WTI Extends Selloff Below $108 as Pakistan's Two-Week Ceasefire Bid Gains Traction

Pakistan's Last-Minute Bid

Pakistan's PM Shehbaz Sharif made a direct public appeal to Trump on Tuesday, asking for a two-week extension of the 8 PM ET deadline and urging Iran to reopen the Strait of Hormuz for a corresponding period as a "goodwill gesture." The White House confirmed Trump was "made aware of the proposal." A senior Iranian official told Reuters that Tehran was "positively reviewing" the request.

This is a meaningful step beyond Sunday's Islamabad Accord framework, which Iran rejected on the grounds that it wouldn't reopen the Strait under a temporary truce. The two-week ask is narrower and more concrete — and the fact that Iran didn't immediately reject it is what the oil market is reacting to.

Separately, Iran conveyed a 10-point peace plan through Pakistan on Monday. Trump called it a "significant step" but "not good enough." The specifics remain unpublished, but reported elements include safe passage protocols for the Strait, sanctions relief, and reconstruction assistance.

Hormuz Transit Picks Up

The most underreported data point in the session: eight tankers transited the Strait of Hormuz on Monday, up from an average of fewer than two per day in March. That's still a fraction of the pre-war flow — roughly 20 million barrels per day moved through the waterway in 2025 — but it signals that Iran's blockade is loosening in practice even as Tehran rejects a formal reopening at the negotiating table.

Iran's selective passage policy — allowing Omani, French, and Japanese vessels through while maintaining the blockade posture — gives Tehran diplomatic flexibility. It can claim the Strait remains closed while incrementally reducing the supply shock that's been keeping crude elevated since late February.

What the Market Is Pricing

CL traded a $117.57-to-$107.20 range on Tuesday — a 9% intraday swing that reflects genuine uncertainty about what happens after the 8 PM deadline. The post-settlement slide to $107.20 suggests the market is leaning toward de-escalation: either Trump accepts the two-week extension, or the threatened infrastructure strikes don't materialize at the scale promised.

But the risk is asymmetric. Today's U.S. strikes on Kharg Island — the facility handling 90% of Iran's crude exports — showed Washington is willing to put ordnance near energy infrastructure. Production shut-ins across the Gulf are already projected at 9.1 million barrels per day for April. If the deadline passes without a deal and strikes escalate to bridges and power plants, the war premium snaps back fast. The market is betting on diplomacy. It's not a confident bet.

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