The impact on India would be significant. Natural gas and crude oil prices have surged since the United States attacked Iran in February, and Iran responded by shutting down the Strait of Hormuz. Meanwhile, Iran’s Houthi allies in Yemen have interdicted traffic in the Bab el-Mandab Strait. A huge chunk of global gas and oil flows through these choke points.
In January, the Indian crude basket (a mix of Brent, Oman and Dubai grades) cost $61-62 per barrel. As of late October, the basket was averaging $120.2 per barrel. Gas has seen similar, even more extreme price gains.
Energy prices are the single most critical variable for India’s economy. High crude and gas prices push up inflation, and widen the trade gap. If, and admittedly this is a big if, the US agrees to a ceasefire with Iran, and the ceasefire holds, energy prices would retreat. If, and this is admittedly the imponderable, the US intensifies military initiatives against Iran, energy prices may spike even higher.
What happens on November 3 will influence American decisions vis-a-vis Iran. Some provisions in the US Constitution are of relevance. The US Congress (The House of Representatives plus the Senate) has the sole power to formally declare war, via simple majority votes in the two houses. Any military action taken by the President without formal congressional sanction, must be notified to Congress within 48 hours, and must cease within a period of 60-90 days, unless authorised to continue by Congress.
Opinion polls suggest that the Iran War is unpopular in the US because it has triggered inflation. If the Democrats win a majority in both houses, they could try to end the war by voting to stop it. While President Donald Trump might resist such a resolution, it would substantially increase pressure on him to negotiate a ceasefire. Congress also has a say in funding the war, if nothing else.
The 2026 midterm elections consist of elections to all 435 seats in the US House of Representatives (HoR) and 35 of the 100 seats in the Senate. As of now, the Republican Party holds a trifecta. Republicans hold the Presidency and Vice-Presidency, as well as majorities in the Senate (53 seats out of 100) and the House of Representatives (218 seats). If the Republican Party continues to control both houses, nothing changes.
But polling and prediction markets suggest the Democratic Party is substantially favoured to win the HoR, taking well over 218 seats. The Senate is likely to be closer but pundits, prediction markets and polling suggest the Democrats are favoured to flip the Senate as well.
The 35 Senate seats up for election include 22 held by Republicans and 13 by Democrats. If the Democratic Party wins 17 of those Senate seats (or if Democrats plus Independents allied to Democrats win 17), they take a Senate majority. If the Senate splits 50-50, the Vice-President (Republican) has a casting vote, so the Republicans would retain control.
If the Democrats do take the HoR and get a Senate majority too, they may not stop at just trying to end the Iran War. The “Dems” will turn up the heat on President Trump in other ways as well, by investigating his ties to Epstein and looking at sundry financial manoeuvres that have benefited him and his family.
There is a chance that Mr Trump may be impeached again — he’s already the only US President to have been impeached twice. The constitutional provisions for impeachment are interesting. A simple majority in the HoR (218 votes) is sufficient to impeach. However, the Senate must sit in trial and convict (if that is the right word) an impeached President by a two-thirds majority of members present in order to force him out. Assuming a full house, that’s 67 Senate votes. If the Dems have a Senate majority, they may work to get additional votes from disaffected Republicans.
If the Dems do take control of Congress, Mr Trump will probably try to “flood the Zone” by creating distractions. He would have a window of two to three months to escalate the Iran situation, even if Congress votes to stop the war. That could result in wild spikes in energy prices. Traders should be prepared for all these scenarios. So should the Reserve Bank of India and the Petroleum Planning and Analysis Cell .
The writer is a New Delhi-based independent journalist
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