forced it to lower its profit targets for the second time in six months. Its market value is now just €5.3 billion, compared with €12 billion at the beginning of the year. — AFP