Oil prices rose sharply Thursday following a report the U.S. is sending a third aircraft carrier strike group to the Middle East.
Brent crude, the international benchmark, jumped 4.4% to close at $102.31 per barrel, while U.S. West Texas Intermediate futures climbed 2.7% to settle at $92.87 a barrel.
U.S. officials told the Wall Street Journal that Marine Corps ships and up to 10,000 additional troops are also being deployed to the region. The forces are expected to arrive by the end of November, the officials said.
The USS Theodore Roosevelt left San Diego on a scheduled deployment Sunday, the Journal reported. The USS George H.W. Bush and USS George Washington are currently on station in the Middle East.
The deployment could signal the U.S. is preparing to escalate its war against Iran. President Donald Trump has told aides that he expects to start bombing Iran again after the U.S. midterm elections in November, U.S. officials told the Wall Street Journal last week.
“The president I think is going to escalate after the midterms; we keep hearing that the Iranians are going to escalate into the midterms,” Scott Modell, CEO of Rapidan Energy and a former CIA officer, told CNBC on Monday. “The direction of travel is toward escalation.”
Oil prices are rising even as crude flows from the Middle East have effectively recovered to prewar levels. But the bounceback is fragile, with at least three tankers coming under attack this week as they tried to transit the Strait of Hormuz, according to maritime security agencies that monitor the region.
Meanwhile, fuel shipments from the Middle East are still constrained.
The world is facing a major disruption to fuel supplies after Ukrainian strikes on Russian refineries forced Moscow to ban diesel exports. Iran and its Houthi allies have also attacked refineries in the Middle East.
Diesel prices in the U.S. hit record highs last month and remained elevated Thursday at an average $6.40 per gallon. President Trump has said he is weighing a diesel export ban, but appeared to back off from the idea in more recent public comments.
Meanwhile, Chinese refiners canceled a handful of gasoline and jet fuel exports planned for October, unnamed sources told Reuters, in a possible sign Beijing is trying to safeguard domestic supplies.
