Oil prices rose on Tuesday after the United States reportedly carried out strikes on Iran’s Qeshm Island late Monday. The development came just one day before the US midterm elections.
Brent crude oil prices increased 1.75% to $106.60 per barrel on Tuesday. Meanwhile, West Texas Intermediate (WTI) crude prices rose 1.7% to $98.10 per barrel, CNBC reported.
Oil prices fall over 7% before Tuesday's rise
The rise came a day after oil prices fell sharply. Brent and other oil prices dropped more than 7% on Monday after US President Donald Trump and Iranian President signalled that they were open to finding a diplomatic solution to the Iran war.
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Before Monday's fall, Brent crude prices had reached their highest level since 2022. This happened as concerns grew that the US could carry out more military strikes against Iran after the midterm elections, CNBC reported.
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US strikes on Iran raise oil supply fears
The United States attacked Iran's Qeshm Island on Monday, US officials told The Wall Street Journal. The officials also said that Washington had carried out limited military strikes against Iran in recent weeks.
{{/usCountry}}The United States attacked Iran's Qeshm Island on Monday, US officials told The Wall Street Journal. The officials also said that Washington had carried out limited military strikes against Iran in recent weeks.
{{/usCountry}}The US military campaign against Iran has been kept deliberately low-profile to avoid giving the impression that Washington is planning a major escalation in the conflict, the Wall Street Journal reported, citing an unnamed US official.
Trump and Vance signal possible Iran peace deal
Despite the military action, the Trump administration has continued to speak about the possibility of ending the conflict through talks.
US Vice President JD Vance told CNN that both he and Trump felt positive about the possibility of reaching a negotiated settlement with Iran. "The president and I both feel really good about the prospect of potentially coming to a negotiated settlement," Vance said.
Also read: US midterm elections: How the outcome could impact Wall Street, AI stocks and Treasury yields
US Secretary of State Marco Rubio also said on Sunday that Trump wanted to resolve the Iran war through diplomacy. Rubio said the US president preferred a diplomatic solution rather than using military force, CNBC reported.
High oil prices add to US inflation concerns
Rising oil prices have contributed to higher inflation and gasoline prices in the United States. This has become a concern for Trump as the country prepares for the midterm elections.
Last week, two Federal Reserve presidents said interest rates may need to rise to control inflation. Higher interest rates can slow economic growth and increase borrowing costs for consumers, but they can also help bring inflation down, CNBC reported.