Democrats Retake Both Chambers of Congress as Fears of Escalation in US-Iran Conflict Ease

Daily News

Summary:

Democrats have retaken control of both chambers of Congress; Trump says he is in no hurry to launch another strike on Iran...

Headlines

1. OPEC: Soaring Crude Transportation and Insurance Costs Are Adding to Global Inflationary Pressures

2. UAE Considers Building a Third Oil Pipeline to Bypass the Strait of Hormuz

3. Democrats Retake Control of Both Chambers of Congress

4. Trump Says He Is in No Hurry to Strike Iran Again

5. Falling Oil Prices Weigh on Inflation Expectations, Fueling Strong Demand for US Treasuries

6. Iran: US Midterm Election Results Will Not Change Washington’s Hostility

7. Eurozone Inflation Rises to 4% in October, Hitting a Three-Year High

Detailed

OPEC: Soaring Crude Transportation and Insurance Costs Are Adding to Global Inflationary Pressures

OPEC Secretary-General Haitham Al Ghais said on November 4 that international energy transportation and insurance costs have risen sharply since the beginning of 2026, now exceeding one-third of the value of the crude oil itself. Higher transportation and risk-related costs are spreading throughout the oil and energy supply chains, adding to the economic burden on both producing and consuming countries and further intensifying global inflationary pressures.

OPEC’s latest report, released on November 4, showed that crude oil shipping and insurance costs have surged since the start of 2026. Transportation costs on some routes have increased approximately 12-fold from the beginning of the year, pushing up global commodity prices and inflationary pressures.

UAE Considers Building a Third Oil Pipeline to Bypass the Strait of Hormuz

The UAE is considering building a third crude oil export pipeline to transport oil to areas beyond the Strait of Hormuz, significantly reducing its reliance on the strategic waterway, according to people familiar with the matter.

The sources said Abu Dhabi National Oil Company (ADNOC) is considering a pipeline linking the UAE’s west coast with the eastern port of Fujairah. The sources requested anonymity because the information has not been made public.

The pipeline could be open to third parties and interconnected with existing infrastructure as well as another pipeline scheduled to begin construction next year. The project would strengthen the UAE’s ability to maintain crude supplies if shipments through the Strait of Hormuz were disrupted.

The sources also said ADNOC had already briefed some Asian customers on the project. However, the plan has yet to be finalized, and details such as the route remain subject to change.

Democrats Retake Control of Both Chambers of Congress

The 2026 US midterm elections were held on November 3. As vote counts from states were reported, Democrats secured a sweeping victory, reclaiming control of the House of Representatives and winning a majority in the Senate.

The most significant outcome was the Democrats’ success in taking control of both chambers of Congress. In the Senate, Republicans previously held 53 seats, compared with 47 for Democrats. Democrats needed a net gain of at least four seats to secure a majority, but they ultimately pulled ahead by winning a series of races in Republican-controlled states.

The result in Texas was particularly significant. Democratic candidate James Talarico defeated Republican candidate Ken Paxton, becoming the first Democrat in nearly 38 years to win a US Senate election in the state.

In North Carolina, Democratic candidate Roy Cooper defeated Republican candidate Michael Whatley to win the state’s US Senate race. It was the first Senate seat to flip from Republican to Democratic control in this election cycle. Republicans had won North Carolina’s Senate races for 18 consecutive years. The loss was more than just a single seat—it marked a breach in traditionally Republican territory.

The Democrats’ sweeping victory was closely linked to public dissatisfaction with the economy and governance. An Associated Press voter survey found that, before the election, Americans were broadly disappointed with the country’s direction. Around three-quarters of respondents said they were dissatisfied with the state of the United States. Even in Republican-leaning states, a majority of voters expressed varying degrees of dissatisfaction.

In the 2024 presidential election, economic concerns and the cost of living were key factors that helped Trump win back the White House. Two years later, however, inflation and rising prices continue to weigh on ordinary American households.

The implications of the midterm elections extend beyond a simple shift in congressional seats. With Democrats back in control of both chambers, they can block parts of Trump’s legislative agenda, scrutinize the executive branch through hearings and investigations, and exert greater influence over the confirmation of senior officials.

Trump Says He Is in No Hurry to Strike Iran Again

After the Republican Party, which President Donald Trump belongs to, suffered losses in the midterm elections, Trump said he was in no hurry to launch another strike on Iran. The remarks eased market fears that the conflict could escalate after the US midterms and sent international oil prices sharply lower on Wednesday.

US Vice President JD Vance attributed the Republicans’ defeat to factors including the war with Iran and the party’s relationship with Israel.

According to The Wall Street Journal, Vance sent a message to Rezaei, secretary of Iran’s Supreme National Security Council, last week in an effort to restart peace talks. Earlier reports said the United States had told several Gulf Arab countries to prepare for the possibility of a brief but intense military operation against Iran after Tuesday’s US midterm elections.

Falling Oil Prices Weigh on Inflation Expectations, Fueling Strong Demand for US Treasuries

The sharp decline in crude oil prices fed directly into inflation expectations. The 10-year US Treasury breakeven inflation rate fell to its lowest level since August, providing fundamental support for Treasuries.

The 10-year Treasury yield fell 7 basis points to 4.89%, remaining below the 5% threshold and closing at its lowest level in two months.

Analysts said the bond market also benefited from a political dynamic: Democratic control of Congress could constrain the Trump administration’s ability to expand the fiscal deficit, reducing the supply premium embedded in longer-dated bonds.

The US Treasury’s quarterly refunding statement provided additional support. The Treasury said it would keep the auction sizes of bills and bonds unchanged over the next several quarters and removed the word “at least” from its previous wording. Markets interpreted this as leaving open the possibility of higher issuance in the future, although the near-term signal was viewed as broadly neutral.

Iran: US Midterm Election Results Will Not Change Washington’s Hostility

Following the US midterm elections, American media projections indicated that Democrats had swept both the House and the Senate, leaving President Trump’s Republican Party facing a major defeat. Trump congratulated Democrats on their victories while acknowledging that the US-Iran war had affected the Republicans’ electoral prospects.

In a statement, Iran’s Supreme Leader Mojtaba said those who believe changes in US political parties could alter Washington’s hostility toward Iran are “gravely mistaken.” He said the path to achieving absolute deterrence lies in a “stronger Iran.”

Mojtaba said those who believe making concessions to the United States could stop its hostility toward Iran are also mistaken. He said Iran’s control of the Strait of Hormuz and the destruction of US military bases in regional countries were responses to what he described as American aggression, but also represented a struggle against arrogance.

If US aggression were to happen again, Iran’s response would be broader and the scale of the war would be greater than before, he said. He added that the United States was seeking Iran’s unconditional surrender, but further attacks would provoke a wider response. He described Iran’s actions in the Strait of Hormuz as a response to US aggression.

Eurozone Inflation Rises to 4% in October, Hitting a Three-Year High

Driven by elevated energy prices, eurozone inflation rose to 4.0% in October from 3.8% in the previous month, reaching a three-year high. Inflation is expected to rise further in the coming months, potentially reinforcing market expectations that the European Central Bank will raise interest rates again in December.

Core inflation, which excludes volatile food and energy prices, remained at 2.5% in October, in line with market expectations.

Economic Calendar

15:30 (UTC+8) ECB Executive Board member Piero Cipollone speaks

18:00 (UTC+8) Eurozone September PPI, MoM

20:00 (UTC+8) Bank of England November interest rate decision

20:30 (UTC+8) Bank of England Governor Andrew Bailey holds a monetary policy press conference

20:40 (UTC+8) Swiss National Bank President Martin Schlegel speaks

21:50 (UTC+8) Cleveland Fed President Beth Hammack speaks

22:10 (UTC+8) Richmond Fed President Thomas Barkin speaks

23:30 (UTC+8) Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers appear before a Senate committee

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Democrats Retake Both Chambers of Congress as Fears of Escalation in US-Iran Conflict Ease

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