Oil Jumps 4% as Pentagon Deploys 9,000 More Troops Toward Iran and Trump Rejects Tehran's Hormuz Ceasefire Offer

Since the Pentagon's Sept. 30 move to send a carrier strike group and 2,000 Marines toward the Middle East, the force has grown into something bigger. A U.S. official told the Associated Press Thursday that roughly 9,000 troops, 7,000 sailors and 2,000 Marines, are now aboard a group of ships headed to the region, including the USS Theodore Roosevelt carrier strike group and the USS Makin Island amphibious readiness group, which carries the USS John P. Murtha and USS Anchorage.

That's on top of the USS George H.W. Bush and USS George Washington, both already on station. If all three carriers arrive in theater by late October or November, the total American naval presence in the Middle East would top 20,000 sailors and Marines and hundreds of aircraft, a U.S. official told AP. The Navy last had three carriers there in April, the first time that had happened since 2003.

Oil Markets React

Crude jumped Thursday on the report, first detailed by the Wall Street Journal. Brent crude, the international benchmark, closed up 4.4% at $102.31 a barrel, according to CNBC. U.S. West Texas Intermediate climbed 2.7% to settle at $92.87.

The spike comes even though crude flows from the Middle East have largely recovered to prewar levels, CNBC reported. But that recovery looks fragile. Maritime security agencies told CNBC at least three tankers came under attack this week trying to transit the Strait of Hormuz. Iranian state media, via the outlet Fars, separately reported a 2.5-million-barrel supertanker caught fire roughly five miles off the coast of Oman after an Iranian strike, according to ZeroHedge. Fars described the vessel as having been transiting the strait "illegally," a characterization from Iranian state media that has not been independently verified.

Diesel is a separate problem. U.S. pump prices for diesel hit record highs last month and sat at an average $6.40 a gallon Thursday, per CNBC. Ukrainian strikes on Russian refineries have forced Moscow to ban diesel exports, and Chinese refiners have reportedly canceled a handful of planned October gasoline and jet fuel exports, a possible sign Beijing is hoarding domestic supply, according to Reuters as cited by CNBC.

Trump Rejects Iran's Offer

In a TIME magazine interview published Thursday, Trump said he does not believe peace with Iran is possible and that he rejected a ceasefire proposal Iran presented over the weekend, according to CBS News reporting relayed by the Northeast Times. Iran's offer included a seven-day ceasefire and reopening the Strait of Hormuz. Trump called it "not good enough," saying he's after a broader deal, not just the strait.

Iran put a concrete concession on the table with the offer to reopen a chokepoint that handles roughly a fifth of global oil flow, and Washington turned it down because it wants more. Tehran, for its part, is reviewing a U.S. counterproposal, Iranian officials said this week. Iran's Revolutionary Guard Corps said Tuesday the war only ends if Washington admits defeat and pulls forces from the region entirely, according to CBS News.

Trump also told reporters the U.S. has spent six months rebuilding weapons stocks "at levels it has never reached before." CBS News separately reported Trump has acknowledged the U.S. has limited supplies of some munitions.

The Flight Attack and Iran Link

Asked by reporters Thursday whether Wednesday's attack on an Israel-bound flight, in which a co-pilot stabbed the captain and tried to crash the aircraft, had any Iran connection, Trump said: "I would say the answer, based on what I'm hearing, is 'yes,' but we're working on it right now," according to the Associated Press. He offered no evidence and declined to elaborate. No formal investigation findings, charges, or official determination of an Iran link have been publicly announced. Trump warned that if the connection is confirmed, "they'll be hit, very hard."

Squeeze on Tehran

Secretary of State Marco Rubio ordered an Iranian delegation to leave the U.S. a day early this week, after what CBS News described as technical talks between the two sides. Flights out of Tehran's main international airport have dropped 42% since U.S. sanctions took effect Sept. 23, according to FlightRadar24 data cited by CBS and AFP, falling from an average of 91 daily international flights to 53. Flights to Georgia, Oman and Azerbaijan have stopped entirely, and Iraq-Tehran flights have been halted since Sept. 25, though Iraq's transport ministry said Washington approved Najaf-to-Iran flights starting in October.

The war is now in its seventh month, per CBS News reporting. The additional ships are expected to arrive in the region by the end of November, officials told the Journal, putting the next major decision point after the U.S. midterm elections that same month.