War Room brief: U.S. strikes on Iran's Qeshm Island lift oil back to $98 on election eve

Iran and the United States

Overnight, the diplomatic story and the military story pulled in opposite directions. CNBC reports that a U.S. official told MS Now the military struck Iran's Qeshm Island on Monday, calling it "a defensive measure" in response to Iranians "using surface to air missiles against US assets." The Wall Street Journal first reported the strikes and, per CNBC, said Washington has carried out "limited strikes" in recent weeks, kept low-profile on purpose. Iran's account of the damage was not in the reports we read. Our earlier report has the detail.

On the talks, Vice President JD Vance told CNN he is optimistic about a "negotiated settlement." A senior Iranian official told Reuters the two sides remain far from a deal and that "Tehran's conditions must be met if the US wants Hormuz reopened," with nuclear talks only to follow, according to CNBC's summary. CNBC adds that Qatari mediators were reported to be traveling to Tehran for talks on a draft that has been under negotiation for eight days. Watch today: Iran's response to the strikes, any word from the Qatari mediators, and the midterm results.

Hormuz and the Gulf

OilPrice.com reports, citing a maritime security consultancy, that a UAE-owned offshore tug was hit by a projectile near the Musandam Peninsula on Sunday evening and was seen "partially sinking." The crew's status was not reported, and the outlet describes it as a likely Iranian attack, not a confirmed one. Separately, a Reuters headline says one Indian was killed in an attack on a ship near Oman, according to India's foreign ministry; we could read only the headline and cannot say whether the two incidents are linked.

On the business side, CNBC reports Saudi Aramco's third-quarter adjusted net income rose 9% to $31.2 billion on stronger refining margins. CEO Amin Nasser said attacks on key energy facilities "continued to amplify the global energy supply crisis" and that the company is exploring extra overseas storage and alternative export routes. In Yemen, a Reuters headline from late Monday says the Houthis have advanced to within 80 km of Aden, citing sources. We could not read the article, so treat that as unconfirmed. Watch today: any Houthi claim against Saudi facilities.

Russia and Ukraine

Reuters headlines say the Kremlin has confirmed trilateral Ukraine peace talks in Abu Dhabi next week, and that a U.S. envoy says Washington will mediate them. President Zelenskyy is in Germany, per another Reuters headline. We read only the headlines, so we have no detail on who attends or what is on the table. The fighting continues: Reuters headlines report Russian attacks on energy facilities in the Odesa and Zhytomyr regions, and Ukrainian drones setting fire to a major Russian refinery, citing a local governor. Each is a claim by one side that we have not verified. Reuters also runs an analysis on the Black Sea war drawing in NATO states; we have not read it. Watch today: official confirmation of the Abu Dhabi dates and delegations.

Markets box

Futures, gold and VIX are live as of about 7 a.m. ET Tuesday. ETF figures are Monday's close; the funds have not opened.

Prices from Yahoo Finance; percentages are our arithmetic. Yahoo's Brent line may track a different contract month than other feeds, so CNBC's morning figure of $105.77 and the FT's "$106" headline are the cross-check.

Oil. Crude rebounded after a Monday drop of more than 7%, which CNBC notes followed Brent touching its highest since 2022 before the diplomacy headlines. OilPrice.com quotes an analyst who said the strike report "added a degree of risk premium back," and another who warned headlines alone may struggle to sustain a rally without a concrete physical supply disruption. Airlines. Fortune reports Ryanair's CEO expects European fares to rise 10% and possibly 20% next year, with only 25% of next fiscal year's fuel hedged at about $95 a barrel; Fortune adds that major U.S. airlines abandoned fuel hedging years ago and so feel price swings sooner. Defense and shipping. Defense stocks and airlines both rose Monday, a reminder that the market is trading headlines both ways. We found no new war-risk insurance or airspace notice this morning. Consumers. Pump prices trail crude by days to weeks, so one day's move does not change this week's price at the pump.

More: crude oil chart, gold chart, War Room, markets. Yesterday's brief: War Room brief, November 2.

Sources: CNBC, CNBC, CNBC, OilPrice.com, Fortune, Reuters and FT headlines (not read in full), Yahoo Finance. Claims are attributed to the parties that made them. This is market information, not investment advice.