UKMTO reports a vessel struck by an unknown projectile 40 nautical miles south of Lavan Island

The report adds to a string of Hormuz incidents since late September, yet Saudi exports have held and the Gulf crude premium has fallen to about $6 a barrel. USO is up 1.35% at $170.45 a share.

The pattern is familiar. UKMTO had tracked seven strikes near the Strait of Hormuz between September 28 and October 4, and it has kept reporting since: a tanker hit by an unknown projectile near Oman on October 23, and on October 29 an outbound vessel on fire 25 nautical miles northeast of Khasab, the second fire near Khasab in two days.

The market is less alarmed than the incident log suggests. Saudi export volumes in October nearly matched September, and the Gulf crude premium has fallen from $34 to about $6 a barrel. The oil fund USO rose 1.03% to $168.29 on October 29 and was up 1.11% before the open today at $170.06. Brent was last quoted at $115.60 a barrel on October 25. Prices are high, then, but the market is not treating each report as a new loss of supply.

Part of the reason is that the facts stay contested. Iran's Revolutionary Guards Navy has said three tankers caught fire after hitting mines, and Fars has reported a supertanker striking one; US Central Command says the main transit routes are clear of mines, and Washington has dismissed a string of such Iranian reports. Iran's navy also claims to have destroyed a US unmanned vessel, which Washington has not confirmed. This strike extends that dispute without settling it.

Diplomacy is the bigger variable. Axios reported earlier that Qatari mediators were in Tehran with a new US proposal, after Tehran rejected a seven-day Hormuz plan. Al Arabiya reported talks on a Turkey meeting before November 4, and US envoy Tom Barrack has said a deal is “very close”. A post-election bombing campaign is reportedly waiting on Khamenei's response. Until confirmed damage separates this incident from earlier ones, oil is likely to keep trading the talks rather than the strikes.