US signals progress in Iran talks to avert flare-up

Oil prices surged on Tuesday following the United States' strike on Iran's Qeshm Island, sparking concerns of conflict escalation and potential disruptions to Middle Eastern energy supplies. According to Reuters, Brent crude futures surged 48 cents, or 0.5%, to $105.25 per barrel, while US West Texas Intermediate (WTI) crude increased by 47 cents, or 0.5%, to $96.93 per barrel.

The attacks on Qeshm Island were described as defensive measures to prevent Iran from targeting commercial shipping in the Strait of Hormuz. The strikes are part of a series of limited US operations on Iran in recent weeks, which Washington has not publicly disclosed. Qeshm Island, near the Strait of Hormuz entrance, houses a missile site, naval base, and major desalination plant.

The US has previously targeted the island during earlier conflict phases. Brent crude had fallen 7.63%, or $8.66, to $104.77 a barrel on Monday, ending October at its highest level in six months due to worries about the Middle East conflict escalation after the US midterm elections. The ongoing conflict, which began in late February, has already reduced Strait of Hormuz traffic, handling about a fifth of global crude oil and natural gas supplies.

Despite US President Donald Trump's downplaying of fresh attacks after the midterm elections and the possibility of a deal with Tehran, Iranian officials have warned of retaliation if the US reignites the conflict. Discussions involving Qatari mediators are ongoing, but a breakthrough has not yet been achieved.