The U.S. is likely to resume military action against Iran in the coming days, a move that could send oil prices sharply higher, according to Bob McNally, CEO of geopolitical and energy analysis firm Rapidan Energy Group.
Speaking to CNBC's "Squawk Box Asia," McNally put the odds of "a resumption of military fighting" at 80% as the U.S. midterm elections recede.
McNally said he expects both Brent and West Texas Intermediate crude futures to rise above $100 a barrel. The benchmarks are currently trading at about $100 and $91, respectively.
Oil prices had spiked above the $100 mark ahead of the midterm elections as investors weighed uncertainty surrounding the Iran conflict and the risk of further U.S. military actions.
President Donald Trump had previously said he would not launch new attacks on Iran before the elections, though The Wall Street Journal revealed that Washington had carried out limited strikes, according to U.S. officials.
"President Donald Trump is determined, as a legacy item, almost at all costs, to prevent Iran from getting a nuclear weapon, having them give up their nuclear capabilities," McNally said.
"The Iranian regime, on the other hand, is not willing to do it. And as long as that core difference in that deal space is absent, the escalation dynamic remains in place," he added.
McNally's view is shared by other analysts, including Lombard Odier's chief economist Samy Chaar and head of investment strategy Luca Bindelli.
In a Nov.4 note, they said the "lame duck" period before the new Congress is sworn in could give Trump a window to resume strikes against Iran. Any renewed campaign, however, could be constrained in duration and effectiveness by pressure on U.S. munitions supplies.
Other analysts see the midterm results as creating more room for diplomacy.
Norbert Rücker, head of economics and next generation research at Julius Baer said the market had become "more convinced" that the end of the midterms could provide a diplomatic off-ramp rather than lead to renewed escalation.
That possibility increased with Iran reportedly sending the U.S. a nuclear proposal through Qatar, Reuters reported Friday, citing a senior Iranian official.
But the proposal would be discussed only after Washington meets what Tehran described as "seven demands," including an end to U.S. "acts of aggression," the naval blockade of Iranian ports and what it called economic warfare, as well as the release of Iranian assets.
In return, Iran will allow ships to proceed freely through the Strait of Hormuz.
The official also told Reuters that Washington was reviewing the proposal but declined to provide further details.
Political fallout grows
Separately, Iran's speaker of parliament Mohammad Bagher Ghalibaf took aim at U.S. Vice President JD Vance after Vance blamed the war with Iran for Republicans' midterm losses.
In a post on X, Ghalibaf described Vance's reaction as "losing gambler energy" and said that Vance "can't walk away from the table." He also accused the Trump administration of preparing the next phase of conflict.
"Skip the TED talk. Why not say this to your boss?" Ghalibaf wrote, in an apparent reference to Trump.
Vance posted on Nov. 4 that "the reason we lost is the war. The president himself said so last night," adding that a pollster he consulted found that ending the war was the top issue cited by former Trump voters who had switched to Democrats. Cost of living and inflation were also among these concerns.
Vance has at times pushed for diplomacy with Tehran. The Wall Street Journal reported last week that he had reached out to an Iranian hard-liner in an effort to revive peace talks.
The war has also contributed to higher global energy costs, which have fed into broader concerns over inflation and the cost of living.