Oil prices rose in early Asian trading Tuesday following a report that the United States had struck Iran’s Qeshm Island, heightening concerns about an escalation of the eight-month conflict and prolonged disruptions to Middle East oil supplies.
Brent crude futures rose 48 cents, or 0.5%, to $105.25 a barrel by 0104 GMT, while U.S. West Texas Intermediate crude was up 47 cents, or 0.5%, at $96.93 a barrel. Brent had settled $8.66, or 7.63%, lower at $104.77 a barrel on Monday.
The Wall Street Journal reported the U.S. strike on Qeshm Island, citing U.S. officials. Some officials described the assaults as defensive in nature, intended to prevent Iran from having the freedom to attack commercial ships in the Strait of Hormuz.
“The report added a degree of risk premium back into the oil price. Just when markets were starting to price in a more diplomatic path, this reminder of ongoing military activity has flipped the tone,” said Tim Waterer, chief market analyst at KCM Trade.
Tehran said Monday that contacts between Iran and the U.S. to end their war are continuing, after days of Iranian talks with Qatari mediators ended with altered proposals but no breakthrough.
President Donald Trump raised doubts Monday about whether he would follow through on a threatened resumption of military strikes against Iran and said a deal with Tehran could happen.
The U.S.-Iran conflict, which began in late February, has sharply reduced traffic through the Strait of Hormuz, which previously carried about a fifth of global crude oil and natural gas supplies. The war is a leading cause of high gasoline prices weighing on voters, and Trump is under pressure to end the conflict.
Brent ended October at its highest in six months on concerns that the Middle East conflict could escalate again after Tuesday’s U.S. midterm elections.
Iranian President Masoud Pezeshkian said Supreme Leader Ayatollah Mojtaba Khamenei had granted the government certain authorities for peace talks.
Separately, the U.S. will bring together delegations from Ukraine and Russia in Abu Dhabi on Nov. 10-11 to discuss ending Moscow’s war against Ukraine, post-war security agreements and de-escalation.
