Oil prices edge higher after reported US strike on Iran’s Qeshm Island, reviving supply concerns

Oil prices edged higher in early Asian trade on Tuesday after reports of a US strike on Iran’s Qeshm Island raised fresh concerns about the conflict, even as diplomatic efforts to end the war continued.Brent crude futures rose 48 cents, or 0.5%, to $105.25 a barrel by 0104 GMT, while US West Texas Intermediate (WTI) crude gained 47 cents, or 0.5%, to $96.93.The gains came a day after Brent slumped 7.63%, shedding $8.66 to settle at $104.77 a barrel, as markets weighed the possibility of progress in efforts to end the conflict.However, reports of fresh military action have put the focus back on the risk of further escalation. The Wall Street Journal reported, citing US officials, that American forces had struck Iran’s Qeshm Island. Some officials described the strikes as defensive, intended to prevent Iran from targeting commercial vessels in the Strait of Hormuz.The waterway remains central to concerns over global energy supplies. Before the conflict began in late February, it carried around a fifth of the world’s crude oil and natural gas. The sharp reduction in shipping traffic since then has kept supply risks elevated.At the same time, both sides have indicated that the door to negotiations remains open. Iran said contacts with Washington were continuing after talks with Qatari mediators ended without a breakthrough, although revised proposals were put forward.US President Donald Trump, meanwhile, cast doubt on whether he would resume threatened military strikes and said an agreement with Tehran was still possible. Iranian President Masoud Pezeshkian also said Supreme Leader Ayatollah Mojtaba Khamenei had granted the government certain powers to pursue peace talks.The competing signals have left oil markets balancing the possibility of a diplomatic breakthrough against the threat of renewed military action. Brent had already climbed to a six-month high at the end of October amid concerns over an escalation in the Middle East.High fuel prices are also adding to pressure on Trump to bring the conflict to an end, with the war emerging as a key factor behind rising gasoline costs in the US.Separately, Washington is scheduled to host Russian and Ukrainian delegations in Abu Dhabi on November 10-11 for discussions on ending the war in Ukraine, post-war security arrangements and de-escalation.