Oil rises as Iran says war deal remains distant, US strikes Qeshm

LONDON: Oil prices rebounded on Tuesday after a steep selloff in the previous session, as an Iranian official said Tehran and Washington remained far from a deal to end the war and the US struck Iran’s Qeshm Island.

Brent crude futures rose $1.36, or 1.3%, to $106.13 a barrel by 1043 GMT, while US West Texas Intermediate crude was up $1.45, or 1.5%, at $97.91.

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

A US official said on Monday 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.

On Tuesday, a senior Iranian official told Reuters that the two sides were far from reaching a deal to end the war, and Tehran would not accept Washington’s “excessive demands”.

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.

Iran-US deal still out of reach despite diplomatic push, Iranian official says

Qatar’s foreign ministry spokesperson said on Tuesday that the United States 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.

“Despite these positive signals, it’s probably too early to think escalation risks have passed,” ING said in a note on Tuesday. “What is clear, though, is that strong signals of progress in peace talks would mean more downside for prices.”

Polls open across the United States on Tuesday 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 on Tuesday.

Russia launched a massive overnight strike on Ukrainian energy facilities in the Vinnytsia, Dnipropetrovsk and Kharkiv regions, Interfax news agency said, citing the defence ministry.

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.