IGI Logo

Global crude oil prices on Tuesday rebounded in early hours after US forces reportedly had struck Iran's Qeshm Island, heightening concerns over a potential escalation in regional tensions and renewed threats to energy supplies from the Middle East. 

Brent crude -- the international oil benchmark -- rose 61 cents or 0.58 per cent to $105.38 a barrel.

Similarly, US West Texas Intermediate crude gained 71 cents or 0.73 per cent to $97.17 a barrel in early trade.

The rebound followed a sharp decline in the previous session when Brent settled $8.66 or 7.6 per cent lower at $104.77 a barrel.

Reports -- citing US officials -- claim that American forces targeted Qeshm Island in an operation described by some officials as defensive to limit Iran's ability to threaten commercial shipping in the Strait of Hormuz.

Meanwhile, market participants said the development prompted traders to reintroduce a geopolitical risk premium into crude prices.

The latest military developments come even as diplomatic channels remain active.

In addition, Tehran said discussions with Washington aimed at ending the conflict are continuing, although recent talks mediated by Qatar concluded without a breakthrough despite revised proposals from the Iranian side.

US President Donald Trump also signalled uncertainty over the prospect of renewed military action, saying an agreement with Tehran remained possible and casting doubt on whether previously threatened strikes would proceed.

The conflict which began in late February has significantly curtailed shipping activity through the Strait of Hormuz, a critical energy corridor that traditionally handles roughly one-fifth of global crude oil and natural gas flows.

The prolonged disruption has contributed to elevated fuel prices, adding pressure on the US administration as higher gasoline costs remain a concern for consumers and policymakers.

Additionally, Brent crude closed October at its highest level in six months amid concerns that instability in the Middle East could intensify following the US midterm elections.

In a separate development, Iranian President Masoud Pezeshkian said Supreme Leader Ayatollah Mojtaba Khamenei had delegated certain authorities to the government to pursue peace negotiations.