Oil could top $100 if U.S.-Iran fighting resumes, Rapidan's McNally says

The U.S. is likely to resume military action against Iran in the coming days, a step that could push crude prices above $100 a barrel, Rapidan Energy Group CEO Bob McNally told CNBC's "Squawk Box Asia."

McNally put the odds of "a resumption of military fighting" at 80% now that the U.S. midterm elections are receding, and said he expects both Brent and West Texas Intermediate futures to trade above $100. The benchmarks are currently at about $100 and $91 respectively.

Oil had already climbed past the $100 mark ahead of the vote as investors weighed uncertainty over the Iran conflict. President Donald Trump had said he would not launch new attacks on Iran before the elections, though The Wall Street Journal reported that Washington had carried out limited strikes, according to U.S. officials.

A nuclear impasse

McNally said Trump is "determined, as a legacy item, almost at all costs, to prevent Iran from getting a nuclear weapon." Tehran, he added, is "not willing to do it," and while that gap remains, "the escalation dynamic remains in place."

Others share that reading. In a Nov. 4 note, Lombard Odier chief economist Samy Chaar and head of investment strategy Luca Bindelli said the "lame duck" period before the new Congress is sworn in could give Trump a window to resume strikes — though pressure on U.S. munitions supplies could limit any campaign's duration and effectiveness.

Not everyone expects escalation. 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. Reuters reported Friday, citing a senior Iranian official, that Iran had sent the U.S. a nuclear proposal through Qatar. The proposal would be discussed only after Washington met "seven demands," including an end to what Tehran calls acts of aggression, the naval blockade of Iranian ports and economic warfare, and the release of Iranian assets. In return, Iran would let ships pass freely through the Strait of Hormuz. Washington is reviewing the proposal, the official said.

Political fallout

Iran's parliament speaker, Mohammad Bagher Ghalibaf, criticised 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 accused the Trump administration of preparing the next phase of conflict.

Vance wrote on Nov. 4 that "the reason we lost is the war," citing a pollster who found ending the war was the top issue for former Trump voters who had switched to Democrats. He 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 to try to revive peace talks.

The war has also contributed to higher global energy costs, adding to inflation and cost-of-living concerns.

Source: CNBC.