The US midterms impact on Pakistan showed up first at the petrol pump. After Democrats won control of both the House and the Senate on Tuesday, Brent crude fell 8.6% on Wednesday to $94.66 a barrel, as traders bet that a divided Washington could bring the Iran war to an end sooner. A day later, Pakistanis are paying Rs362 a litre for petrol, after a third straight daily cut. For an economy that imports most of its fuel, the result in Washington matters more than most foreign elections.
Update, 6 Nov 2026, 9:05 am PKT: Part of the oil drop has reversed. Brent rose for a second day to $99.86 a barrel (up $1.57) by 0222 GMT on Friday, and WTI rose to $91.62, after a run of tanker attacks in the Gulf and the Strait of Hormuz, Reuters reported. Brent is still on track for a weekly fall of about 12%. ANZ’s Daniel Hynes said Hormuz flows remain under 60% of capacity. Iran says the US naval blockade must end, sanctions be eased and frozen funds released before it reopens the strait. For Pakistan, the next fuel price change now depends on whether oil holds near $100. Meanwhile, the government’s fuel subsidy has paid out Rs28.6bn.
The short version
- Democrats won control of both houses of the US Congress, according to the Associated Press tally reported by Al Jazeera.
- Brent fell $8.94, or 8.6%, to $94.66 a barrel on Wednesday, its lowest level since 4 September.
- Petrol in Pakistan is Rs362 a litre and diesel Rs387.81 from 5 November, after three cuts in three days.
- Cheaper oil eases Pakistan’s import bill, inflation and pressure on the rupee, but analysts warn the war could still escalate before it ends.
What happened
Democrats have won 228 House seats and lead in 34 more, and hold 54 Senate seats with a lead in one more, Al Jazeera reported on 4 November, citing the AP. It is the first time in 20 years that a Republican president has lost both chambers. President Donald Trump told Fox News, “I think it’s the gasoline price,” when asked about the result, while Vice President JD Vance wrote on X that the war was the reason for the losses, according to OilPrice.com. Trump also told the Financial Times that Washington had no immediate plans to strike Iran.
Oil reacted at once. Brent, which traded near $118 on Friday, dropped to $94.66 by 1:06 pm New York time on Wednesday, and US crude (WTI) fell 8.3% to $88.08. Iran’s Supreme Leader Mojtaba Khamenei said in a written statement that US hostility would continue whichever party held power. US stocks rallied, with the Dow up 1,569 points, or 3.03%, its best day of 2026, Yahoo Finance reported.
Brent has lost about a fifth of its price since Friday
Brent crude, US dollars a barrel
Why it matters
Pakistan’s fuel prices now move almost daily with the oil market. The government has set prices every day since 17 July because of the US-Iran hostilities, and OGRA revises them in line with international prices, Dawn reported. The latest notification cut petrol by Rs7.06 to Rs362 and diesel by Rs3.71 to Rs387.81, on top of cuts on Monday and Tuesday. Petrol peaked at Rs458.41 and diesel at Rs520.35 on 3 April. We looked last week at the Iran war impact on Pakistan around the midterms; the market’s first verdict on the result has been cheaper oil.
Petrol is Rs96 below its April peak, but far above pre-war levels
Pakistan petrol price, rupees per litre
The knock-on effects
First order: a smaller oil bill
Petroleum made up 22.2% of Pakistan’s imports in July–March of the last fiscal year, Finance Minister Muhammad Aurangzeb told the National Assembly, Profit reported. In April, Prime Minister Shehbaz Sharif said the weekly oil import bill had risen to $800 million, from about $300 million before the conflict (Profit). Every sustained fall in Brent shrinks that bill and eases demand for dollars.
Second order: transport, inflation and the rupee
Lower diesel prices feed into freight, farm and power costs, which can slow inflation and ease pressure on interest rates. Investors have already moved: the KSE-100 jumped 3,995 points on Wednesday as midterm results and US-Iran talks brought buyers back. The government still collects about Rs114 a litre on petrol and Rs100 on diesel in taxes and duties, so the levy, not only the oil price, shapes what drivers pay.
Third order: a policy shift that is not yet certain
BOK Financial’s Dennis Kissler said Democratic control of Congress could tighten US military spending in the region and bring a peace deal sooner, while Enverus’ Carl Larry warned an escalation could come before a resolution (OilPrice.com). Gulf exports were still about three-quarters of pre-war levels in October, according to Vortexa. Pakistan’s relief therefore depends on talks, not on the election alone, as our look at how Iran peace talks moved oil prices on Monday also showed.
Who could benefit
- Transporters and logistics firms: diesel is down three days running.
- Airlines, power producers and industry: lower fuel input costs if Brent stays below $100.
- The State Bank and the rupee: a smaller import bill reduces dollar demand.
- Consumers: petrol is now about Rs96 a litre below its April peak.
Who may face pressure
- Refiners and oil marketers: falling prices can mean inventory losses on stocks bought at higher prices.
- Exploration companies: lower oil prices reduce the value of their output.
- The budget: if the government restores levies as prices fall, consumer relief would be smaller.
What to watch
- Daily OGRA notifications: each evening’s price for the next day; prices are unchanged on Saturdays and Sundays.
- US-Iran talks: any confirmed progress on the nuclear programme or frozen assets.
- New Congress: the newly elected Congress takes office in January; watch for moves on war powers and military spending.
- Pump prices: our petrol price Pakistan tracker is updated as cuts land.
Sources
- Al Jazeera, Democrats win control of House and Senate: Key US midterms takeaways, 4 Nov 2026
- OilPrice.com, Oil Crashes 9% as Trump and Vance Blame Iran War for Midterm Rout, 4 Nov 2026
- Yahoo Finance, Stock market today: Dow surges 1,500 points in best day of 2026, 4 Nov 2026
- Dawn, Petrol price dropped by Rs7.06 per litre, high-speed diesel by Rs3.71, 4 Nov 2026
- Aaj News, Petrol, diesel prices cut for third consecutive day, 4 Nov 2026
- Profit, Pakistan’s oil bill jumps to $800 million a week as Middle East conflict hits growth, PM says, 30 Apr 2026
- Profit, Petroleum imports account for 22.2% of Pakistan’s import bill, says Aurangzeb, 16 May 2026
- Reuters (via Investing.com), Oil set for sharp weekly drop but Middle East supply concerns provide floor, 6 Nov 2026
- Gulf News, Trump weighs Iran strikes or deal after midterm loss as Vance urges agreement, Qatar mediates, 5 Nov 2026
This is analysis, not investment advice. Figures are as of 5 November 2026. Knock-On is not affiliated with any political party.
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