Oil is up this morning because the shooting around the Strait of Hormuz is not over. On Monday, Nov. 2, US officials said the military carried out limited strikes on Iran's Qeshm Island, hours after the Vice President said the US and Iran had "certainly made some progress" toward a deal. WTI crude gave back part of Monday's 7% drop overnight. Stock futures care more about chips and tonight's vote.
Why is oil up today?
Because the market just got a reminder that a deal is possible but not done. On Monday, WTI crude fell 7.4% to settle at $96.46 and Brent fell 7.6% to $104.77 as Washington and Tehran both signaled openness to talks (CNBC). After the Qeshm reports, December WTI crude futures traded at $98.10 and January Brent at $106.91 as of 12:40 AM PT Tuesday, per Yahoo Finance quotes. That is roughly 2% back, a partial rebuild of the war premium, not a panic bid.
Our read: the overnight tape is pricing this as an oil story, not a broad risk-off event. Gold slipped overnight rather than rallying, which fits a market that sees the strike as contained for now. That can change on the next headline.
What happened on Qeshm Island?
According to CNN, three US officials said the US military carried out limited strikes on Qeshm Island on Monday and described them as defensive. One official said the action followed Iran firing at a US aircraft; another described it as a response to Iranians "using surface to air missiles against US assets." The Wall Street Journal reported the strikes first and said similar strikes had been carried out before without being announced. Officials said this was not a resumption of major combat.
Iran's state-affiliated Fars News Agency reported several explosions on Qeshm early Tuesday local time, according to CNN. Iranian claims about downed US drones have not been independently verified. Tehran's lead negotiator, parliament speaker Mohammad Bagher Ghalibaf, said any response to "enemy miscalculation will be unpredictable."
Where is Qeshm Island? It is Iran's largest island, inside the Strait of Hormuz and about 14 miles from the port city of Bandar Abbas (CNN). It sits right on the main export lane for Gulf crude, which is why a strike there moves oil more than a strike somewhere inland would.
Is the Strait of Hormuz open or closed?
Shipping through the strait has been heavily disrupted since the war began in late February, but it has not been declared closed (Euronews). CNN notes about 20 million barrels a day moved through Hormuz before the war. We have seen no report this morning of a new closure. A roughly 2% move in Brent is not what a closure would look like. Watch UKMTO shipping advisories and any Iranian action against tankers; those would matter more than the strike itself.
- Reported: limited, defensive US strikes on Qeshm Island (CNN, WSJ, citing US officials).
- Unverified: Iranian claims of downed US drones.
- Still in play: Qatari-mediated talks. President Trump said Monday a deal "could happen."
- Context: Trump had said the US would not attack Iran before the midterms.
How stock futures are reacting
Barely. S&P 500 futures were at 7,558 (-0.2%) and Nasdaq 100 futures at 28,116 (about flat) as of 12:40 AM PT. But that small move sits on top of a hard Monday: the Nasdaq 100 closed Nov. 2 more than 10% below its Oct. 6 record, which is correction territory (our Nov. 2 close recap). QQQ closed at $681.09. For the chip slide that started this, see why did stocks fall today.
QQQ levels below are a CosAnalyst gamma estimate, as of 4:15 PM PT Nov 2. They are our positioning calculation, not exchange data and not a forecast.
| Level | What it is (CosAnalyst gamma estimate, as of 4:15 PM PT Nov 2) |
|---|---|
| 697 | Call wall above |
| 681.09 | QQQ close, Nov 2 |
| 680 | Largest put wall, just under the close |
| 675 | Next put wall below |
Dealers were estimated short gamma near these prices, so hedging tends to add to moves rather than dampen them.
If Iran's response stays verbal and Brent gives back the overnight gain, the strike likely gets filed as contained and 680 becomes the first test of whether Monday's selling was exhaustion. If Iran targets shipping or Brent keeps climbing, an energy inflation scare stacks on a market already in a correction, and a break of 680 that holds puts 675 in view. A concrete deal headline would take out the war premium first, and 697 becomes the upside reference. These are conditions to watch, not predictions.
What to watch: midterm results, JOLTS, AMD after the close
- WTI crude and Brent at the US cash open: do they hold the overnight gain?
- QQQ around 680 in the first hour.
- JOLTS job openings this morning, the first labor read of the week.
- AMD earnings after the close, the next test for the chip trade.
- Midterm returns tonight, which could swamp everything above.
- Fed odds: on Polymarket, a 25 bp December hike was priced at 72.5% and no change at 25.5%, as of 12:51 AM PT Nov 3 (Polymarket). Higher oil keeps that hike risk alive.
Background on the pre-midterm strike reports: US Strikes Iran's Qeshm Island: What It Means for Oil and the Strait of Hormuz.
FAQ
Why is oil up today?
WTI crude was at $98.10 and Brent at $106.91 as of 12:40 AM PT Nov. 3, 2026, up about 2% from Monday's settles, after US officials said the military carried out limited strikes on Iran's Qeshm Island near the Strait of Hormuz.
Did the US strike Iran?
Yes, according to US officials cited by CNN and the Wall Street Journal. They described limited, defensive strikes on Qeshm Island on Nov. 2, 2026, after Iran fired at US aircraft, and said it was not a resumption of major combat.
Where is Qeshm Island?
Qeshm is Iran's largest island. It sits inside the Strait of Hormuz, about 14 miles from Bandar Abbas, on the main shipping lane for Gulf oil exports.
Is the Strait of Hormuz open?
It has not been declared closed, but shipping has been heavily disrupted since the war began in late February 2026. As of early Nov. 3 we had seen no report of a new closure.
Sources and disclaimer
Disclaimer: This article is for informational and educational purposes only and is not financial advice or a recommendation to buy or sell any security. It does not predict military action or oil prices, and reported events may change as officials comment. QQQ levels are a CosAnalyst gamma estimate, as of 4:15 PM PT Nov 2, not a forecast. Nothing here guarantees any outcome. Do your own research or talk to a licensed professional before making investment decisions.
Sources: CNN (Nov. 3, citing US officials and Fars), Wall Street Journal (via CNN), CNBC (Nov. 2 settlements), Euronews, Yahoo Finance futures quotes (CL=F, BZ=F, ES=F, NQ=F, pulled 12:40 AM PT Nov. 3), Polymarket (12:51 AM PT Nov. 3), CosAnalyst desk (QQQ close and gamma estimate). Times are Pacific.
Follow @CosAnalyst on X for live market reads, and join our free Telegram channel @CosAnalystSignals.