Oil Prices Hold Steady as Hormuz Ceasefire Deadline Looms

Global oil prices showed little change in early Tuesday trading, with market attention fixed on the imminent expiration of a U.S.-Iran ceasefire and its implications for the critical Strait of Hormuz. West Texas Intermediate (WTI) crude was virtually flat at $87.43 per barrel, up just one cent. Brent crude, the international benchmark, saw a slight increase of 14 cents to $90.57. Natural gas prices dipped two cents to $2.67.

The price stability belies significant market tension, according to analysts. "Don't mistake easing oil prices for calm," SEB Commodities Analyst Ole R. Hvalbye warned in a note summarized by Rigzone.

The primary focus is the two-week ceasefire, set to expire Wednesday evening Washington time. According to OilPrice.com, U.S. President Donald Trump stated it is "highly unlikely" he would extend the truce without a deal. He affirmed the U.S. would maintain its naval blockade outside the Strait of Hormuz, a chokepoint for roughly a fifth of global oil supply. "I'm not opening it until a deal is signed," President Trump told Bloomberg News.

The closure has already dramatically reshaped global trade flows. Data from OilPrice.com shows India's total crude imports fell 13% in March to 4.5 million barrels per day (bpd) as Middle Eastern supply was crippled. Imports from the region plunged 61% to 1.18 million bpd. To compensate, Indian refiners snapped up Russian crude, with imports nearly doubling to 2.25 million bpd in March under a U.S. waiver. The waiver was extended this past weekend for an additional two weeks until mid-May.

Iranian officials have linked the strait's security to their own oil exports. "The security of the Strait of Hormuz is not free. One cannot restrict Iran’s oil exports while expecting free security for others," Iran’s First Vice President Mohammad-Reza Aref wrote on social media.

For Bakken producers, the immediate impact is reflected in the regional differential. Bakken crude was priced at a discount of $3.42 per barrel versus WTI on Tuesday. While the discount persists, the relative stability in benchmark prices provides a predictable, if not spectacular, pricing environment. However, the situation remains precarious. A breakdown in talks and a prolonged closure of the Strait of Hormuz would likely trigger a sharp increase in global benchmarks, which could improve netbacks for Bakken barrels despite potential widening in the differential due to midcontinent logistics.

The current market is in a holding pattern, with slight price dips in Asia attributed to cautious optimism that negotiations will resume. ING commodities strategists noted the action reflects "hopes of progress... Too much hope, perhaps." The coming 24-48 hours will determine whether the market's calm is shattered or if a path toward reopening the vital waterway is found.