Trump's April 6 deadline for Iran to reopen the Strait of Hormuz arrived Monday with no deal in sight. By afternoon, the president had already moved the goalpost: Tuesday at 8 p.m. eastern time.
WTI crude spiked to $115.48 in early trading before pulling back to $112.37 as traders processed competing signals - war threats from Washington, rejection from Tehran, and a last-ditch ceasefire framework from Islamabad.
Brent traded at $109.62, up 0.59% on the session.
The ceasefire that wasn't
Pakistan, Egypt and Turkey spent the weekend drafting what diplomats are calling the "Islamabad Accord," a two-phase plan to end the war. Phase one: an immediate ceasefire and full reopening of the Strait of Hormuz. Phase two: 15 to 20 days of talks toward a permanent settlement covering sanctions relief, frozen assets, and Iran's nuclear program.
Pakistan's Foreign Ministry confirmed that the plan was shared with both Washington and Tehran late Sunday night. Army chief Field Marshal Asim Munir spent the night working the phones, shuttling between calls with US Vice President JD Vance and special envoy Steve Witkoff on one side and Iranian Foreign Minister Abbas Araghchi on the other, The Express Tribune reported.
Tehran's answer came fast. Foreign ministry spokesperson Esmail Baghaei said Iran would not reopen the strait as part of any temporary ceasefire, arguing it would give Washington and Tel Aviv time to regroup. A senior Iranian official told Reuters that Washington has not shown it is serious about ending the war for good.
"The Strait of Hormuz will open when all the damage caused by the imposed war is compensated through a new legal regime," the official said.
Trump's response was blunter. He told Axios the proposal was "not good enough, but a very significant step." On Truth Social, he warned that Tuesday would be "Power Plant Day, and Bridge Day, all wrapped up in one, in Iran."
What Tuesday means
The threat is specific. Trump has warned repeatedly that he will order strikes on Iran's power grid, bridges, and desalination plants if the strait stays closed. He first set a March 21 deadline for the same threat. Then he pushed it to late March. Then to April 6. Now Tuesday.
Each extension has followed the same pattern: a mix of backchannels, ultimatums, and social media posts that swing between deal-making and destruction. The market has learned to price in both delay and escalation, which explains Monday's whipsaw - a $3 spike at the open, then a $3 retreat as ceasefire headlines rolled in.
NBC News reported that Trump told advisers he wants to "finish it up" before midweek. The Pentagon has positioned assets for strikes, but no execute order has been issued as of Monday evening, according to CNN.
Iran's leverage
Tehran is betting that the strait is worth more as a bargaining chip than as a shipping lane. By keeping Hormuz closed, Iran has removed roughly 20% of global seaborne oil from the market and driven crude above $110.
Iran is also working a parallel track. Tehran and Oman are working on a joint framework that would force ships to get clearance from both countries before entering the strait. Analysts warn the arrangement could outlast the war itself, giving Tehran a permanent say over who sails through the world's most important oil chokepoint.
Iran has already granted selective transit rights to ships flagged by China, Russia, India, Iraq, Pakistan, the Philippines, Malaysia, and Thailand. Everyone else stays out.
Where it stands
Three things happen in the next 30 hours. Pakistan continues lobbying both sides to accept the framework. Trump's Tuesday deadline arrives. And the market decides which scenario to price.
If strikes hit Iran's power grid, the conflict deepens and Hormuz stays shut. JPMorgan's $150 oil forecast moves from outlier to baseline. If a deal materializes, even a partial one, Brent could drop toward the $85 to $90 range where the back of the futures curve has been sitting for weeks.
Monday ended without resolution. Day 37 of the war, and the strait is still closed.