Oil prices rebound on reports of US strikes on Iran

November 03, 2026 (MLN): Oil prices climbed in early Asian trading on Tuesday after reports emerged that the United States had carried out strikes on Iran’s Qeshm Island, renewing fears of an escalation in the ongoing conflict and further disruptions to regional energy supplies.

West Texas Intermediate (WTI) crude futures is down by $0.48, or %0.50, to $96.64 per barrel by [09:50 am] PST.

The Wall Street Journal, citing US officials, reported that American forces had targeted the island, with some officials describing the operation as defensive and aimed at restricting Iran's ability to attack commercial vessels transiting the Strait of Hormuz.

The development restored a geopolitical risk premium in oil markets, reversing some of the optimism generated by expectations of a possible diplomatic resolution between Washington and Tehran, according to CNBC.

Despite the latest military developments, diplomatic efforts remain underway. Tehran said on Monday that communications with Washington aimed at ending the conflict were continuing, following several days of discussions with Qatari mediators that produced revised proposals but failed to achieve a breakthrough.

US President Donald Trump also expressed uncertainty over whether he would resume threatened military operations against Iran, while indicating that an agreement with Tehran remained possible.

The conflict, which began in late February, has significantly disrupted shipping activity through the Strait of Hormuz, a critical energy transit route that previously handled approximately one-fifth of global crude oil and natural gas supplies.

Meanwhile, the impact of the war on fuel prices has increased domestic pressure on Trump to bring the conflict to an end, with elevated gasoline prices weighing on voters.

Brent crude ended October at its highest level in six months, showing concerns over a potential escalation in Middle East tensions following Tuesday's US midterm elections.

Separately, Iranian President Masoud Pezeshkian said Supreme Leader Ayatollah Mojtaba Khamenei had granted the government certain powers to facilitate peace negotiations.

On another diplomatic front, the United States is scheduled to host Ukrainian and Russian delegations in Abu Dhabi on November 10-11 for discussions covering an end to the war in Ukraine, post-war security arrangements and measures to reduce tensions.

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