Oil prices edged higher in early Asian trading on Tuesday after a report said the United States had attacked Iran’s Qeshm Island, raising concerns about an escalation of the eight-month conflict and prolonged disruptions to Middle Eastern oil supplies.
Brent crude futures rose 48 cents, or 0.5%, to $105.25 a barrel by 01:04 GMT, while U.S. West Texas Intermediate crude gained 47 cents, or 0.5%, to $96.93 a barrel.
Brent futures settled at $104.77 a barrel on Monday, down $8.66, or 7.63%.
The Wall Street Journal, citing U.S. officials, reported that the United States had bombed Iran’s Qeshm Island. Some officials described the strikes as defensive operations aimed at preventing Iran from attacking commercial vessels in the Strait of Hormuz.
Tim Waterer, chief market analyst at KCM Trade, said the report added a degree of risk premium to oil prices. “As markets had begun to assess a more diplomatic path, the reminder of ongoing military activity has shifted the tone,” he said.
Meanwhile, Tehran said Monday that contacts between Iran and the United States aimed at ending the war were continuing, after several days of Iranian talks with Qatari mediators concluded with revised proposals but no progress.
Trump on Monday cast doubt on whether he would follow through on his threat to resume military strikes against Iran, saying that a deal with Tehran remained possible.
The U.S.-Iran conflict, which began in late February, has sharply reduced traffic through the Strait of Hormuz, which previously carried about one-fifth of the world’s crude oil and natural gas supplies.
The war with Iran is one of the main reasons behind rising gasoline prices weighing on U.S. voters, putting pressure on Trump to end the conflict.
Brent crude ended October at its highest level in six months amid concerns that the conflict in the Middle East could escalate again following Tuesday’s U.S. midterm elections.
Iranian President Masoud Pezeshkian said Supreme Leader Mojtaba Khamenei had granted the government certain powers to conduct talks aimed at ending the war.
Separately, the United States is scheduled to bring together delegations from Ukraine and Russia in Abu Dhabi on October 10 and 11 to discuss ending Moscow’s war against Kyiv, postwar security arrangements and de-escalation.
Source: Reuters
