Oil Prices Jump After U.S. Hits Qeshm Island

Gasoline costs at the pump are set to be the highest of any U.S. Election Day in history, a trend that accelerated on Tuesday after crude oil prices spiked in Asian markets. The market shift followed the U.S. military's limited strikes on Qeshm Island in Iran, which occurred on Monday. These attacks mark a new phase of conflict that has left residents in the Middle East on edge since the war began earlier this year.

Three U.S. officials told CNN that the strikes were defensive in nature. The action was a direct response to Iran firing surface-to-air missiles at U.S. aircraft. One official described the move as a measure to protect American assets in the region, noting that the operation was not the major combat campaign that leadership had been considering for weeks.

Iran's state-affiliated Fars News Agency reported hearing several explosions on Qeshm Island in the early hours of Tuesday local time. Residents on the nearby Hengam Island and in the port city of Bandar Abbas also heard the blasts. Qeshm Island sits about 14 miles from Bandar Abbas and is a focal point for Iran's efforts to control traffic through the Strait of Hormuz. Before the war, roughly 20 million barrels of oil passed through that waterway daily.

The timing of the strikes coincides with ongoing diplomatic efforts. President Donald Trump suggested on Monday that a deal with Tehran could still happen, though he did not address the new reports of strikes during a Monday night appearance on Fox News. He did say the U.S. might target Pickaxe Mountain, a suspected underground nuclear site where Israel believes Iran stores enriched uranium.

In that interview, Trump characterized the conflict as a soft war, arguing that no major fighting was currently raging. He stated that a deal was highly likely because Iran wanted one badly. Vice President JD Vance told reporters on Monday that the U.S. and Iran had made some progress toward an off ramp for the war. Vance said he and the president felt pretty good about a potential deal after speaking earlier in the day.

Iran's Supreme Leader Mojtaba Khamenei warned on Saturday that any major new attack would meet a response without geographical limitations. A senior security official in Tehran told CNN that Iran would target infrastructure beyond oil facilities, including AI systems. The U.S. administration kept the latest strikes under wraps to avoid overstating the defensive move, according to a person familiar with the matter.