Oil Tumbles 12.5% on Peace Bets, but Ex-Biden Aide Sees Iran War Odds Above 50/50

Oil traders spent the week celebrating a war that didn't escalate. Brent crude hovered near $98 a barrel Friday, clinging to a weekly slide of more than 12.5% as markets bet the fighting with Iran was cooling off. The rally in risk appetite came fast: crude tumbled 8% on Wednesday alone after traders read a Democratic midterm sweep as a brake on the conflict.

Amos Hochstein isn't buying the calm. The former Biden energy adviser, now a managing partner at TWG Global, told CNBC the odds of renewed US-Iran war sit above 50/50 — and that the decision to strike again may have predated the election entirely, delayed only by days. "I think that there is a very good chance that we go back to conflict," he said.

The timing is awkward. US forces reportedly hit Iran's Qeshm Island the day before voters went to the polls, according to BeInCrypto, and Hochstein lays out three paths for President Donald Trump: restart the war, sign a deal he dislikes, or keep squeezing Iran economically. None of them point to quiet markets.

The tankers never stopped burning. Iran said attacks struck three more vessels in the Strait of Hormuz on Thursday, and data from the UK Maritime Trade Operations agency suggests strikes on oil-carrying ships are running near a record pace. That leaves diesel, gasoline and jet fuel buyers exposed if the shooting resumes.

Diplomacy is grinding along in parallel. Iran reportedly sent a nuclear proposal to Washington through Qatar, while the US keeps demanding Tehran abandon its nuclear capabilities. Iran wants the naval blockade lifted, sanctions eased and frozen assets released before it fully reopens Hormuz — a tall order.

Goldman Sachs had penciled in a $105 December target for Brent before the vote, citing supply disruption risk. Brent now trades below that. "Until there is a credible path to safer, cheaper transit through the Gulf, oil is likely to remain supported on dips and prone to sharp moves on any escalation headlines," said KCM chief analyst Tim Waterer. At $98, crude sits well under its four-year high above $120 — a price that says traders are still splitting the difference between a deal and a fresh round of strikes.