Crude oil rose above $101 a barrel on Wednesday, rebounding after two straight sessions of losses as traders weighed the risk of renewed military escalation between the US and Iran. Prices were supported by reports that President Donald Trump was considering a short, intensive military campaign following next week’s US midterm elections, though no final decision had been made. Washington was also said to have urged Persian Gulf allies to prepare for potential strikes and to have deployed additional military assets to the region.
Political uncertainty in Israel further heightened regional risk sentiment, with Prime Minister Benjamin Netanyahu and opposition leader Gadi Eisenkot locked in a tight race that could leave the country without a clear governing majority. At the same time, ongoing Houthi attacks on Saudi energy infrastructure underscored the persistent threat to regional oil supplies. Still, gains were capped by reports that Qatari mediators had presented Iran with a new draft agreement, raising hopes of a possible diplomatic breakthrough and tempering fears of a deeper conflict.