Oil prices rose in early Tuesday trading after the US reportedly struck Iran’s Qeshm Island, jeopardising the latest peace overtures and threatening further disruption to energy supplies.
Iranian media confirmed explosions on the island without verifying any US strike.
President Donald Trump had earlier indicated that America would not attack Iran until after the US midterm elections, a position reiterated by secretary of state Marco Rubio. Voting has commenced in the elections today.
The US attacked Qeshm Island on Monday, the Wall Street Journal reported, quoting unidentified government officials.
Trump told US news outlet Axios that he is “in no rush” to decide whether or not to resume fighting in Iran.
No US government official has yet confirmed the latest strike.
Brent crude futures rose 0.31 percent to $105.10 a barrel by 03:00 GMT while US West Texas Intermediate crude gained 0.45 percent to $96.89 a barrel.
Brent fell almost 8 percent on Monday as Qatar continued diplomatic efforts to reach a peace deal between the US and Iran.
Five blasts were heard across Qeshm Island in rapid succession after some residents claimed to have spotted two aircraft, Iran’s state-run IRNA news agency reported.
Over the weekend, Iran’s supreme leader Ayatollah Mojtaba Khamenei ordered the military to respond swiftly and forcefully to any new aggression against the country, without geographical restrictions.
Qatar has been mediating between Iran and the US in efforts to strike a peace deal, with Iran offering to open the strategic Strait of Hormuz within two days if Washington meets its conditions.
The strait’s near closure sent oil prices spiralling to over $120 a barrel when the conflict began in late February. Brent and WTI are up more than 40 percent since January 1.
On Monday Sultan Al Jaber, the chief executive of Abu Dhabi energy company Adnoc, said nearly 1 billion barrels had been drained from global inventories since the strait was disrupted at the start of the US-Iran war.
The world needs larger oil stockpiles to withstand supply shocks as the conflict has exposed gaps in global energy security, he said.
Iran’s Islamic Revolutionary Guard Corps navy said 11 oil tankers caught fire in the strait within nine days from October 25 to November 2, according to IRNA.
Meanwhile, Saudi defence minister Prince Khalid bin Salman bin Abdulaziz and US secretary of war Pete Hegseth reviewed prospects for strategic defence cooperation with the Iran-aligned Houthi militia increasing attacks, the state-owned SPA news agency reported.
The Houthis, in a social media post, claimed to have hit Saudi Arabia’s Dammam Airport and military targets in Jizan.
Four of the seven Gulf stock exchanges ended higher on Monday.
Saudi Arabia’s benchmark index rose 0.5 percent, buoyed by petrochemicals maker Sabic and Saudi National Bank.
The Dubai and Abu Dhabi market gauges closed 0.6 percent and 0.3 percent higher, respectively. Qatar gained 0.2 percent.
