Crude oil rebounds past $105 after US strikes on Iran's Qeshm Island
Synopsis
Key Takeaways
Global crude oil prices rebounded sharply in early Tuesday trade after US forces reportedly struck Iran's Qeshm Island, reigniting fears of a broader regional escalation and renewed threats to energy supplies flowing through the Middle East. The development pushed the international benchmark back above $105 a barrel, reversing a steep decline from the previous session.
How Markets Moved
Brent crude — the international oil benchmark — climbed 61 cents, or 0.58%, to $105.38 a barrel in early trade on Tuesday, 3 November 2026. US West Texas Intermediate (WTI) crude gained 71 cents, or 0.73%, to reach $97.17 a barrel. The rebound followed a punishing previous session in which Brent had settled $8.66, or 7.6%, lower at $104.77 a barrel.
What Happened at Qeshm Island
According to reports citing US officials, American forces targeted Qeshm Island in an operation described by some officials as defensive, aimed at limiting Iran's capacity to threaten commercial shipping in the Strait of Hormuz. Market participants said the strike prompted traders to reintroduce a geopolitical risk premium into crude prices — a premium that had partially unwound during the previous session's sell-off.
Diplomacy Still Active Despite Military Escalation
Tehran indicated that discussions with Washington aimed at resolving the conflict are continuing, though recent talks mediated by Qatar concluded without a breakthrough despite revised proposals from the Iranian side. US President Donald Trump also signalled uncertainty, saying an agreement with Tehran remained possible and casting doubt on whether previously threatened strikes would proceed. In a separate development, Iranian President Masoud Pezeshkian stated that Supreme Leader Ayatollah Mojtaba Khamenei had delegated certain authorities to the government to pursue peace negotiations.
Strait of Hormuz and the Global Energy Risk
The conflict, which reportedly 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 worldwide, adding pressure on the US administration as higher gasoline costs weigh on consumers and policymakers alike. Notably, Brent crude closed October at its highest level in six months, amid concerns that instability could intensify following the US midterm elections.
What This Means for India
India, which imports over 85% of its crude oil requirements, faces direct exposure to sustained price spikes. A prolonged disruption to Hormuz flows could pressure the Indian rupee, widen the current account deficit, and feed through to domestic fuel prices. The Centre will be closely tracking developments as higher crude costs risk complicating fiscal consolidation targets.