Brent Climbs Back Above $105 After a Reported US Strike on Qeshm Island Interrupts Monday's 7.6% Plunge

Diesel futures fell 5.4 percent, their biggest drop since May, but the pump price tells the longer story: the average US diesel price was $6.29 a gallon on Monday morning, up 77 percent this year, and global crude is about 45 percent higher than when the war began in late February.

What happened on Qeshm Island?

At 21:48 ET on Monday, multiple US officials told CBS that American forces had struck Iranian targets near the strait, and a senior military official said the strikes hit Qeshm Island in response to Revolutionary Guard fire on a US aircraft. The Wall Street Journal, citing US officials, reported the same, with some describing the action as intended to stop Iran targeting commercial ships. US Central Command had not confirmed the strike when the morning reports were written. Iranian state media said the same day that 11 tankers had caught fire in the strait over nine days, a claim CBS flagged as unverified, and the UK's UKMTO reported a vessel hit by an unknown projectile on Sunday.

Where does Brent go from here?

FinanceFeeds' base case is a $103 to $108 range while the talks run, with $100 needing a Hormuz deal and $113 needing the talks to break down after today's election. Bank of America's Francisco Blanch wrote in September that skirmishes into year end would keep Brent in a $95 to $120 band and that major infrastructure damage could send it to $150. Friday's settlement was $113.43, so even after Tuesday's bounce the market has taken out most of last week's war premium.

Marathon Petroleum reports before the US open this morning, one of the first refiners to describe a quarter with diesel above $6. The larger numbers come tonight, when the polls close and the White House decides what "after the midterms" means for Iran.