Qatari mediators reached Tehran to test a draft US-Iran agreement after crude slid more than 7% and American aircraft struck Iran's Qeshm Island.
The war began in late February. It has left the Strait of Hormuz largely shut and pushed petrol prices up into Tuesday's US midterms. So the price of a barrel now follows every signal from the negotiating room and every explosion on the waterway.
The envoys arrived after Iranian officials held talks last week with a Qatari delegation headed by a senior adviser to Sheik Mohammed bin Abdulrahman Al Thani, the prime minister and foreign minister, Reuters reported. The discussions lasted more than 12 hours.
The president and I both feel pretty good about the prospects for potentially coming to a negotiated settlement.
Crude fell by more than seven percent on Monday as traders bet on an end to the conflict, Le Monde reported.
Oil Prices are DROPPING LIKE A ROCK, down almost $10 a Barrel, A RECORD, because people feel that there will not be a War with Iran. Iran wants a settlement, as soon as possible. It could happen!
There's no war raging. It could happen if they don't make a deal, but they want to make a deal very badly and there's a very good chance we make a deal.
The strike on Qeshm Island
Three US officials told CNN that American forces struck Qeshm Island on Monday after Iranian fire targeted US aircraft.
Surface-to-air missiles being used against American assets were the target, Reuters and the Associated Press reported.
One US official described the strike as defensive, saying Iran had fired first. The official said it wasn't a sign that strikes on Iran were restarting or that an escalation was beginning.
A US official told Fox News that the operation was not the start of a renewed, wider US campaign against Iran.
The Wall Street Journal, which first reported the operation, said similar strikes had been carried out in secret over recent weeks, on a smaller scale and deliberately kept quiet so as not to signal any intent to resume the campaign.
Some officials called those earlier assaults defensive, meant to stop Iran attacking commercial ships in the Strait of Hormuz, the Journal reported.
Two accounts of the Qeshm operation
US officials
Retaliation
- Iranian fire targeted American aircraft, officials told CNN
- The operation was limited
- An official told Fox News it was not a wider campaign
The Wall Street Journal
A quiet series
- Earlier strikes went unreported for weeks
- They were carried out on a smaller scale
- Kept secret to avoid signalling a new campaign
Iran's state news agency IRNA reported five explosions in succession on Qeshm on Monday night.
Qeshm, at the mouth of the Strait of Hormuz, has previously been used to launch attacks on shipping. The US has targeted the island several times during the war. Iran continued enforcing its closure of the strait by targeting vessels attempting to pass through, despite attacks having ceased in recent weeks.
- Late FebruaryThe strait closes The war begins and the Strait of Hormuz is largely blocked.
- Recent weeksQuiet strikes Smaller US strikes on Iran go unreported, the Journal says.
- Last weekTalks in Doha Iranian officials and a Qatari delegation talk for more than 12 hours.
- MondayExplosions on Qeshm IRNA reports five blasts; US officials confirm limited strikes.
- Tuesday nightMediators in Tehran Qatari envoys meet Abbas Araghchi on a draft agreement.
Crude gives back part of the fall
Brent traded at $105.26 a barrel and West Texas Intermediate at $97.07 after the Journal's report, Oilprice said.
That was a partial rebound. Crude had shed 7% in the previous session and inched up earlier on Tuesday.
| Benchmark | Price after strike report | Previous session |
|---|---|---|
| Brent crude | $105.26 a barrel | more than 7% lower on Monday |
| West Texas Intermediate | $97.07 a barrel | more than 7% lower on Monday |
The report added a degree of risk premium back into the oil price. Just when markets were starting to price in a more diplomatic path, this reminder of ongoing military activity has flipped the tone,
Priyanka Sachdeva of Phillip Nova said fresh headlines alone may struggle to fuel another rally without tangible signs that supplies or key energy infrastructure have been further disrupted.
Traders looked past Iranian statements that all seven of the country's conditions would have to be met before a peace deal, Oilprice said.
Before Tuesday's vote
The strikes came on the eve of midterm elections. Trump's Republican party is expected to be punished for the war's cascading effect on the cost of living. Rising petrol prices have become a signature issue of the contest.
Trump is considering renewed strikes after the vote to pressure Tehran, The Atlantic reported. Last week he was shown options for attacks lasting hours, days or weeks, potentially aimed at Iranian infrastructure and nuclear facilities.
Asked earlier on Monday whether he had considered resuming strikes once the midterms were over, Trump said no.
We had a war with Iran. We won,
He told reporters he was not sure the fighting should even be called a war, given that there had been none for months.
Trump said Pickaxe Mountain, a fortified underground site in central Iran suspected of being a nuclear facility, could still be a US target. He said an attack would be no big deal and could take an hour.
Late on Monday, US Central Command did not immediately answer a request for comment from Agence France-Presse after the Pentagon directed questions about the reported strikes to the command.
What we know
- US officials said the military struck Qeshm Island on Monday.
- IRNA reported five explosions in succession on the island.
- Qatari mediators were due in Tehran on Tuesday night.
Still unclear
- What caused the five explosions on Qeshm Island.
- The extent of damage or casualties from the strikes.
- Whether Washington will resume large-scale combat after the midterms.
- Whether the draft agreement will be signed.
On Tuesday night, Qatari mediators are due to meet Foreign Minister Abbas Araghchi, with a version of the draft agreement discussed over the past eight days on the agenda.
