US struck Iran's Qeshm Island, US officials confirm - report

Oil prices climbed in early Asian trading on Tuesday after a report that the United States launched an attack on Iran's Qeshm Island, heightening fears of a further escalation in the ongoing eight-month conflict and potentially disrupting oil supplies in the Middle East. Brent crude futures increased by 48 US cents, or 0.5 percent, to US$105.25 a barrel, while US West Texas Intermediate crude surged by 47 US cents, or 0.5 percent, to US$96.93 a barrel.

Brent crude futures had settled 7.63 percent lower at US$104.77 a barrel the previous day. According to the Wall Street Journal, citing US officials, the United States targeted Iran's Qeshm Island, described by some officials as a defensive move to prevent Iran from attacking commercial ships in the Strait of Hormuz. The report reintroduced a risk premium into the oil price, marking a shift in sentiment as markets began to consider a more diplomatic resolution.

Tim Waterer, chief market analyst at KCM Trade, noted that the renewed military activity has altered the market tone. Despite ongoing discussions between Iran and the US aimed at ending the war, Tehran reported on Monday that these talks were ongoing, following days where Iranian negotiations with Qatari mediators resulted in adjusted proposals but no significant breakthrough.

President Trump expressed uncertainty on Monday regarding whether he would proceed with a planned resumption of military strikes against Iran, suggesting the possibility of reaching an agreement with Tehran. The US-Iran conflict, which commenced in late February, has significantly curtailed passage through the Strait of Hormuz, which historically accommodated about a fifth of global crude oil and natural gas supplies.

This conflict is a major contributor to volatile petrol prices, placing pressure on voters and prompting President Trump to seek an end to the dispute. Brent crude futures closed at their highest level in six months in October, driven by concerns that the Middle East crisis could flare up again following the US midterm elections.

Iranian President Masoud Pezeshkian announced that Supreme Leader Ayatollah Khamenei had authorized the government to pursue peace talks. Additionally, the United States will convene delegations from Ukraine and Russia in Abu Dhabi on November 10 and 11 to discuss the conclusion of Russia's war against Ukraine, post-war security arrangements, and de-escalation measures.