Brent Snaps Back to $111 After Iran Rejects Ceasefire Ahead of Trump's Hormuz Ultimatum

The Ceasefire That Wasn't

Brent pulled back to $107.80 earlier on Sunday after reports surfaced of a 45-day ceasefire framework being negotiated through Pakistani, Egyptian, and Turkish mediators — the first structured truce proposal since Iran sealed Hormuz in March. The selloff lasted hours. Iran's foreign ministry spokesperson rejected the framework as "illogical," stating that agreeing without guarantees against future strikes would be irrational. Tehran also rejected the US 15-point peace proposal outright, calling it "unrealistic, illogical, and excessive."

This is now the established pattern: ceasefire headline hits, oil dips, Tehran denies, price snaps back. It played out identically on April 3 when IEA warnings briefly pushed Brent to $108.30 before the next escalation headline pulled it higher. Traders pricing in diplomatic resolution keep getting burned.

Trump's Fourth Deadline

Trump set an 8pm ET Tuesday deadline for Iran to reopen the Strait of Hormuz — his fourth such ultimatum since the conflict began in late February. The rhetoric this time is more specific than previous rounds: Trump told the Wall Street Journal the US will destroy "every power plant" and "every bridge" in Iran if no deal is reached. A White House official warned Iran would be "sent back to the stone ages."

Iran countered with its own terms. Trump called the response "not good enough" but acknowledged it represented "a significant step" — the most conciliatory language he's used since the war started. Whether that signals genuine movement or another cycle of threats and non-compliance is what the market is trying to price at $111.

The Physical Squeeze

The headline risk around deadlines and ceasefire proposals obscures the underlying physical reality: the Strait of Hormuz is functionally closed. Only 35 ships transited over Easter weekend compared to 150+ daily before the war. A narrow "Larak corridor" overseen by the IRGC permits select Chinese, Russian, and Indian vessels, but mainstream commercial traffic remains shut out.

The IEA warned last week that April will be worse than March because the last Hormuz transit cargoes loaded before the blockade have now all been delivered — there is no buffer left. Oil is up roughly 55% since late February, and crude has doubled from year-start levels. JP Morgan projects $150 if Hormuz remains closed through mid-May. Analyst Tom Kloza noted that getting below $100 per barrel requires not just a ceasefire but genuine flow resumption — "a long haul from now."

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