Oil prices climbed in early Asian trading on Tuesday after the Wall Street Journal reported that the United States had struck Iran’s Qeshm island. The report renewed concerns about an escalation in the eight-month conflict and the risk of prolonged disruption to oil supplies from the Middle East.
Brent crude futures gained 48 cents, or 0.5%, to $105.25 a barrel by 0104 GMT. US West Texas Intermediate crude rose 47 cents, also 0.5%, to $96.93. Brent had fallen $8.66, or 7.63%, on Monday to settle at $104.77 a barrel.
The Wall Street Journal, citing US officials, reported the strike. Some officials described the attacks as defensive, saying they were intended to prevent Iran from having the freedom to target commercial ships in the Strait of Hormuz.
The report added a risk premium to oil prices, said Tim Waterer, chief market analyst at KCM Trade, noting that markets had been starting to anticipate a more diplomatic course before the latest report shifted sentiment.
Tehran said on Monday that contacts with Washington to end the conflict were continuing. Talks between Iranian officials and Qatari mediators had concluded after several days with revised proposals but no breakthrough. US President Donald Trump also expressed doubt on Monday about whether he would resume threatened military strikes, while saying a deal with Tehran could be possible.
The conflict, which began in late February, has sharply reduced traffic through the Strait of Hormuz, a route that previously carried about one-fifth of global crude oil and natural gas supplies. Brent ended October at its highest level in six months, amid concerns that the conflict could escalate again after Tuesday’s US midterm elections.
Sources: Investing.com News.