Oil rises as peace prospects dim after US strike on Iran

Brent crude futures rose $1.36, or 1.3%, to $106.13 a barrel this morning, while US West Texas Intermediate crude was up $1.45, or 1.5%, at $97.91.

Both benchmarks had dropped more than 7% yesterday as talks between Iranian and Qatari officials lifted hopes for an end to the US-Israeli war with Iran.

A US official said yesterday the US had struck Iran's Qeshm Island. Some officials described the assaults as defensive and aimed at preventing Iran from attacking commercial ships in the Strait of Hormuz.

Iran's parliament speaker Mohammad Bagher Qalibaf said Tehran had given Washington a "strong and rational response," adding that "the ball is in the US' court," according to state media.

Qatar's foreign ministry spokesperson said today that the US and Iran remain committed to mediation efforts and are reviewing proposals aimed at bridging their differences. Talks with both sides had shown progress and efforts to narrow remaining gaps were continuing, the spokesperson added.

"What is clear, though, is that strong signals of progress in peace talks would mean more downside for prices."

Polls open across the US today in midterm elections that will serve as a referendum on President Donald Trump's first two years back in office, with voter frustration over the Iran war and the resulting rise in fuel prices emerging as a key issue.

Brent ended October at its highest in six months on concerns that the conflict could escalate again after the US midterm elections.

A Ukrainian drone attack, meanwhile, damaged an oil refinery in the Russian city of Yaroslavl, Governor Mikhail Evrayev said today.

Additionally, the US will bring together delegations from Ukraine and Russia in Abu Dhabi on November 10 and 11 to discuss ending the war, post-war security pacts and de-escalation efforts.