Rapidan expects an increase in oil prices.
According to Bob McNally, CEO of the Radian Energy Group, the US may resume military action against Iran in the coming days, which could lead to a sharp increase in oil prices.
He estimated the likelihood of a "resumption of hostilities" at 80%. McNally said he expects Brent and WTl crude oil futures to rise above $100 a barrel. These grades are currently trading around $96 and $89 per barrel, respectively.
"President Donald Trump is determined, as his legacy, to prevent Iran from obtaining nuclear weapons at almost any cost and to force it to give up its nuclear capabilities," McNally said. "The Iranian regime, on the other hand, is not ready to do this. And as long as this main difference is absent from the agreement, the dynamics of escalation continue."
McNally's opinion is shared by other analysts. The lame duck period before the inauguration of the new Congress may give Trump an opportunity to renew the attacks on Iran. But any renewed campaign could be limited in duration and effectiveness by pressure on US ammunition supplies.
Other analysts say the results of the midterm elections open up more opportunities for diplomacy. Norbert Rucker, head of Next Generation Economics and Research at Julius Baer, said the market was "increasingly convinced" that the end of the midterm elections could be a diplomatic way out of the current situation, rather than leading to a new escalation.