Oil prices rose on Tuesday after the United States reportedly struck Iran’s Qeshm island late Monday. Brent crude gained 1.75% to $106.60 a barrel, while West Texas Intermediate rose 1.7% to $98.10.
The rebound followed a decline of more than 7% on Monday, when the U.S. and Iranian presidents signaled openness to a diplomatic resolution of the war. Before that drop, Brent had reached its highest level since 2022 as concerns grew about further U.S. strikes on Iran after the midterm elections.
U.S. officials told The Wall Street Journal that Washington attacked Qeshm Island on Monday and had conducted limited strikes against Iran in recent weeks. The report said the campaign had been kept low-profile to avoid signaling plans for a wider escalation.
At the same time, the Trump administration has described a negotiated settlement as a possibility. Vice President JD Vance told CNN that he and President Donald Trump felt positive about the prospect of reaching an agreement. Secretary of State Marco Rubio said on Sunday that Trump wanted to resolve the conflict diplomatically and preferred not to use military force.
High oil prices have added to inflation and gasoline costs in the United States, concerns for Trump ahead of the midterm elections. Two Federal Reserve presidents said last week that interest rates may need to rise to curb inflation.
Sources: CNBC Markets.