U.S. strikes Iran's Qeshm Island as Doha talks end without a breakthrough

The United States carried out strikes on Iran's Qeshm Island in the Strait of Hormuz on Monday, a U.S. official said, even as Iranian negotiators left Qatari-mediated talks in Doha without a breakthrough — a collision of diplomacy and force on the eve of America's midterm elections.

The strikes, first reported by the Wall Street Journal, appeared to be limited and were not a resumption of major combat operations, the official said, speaking on condition of anonymity. Another official said the strikes were defensive measures against Iranians using surface-to-air missiles against U.S. assets. The Pentagon referred requests for comment to U.S. Central Command.

Explosions on the island

Earlier on Monday, Iranian state media outlet IRNA reported several explosions on Qeshm Island, the largest island in the Persian Gulf, which sits beside the Strait of Hormuz. Fox News, citing officials, said the strikes were defensive and carried out in response to Iran firing at a U.S. aircraft. The Journal reported that the attack was the latest in a series of limited strikes Washington has carried out in recent weeks, deliberately not publicized so as not to suggest a return to large-scale combat.

The precise targets, damage and any casualties have not been independently confirmed. Separately, Iran's Revolutionary Guard claimed it had shot down a U.S. MQ-9 drone and captured other American reconnaissance drones; U.S. officials disputed part of that claim, according to ABC News. Those Iranian claims have not been independently verified.

Doha ends without a deal

Iran said messages were still being exchanged through Qatar, but no agreement was announced on the Strait of Hormuz, sanctions or a return to nuclear negotiations. Iran's Foreign Ministry said the exchanges had not ended, while insisting the next step depended on Washington's response to Tehran's conditions.

The two sides remain divided over sequencing, according to Reuters reporting on the Qatari mediation: Tehran wants the United States to end its blockade of Iranian ports and ease restrictions on oil sales before wider nuclear negotiations, while Washington has pressed for nuclear issues to be addressed from the outset. Iranian Foreign Minister Abbas Araqchi said consultations through mediators were intensive and portrayed the outcome as dependent on what he called Washington's political rationality.

Iran says its September seven-step proposal remains the basis for the exchanges, but that the sequence could be compressed into two days if Washington met its demands — including reopening the Strait of Hormuz within 48 hours of an agreement. Iran says it will not resume nuclear discussions until it verifies that its conditions have been met.

Markets hold their breath

Oil steadied after Monday's 7.6 per cent plunge, with Brent crude up about 0.5 per cent at $105.30 in Asian trading and West Texas Intermediate near $96.65, as investors weighed the state of the talks. Asian tech stocks came under fresh pressure on Tuesday as investors fretted over AI spending and earnings: MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.4 per cent to its lowest since Oct. 23, South Korean shares fell as much as 4.1 per cent, and Taiwan's benchmark slid 3.3 per cent, extending its losses to 13.1 per cent from an early-October record high.

What it means for Canadians

The Strait of Hormuz is the chokepoint for a large share of the world's seaborne oil and liquefied natural gas, so every flare-up there reaches Canadian drivers and Canadian energy stocks in opposite directions: a sustained easing could bring relief at the pump within days, while renewed escalation would push prices back up just as the Bank of Canada cited energy-driven inflation risks in its Oct. 28 rate hike to 2.50 per cent. The U.S. midterm vote on Tuesday will also shape how much room Washington has for either a deal or a wider campaign.