Oil prices rose on Tuesday following reported U.S. strikes on Iran's Qeshm Island late Monday. Brent crude climbed 1.75% to $106.60 per barrel, while West Texas Intermediate gained 1.7% to $98.10.
The price increase reversed a sharp decline from Monday, when oil sold off over 7% after the U.S. and Iranian presidents signaled openness to a diplomatic solution. Before that development, Brent prices had reached their highest level since 2022.
U.S. officials told The Wall Street Journal that Washington attacked Qeshm Island and has been conducting "limited strikes" against Iran in recent weeks. The military campaign has been kept deliberately low-profile to avoid signaling plans for major escalation, according to an unnamed official quoted in the report.
Despite the strikes, the Trump administration is also pursuing a diplomatic path. Vice President JD Vance told CNN, "The president and I both feel really good about the prospect of potentially coming to a negotiated settlement." U.S. Secretary of State Marco Rubio said Sunday that President Donald Trump would like to resolve the Iranian war "diplomatically" and prefers not to use military force.
Higher oil prices have contributed to inflation and gasoline prices in the U.S., a concern for Trump ahead of midterm elections.