Brent crude fell to around $101.7 a barrel on Wednesday, recording losses for a third consecutive session and approaching its lowest level in three weeks.

Despite the downward trend, analysts expect market volatility to remain elevated as investors assess developments in US policy towards Iran following the conclusion of the US midterm elections.

The elections resulted in the Democrats gaining control of both chambers of Congress, a development that could limit President Donald Trump’s room for manoeuvre in advancing his legislative agenda.

Qatar launches new diplomatic initiatives

Meanwhile, Qatar is stepping up its mediation efforts to bring Washington and Tehran closer together. A spokesperson for the country’s Foreign Ministry said that both the US and Iran were considering new proposals put forward by mediators, with the aim of bridging the differences between the two sides.

However, the picture remains complex. The head of Iran’s national security agency said in a social media post that Washington’s response to the proposals had been unsatisfactory, leaving questions open about the prospects of reaching an agreement.

No immediate plans for further strikes, Trump says

For his part, Donald Trump told the Financial Times on Tuesday that the US was not planning an immediate new attack on Iran. His comments came after American strikes carried out earlier this week, which Washington described as defensive.

The remarks offer some scope for de-escalation, but do not dispel uncertainty over the course of the conflict. For the oil market, the decisive factor remains whether diplomatic initiatives will lead to an agreement or whether there will be a further military escalation.