Oil Prices Climb After US Strikes Iran's Qeshm Island. Tensions Escalate in Strait of Hormuz

The Strait of Hormuz serves as a vital transit route for global oil shipments. Commercial vessels have faced repeated attacks in the area over recent months. Diplomatic negotiations to resolve these tensions remain stalled.

On November 2, 2026, the Iranian Islamic Revolutionary Guard Corps reported the capture of two US reconnaissance drones. The organization also claimed that it destroyed an MQ-9 drone near the Strait of Hormuz.

1. US officials described the November 2, 2026, strikes on Qeshm Island as defensive measures. The operation targeted radar detectors and missile launchers that officials said threatened commercial shipping in the Strait of Hormuz.

2. The US military launched strikes. This action followed reports that the Islamic Revolutionary Guard Corps fired at a US aircraft on November 2, 2026. The US government stated the strikes aimed to limit Iran's capacity to target US assets and commercial vessels.

3. US Secretary of State Marco Rubio stated on November 1, 2026, that the administration prefers to resolve the conflict diplomatically. Vice President JD Vance also expressed optimism regarding the potential for a negotiated settlement.

1. The U.S. military conducted limited strikes on Iran's Qeshm Island on the night of November 2, 2026, targeting missile batteries used to attack U.S. planes. U.S. Central Command confirmed the action, which Iranian Deputy Foreign Minister Kazem Gharibabadi characterized as an act of war. Meanwhile, Secretary of Iran's supreme national security council Mohsen Rezaei rejected the U.S. response to Iranian demands as inadequate.

2. US forces struck Qeshm Island on November 2, 2026. Oil prices rose by more than $1 on November 3, 2026. West Texas Intermediate crude reached $98.06 per barrel, while Brent crude hit $106.61 per barrel by 07:44 GMT. Against the backdrop of this intensifying energy and security crisis, the US is simultaneously pushing forward on other diplomatic fronts, with plans to host delegations from Ukraine and Russia in Abu Dhabi on November 10 and 11, 2026. These talks will address post-war security pacts and de-escalation efforts.

3. U.S. West Texas Intermediate futures closed at $96.09. Brent crude settled at $103.60. Prices dropped following a 7% decline on November 2, 2026. Washington and Tehran signaled openness to discussions. Qatar mediates talks between the two nations to prevent further escalation. The United Kingdom Maritime Trade Operations Centre reported four ship attacks since November 1, 2026.

4. Iran refused to ship its 400kg stockpile of highly enriched uranium to a third country. Tehran demands the unfreezing of assets held abroad. The government also requires the lifting of oil export sanctions to reopen the Strait of Hormuz.