Journal says Trump rejected Iran's seven-day ceasefire and expects bombing after the midterms

The Wall Street Journal, citing U.S. officials, reported that Washington has told Tehran and the mediators that President Trump does not intend to lift the maritime blockade of Iranian ports. Those officials said he has rejected Iran’s seven-day ceasefire and told aides he expects to resume bombing after November’s midterm elections. The Journal says he is skeptical Iran will meet his demands. Lifting the blockade is the condition Foreign Minister Abbas Araghchi put first for reopening the Strait of Hormuz, the narrow passage for oil leaving the Persian Gulf. Reuters carried the report and said it could not immediately confirm it. Iran, Reuters reported, was still awaiting an official answer.

A White House official told the Financial Times on Friday that the two sides "are having positive and constructive discussions through the mediators." "The United States is in a very strong position with control of the Strait of Hormuz, so we are not in a rush," the official said. Nearly 22 million barrels of oil had left the strait the previous night, the official said. On Tuesday, Trump said his special envoys Steve Witkoff and Jared Kushner held a three-hour meeting with the Iranian delegation in New York. He called the talks "very good" and "very productive."

Araghchi told reporters at the United Nations on Friday, "If there is seriousness on the US side to come to a deal and reopen the Strait of Hormuz, everything is now prepared." The seven days he offered, a pause in the fighting and a reopening of the strait, start only if Washington accepts. He has asked the United States to lift its naval blockade of Iranian ports, waive sanctions on Iranian oil sales, release frozen Iranian funds, and abide by a ceasefire that includes Lebanon. He has said he would rather reach a deal before the election, and that the choice sits with Washington.

Prices were set on truce hopes

November Brent settled at $104.32, down 2.1%. November West Texas Intermediate, the U.S. crude benchmark, settled at $92.41, down 2.3%. Reuters said the drop came on mounting hopes for a truce and on talk of a possible U.S. ban on diesel exports. Both prices were set before the Journal published. The truce hopes Reuters described were in that settlement. The reported rejection was not.

Over the five sessions through Friday, WTI fell 7.9% and Brent rose 0.4%.

Reuters said Brent’s premium over WTI, the gap by which the global price exceeded the U.S. one, rose to its highest since May for a third day in a row, and that talk of a diesel-export ban was widening it. Traders worried, Reuters said, that Houthi attacks could disrupt Saudi supply. Saudi Arabia said it intercepted six missiles aimed at Taif and Yanbu. The Houthis claimed strikes on Riyadh and on Aramco sites at Yanbu. The East-West pipeline, which carries Saudi crude to the Red Sea and bypasses the strait, was shut on Friday, September 11 after drone strikes Riyadh blamed on Iraqi militia, and was only just resuming, Reuters reported.

A holder of these crudes in a fund got Friday’s stock-market close, which came before the report and is not the futures settlement above. The United States Brent Oil Fund, CBNO, which holds Brent crude futures, fell 3.5%. Its largest position is the December contract, not the November contract that settled at $104.32. The United States Oil Fund, BUSO, which holds WTI crude futures, fell 3.1%.

A senior Iranian official said the strait would stay closed until Iran’s conditions were met, including a lifting of the U.S. blockade on Iranian ports. On Saturday, September 19, Adm. Brad Cooper, chief of U.S. Central Command, said oil and liquefied natural gas shipments through Hormuz over the prior two weeks were at a six-month high, and that Iran had exported zero barrels under that blockade. Kpler’s preliminary count on Friday put crude flows out of the strait at 33.7 million barrels in the week starting Sunday, September 20, roughly on track with the week before. Reopening, on Iran’s terms, is passage Tehran says it has not granted. It is not a description of an empty strait, and it is not the same thing as the blockade on Iran’s own exports.

WTI futures reopen Sunday at 6 p.m. Eastern. Sunday’s open is the first session that can test the truce hopes in Friday’s price against a reported rejection that arrived after the settlement.