Oil Hovers Near $110 as Trumpâ€™s Iran Deadline Looms Over Hormuz Reopening

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Oil prices hovered near $110 a barrel on Tuesday as President Trumpâ€™s 8 p.m. ET deadline for Iran to reopen the Strait of Hormuz approached.
WTI crude briefly hit a four-week high above $116 a barrel before paring gains, trading in an unusual premium over Brent.
Iran rejected a US-proposed ceasefire through mediator Pakistan, demanding a permanent end to the war instead of a temporary pause.
The UN Security Council is expected to vote on a watered-down resolution to protect commercial shipping after China opposed authorising force.

Oil prices traded around $110 a barrel on Tuesday as a deadline imposed by President Donald Trump for Iran to reopen the Strait of Hormuz approached, with Tehran rejecting a temporary ceasefire and insisting on a permanent end to the war.

Brent crude futures were down 95 cents, or 0.9 percent, at $108.82 a barrel by 0920 GMT. US West Texas Intermediate crude futures hit a four-week high above $116 a barrel earlier in the session, but erased those gains to trade down 11 cents, or 0.1 percent, at $112.30.

Trump has given Iran until 8 p.m. Washington time (midnight GMT) to reopen the Strait of Hormuz, through which approximately one-fifth of global oil supply is normally shipped. Iranian forces effectively shut the strait after US and Israeli attacks began on February 28. If Tehran fails to comply, Trump warned that â€œevery bridge in Iran will be decimatedâ€ by midnight EDT on Wednesday and â€œevery power plant in Iran will be out of business, burning, exploding, and never to be used again.â€

Responding to a US proposal through mediator Pakistan, Iran rejected a ceasefire and said a permanent end to the war was necessary, pushing back against pressure to reopen the strait. The rejection leaves little room for a diplomatic breakthrough before the deadline.

The market is showing unusual signals. Typically, WTI trades at a discount to Brent, but this has reversed in a conflict where barrels for earlier delivery command a higher price. The benchmark WTI contract is for May delivery while Brent is for June delivery, reflecting how aggressively traders are pricing immediate supply risks. Spot premiums for WTI crude have surged to record highs as Asian and European refiners scramble to replace Middle Eastern flows.

Exports from several Gulf producers have already collapsed due to restricted flows through the Strait of Hormuz. A Reuters analysis found that the crisis has created financial windfalls for Iran, Oman and Saudi Arabia, while other states that lack alternative shipment routes have lost billions of dollars.

The UN Security Council is expected to vote on Tuesday on a resolution to protect commercial shipping in the strait, but in significantly watered-down form after veto-wielding China opposed authorising force, diplomats said.

Meanwhile, Saudi Arabiaâ€™s state oil company Aramco has raised the official selling price of its Arab Light crude to Asia for May delivery, setting a record premium of $19.50 a barrel above the Oman/Dubai average. OPEC+ agreed on Sunday to lift oil output quotas by 206,000 barrels per day in May, though the increase will be largely notional as key members cannot boost production because of the Hormuz closure.