Oil prices rise 1.8% as Iran tensions escalate
Key points
- Brent crude increased 1.76% to $106.61 per barrel, while US West Texas Intermediate gained 1.66% to $98.06 by 0744 GMT on Tuesday.
- Reports of US strikes on Iran's Qeshm Island and comments suggesting a peace agreement remained distant renewed concerns about energy supplies.
- Traders are monitoring US-Iran diplomatic developments and shipping risks in the Strait of Hormuz, which could continue influencing crude prices.
Brent crude rose 1.76% to $106.61 per barrel on Tuesday as US strikes on Iran's Qeshm Island renewed concerns about Middle East oil supplies.
The increase followed Monday's decline of more than 7% in both oil benchmarks, when Iranian-Qatari talks raised hopes of a negotiated settlement to the conflict.
"The report added a degree of risk premium back into the oil price," said KCM Trade Chief Market Analyst Tim Waterer.
By 0744 GMT, US West Texas Intermediate crude (NYMEX:CL) had increased $1.60 to $98.06 per barrel, while Brent gained $1.84, as an Iranian official said negotiations remained far from an agreement.
The renewed military activity raised concerns about shipping disruptions in the Strait of Hormuz, while analysts said uncertainty over further US action could continue limiting price gains.
Iranian officials rejected what they described as excessive US demands, while some American officials characterized the Qeshm Island strikes as defensive measures intended to prevent attacks on commercial shipping.
Separately, Ukrainian authorities continued targeting Russian energy infrastructure, including a refinery in Yaroslavl, while Washington planned talks between Ukrainian and Russian delegations in Abu Dhabi on November 10–11.
