Brent Crude Rises 1.7% to $106.58 After U.S. Strikes on Iran
Key Facts
Brent crude rose 1.7% to $106.58 a barrel, while U.S. crude gained 1.5% to $97.88 on Tuesday, November 3, 2026, after reports of U.S. strikes on Iran restored a risk premium to oil prices. The Associated Press cited Iranian state media as saying explosions were heard on Qeshm and Hengam islands and in the nearby mainland area of Bandar Abbas. The agency said the United States had not publicly announced the strikes. The move in the oil market came as the Strait of Hormuz remained the focus of concerns, with about one-fifth of global oil supplies passing through it in peacetime. An analyst cited by Reuters said the report of the strikes "added a degree of risk premium to the price of oil."
The move in crude reflected a shift in traders' assessment of geopolitical risks, according to the analyst cited by Reuters, who said markets had begun pricing in a more diplomatic path before the report of the strikes restored a risk premium to prices. This assessment comes as risks remain concentrated around shipping through the strait, which carries about one-fifth of global oil supplies in peacetime. Against the backdrop of the escalation, the Associated Press said October saw the highest number of attacks on commercial vessels in the Strait of Hormuz since March. The agency linked the attacks to Iran's attempt to pressure Washington into lifting the U.S. blockade. It reported that U.S. allies had warned that a resumption of strikes could prompt the Houthis to step up attacks on Saudi Arabia and shipping in the Red Sea.
Oil prices had fallen sharply in Monday's session, according to the report's account, before news of the strikes restored a risk premium to the market. This comes as concerns about energy flows intersect with efforts to find a negotiated way forward between Washington and Tehran. The Associated Press said mediators were working on a framework under which Iran would halt attacks in the Strait of Hormuz in exchange for the United States lifting its blockade of Iranian ports. The agency had also cited regional officials as saying Qatar-mediated diplomacy had made progress on this path. The mediation keeps negotiations on maritime security and the blockade in focus alongside the military escalation.
In Tehran, Parliament Speaker Mohammad Bagher Ghalibaf said his country had sent the U.S. side a "firm and rational response," adding that "the ball is now in America's court to prevent war." The Associated Press reported that the subject of the response was unclear. The agency also said Iran had announced it had a two-day plan to reopen the strait and resume nuclear talks with the United States if Washington met its demands. The announcement puts reopening the waterway and resuming negotiations at the heart of Iran's message, alongside a warning that the next move rests with Washington. The report does not specify Iran's demands, but links implementation of the plan to their being met.
The strikes came on the eve of the U.S. midterm elections, after President Donald Trump had previously said the United States would not launch new strikes on Iran before the elections scheduled for Tuesday. Before the strikes were confirmed, U.S. Vice President J.D. Vance said he and the president felt positive about the prospects for reaching a negotiated settlement. The Associated Press quoted him as saying: "The president and I feel very positive about the possibility of reaching a negotiated settlement." The contrast between remarks about the prospects for a settlement and the reported strikes places the military action within a volatile political path. Meanwhile, mediators continue working on a framework linking a halt to attacks in the strait with the lifting of the blockade on Iranian ports.
The rise in risks also extended to equity markets, with European indexes falling in early trading on Tuesday: Paris's CAC 40 dropped 0.4%, London's FTSE 100 fell 0.3%, and Germany's DAX declined 0.9%. In Asia, South Korea's Kospi fell 4%, according to the Associated Press. Weakness in equities coincided with higher oil prices in a session that saw mixed asset responses to news related to the confrontation and the energy corridor. The agency did not provide an independent explanation for the stock moves in these figures; in oil, a Reuters report quoted the analyst as saying news of the strikes had restored a risk premium to prices. The Strait of Hormuz remains a link between political developments and energy-market movements, given its share of oil supplies in peacetime.
Attention in the coming days is turning to the mediation effort, with the Associated Press saying more talks were planned during that week to advance a framework for halting attacks in exchange for lifting the blockade. China also announced that it would send a special envoy to Iran, Oman and Saudi Arabia in early to mid-November as part of its efforts to support regional peace. China's foreign ministry spokesman said: "Resorting to military means does not help solve problems and will only exacerbate tensions and escalate the situation." The envoy's planned visit puts Beijing's diplomatic efforts alongside the mediators' talks, while the outcome of those efforts remained uncertain in the coverage. Any test of negotiating progress is tied to reopening the Strait of Hormuz, halting attacks and lifting the blockade, the issues the agency cited as part of the mediation framework.