FROM IRAN TO TRADE: HOW THE US MIDTERMS IMPACT THE REST OF THE WORLD
LONDON, Nov 4 (Reuters) – The US Democrats’ “blue wave” of midterm election victories is already causing ripples across the rest of the world, where trade partners, strategic allies and enemies all see implications in the result.
IRAN AND ISRAEL
It is not immediately clear how US President Donald Trump’s loss of control over Congress will shape the course of his country’s eight-month-old conflict with Iran. Voters have shown they are weary of the conflict, which many blame for painfully higher fuel prices. Some Gulf governments now believe Trump has more reason than ever to seek a peace deal and that another full-scale assault on Iran is less likely after the midterms, two sources familiar with Gulf government thinking told Reuters.
But Trump’s electoral drubbing may also embolden Iran.
“If Tehran recognises that Trump needs a deal, but not just any deal, a genuine opportunity could emerge to end the war,” said Ebtesam al-Ketbi of the Emirates Policy Center. However, reading the vote as weakness could instead invite “a new military escalation”, she added.
NOVEMBER 05, 2026 – REUTERS
For Israel, a Democrat-controlled House and Senate may intensify congressional scrutiny of Israel’s military operations in Iran as well as in Gaza and Lebanon, while threatening long-standing US support for Israel through military aid and weapons sales.
Rivals seeking to unseat Prime Minister Benjamin Netanyahu seized on the Democrats’ wins to lambaste him for a loss of bipartisan American support under his watch, as they seek to forge a coalition following an inconclusive Israeli election last week.
FUEL PUMP PRICES
The Iran war has choked supplies of crude oil and liquefied natural gas from the Gulf, driving up the cost of crude oil and prices at fuel pumps around the world.
The energy market wagered on Wednesday that the elections could breathe more life into US-Iran peace talks. Oil dropped for a third day, but tight stock levels prevented a larger selloff, analysts said.
“The market increasingly appears to be betting that President Trump wants to put the Middle East war behind him,” said Saxo Bank analyst Ole Hansen.
UKRAINE
Trump has largely halted direct US financial and military aid to Ukraine as it fights a Russian invasion, despite broad support from Democratic and Republican lawmakers. He has angered members of Congress, including many Republicans, by lifting sanctions on Russian diesel and waiving sanctions on Russian energy only weeks after signing them into law.
Control of both chambers of Congress will allow Democrats to propose new aid to Ukraine. If they get enough backing from Republicans and secure a two-thirds majority, a new aid package would survive a Trump veto. However, any boost to US aid is unlikely to come quickly, and it will not address Ukraine’s most pressing need — a deficit of US-made Patriot air defence interceptors to protect its energy infrastructure and cities this winter.
Democrats could also target other Trump policies.
