For five weeks, the world's oil markets have been operating on borrowed time. Commercial reserves have been drawn down, tanker traffic has been rerouted around the Cape of Good Hope, and major importing nations have released emergency stockpiles at a pace that cannot be sustained. What traders and energy ministers alike have asked themselves, how much time until the physical crunch hits, has finally been given a definitive deadline: Tuesday at 8 pm Eastern time, when President Donald Trump’s deadline to Iran expires.

As far as the diplomatic situation goes, at least as of early Tuesday morning, it has involved deliberate distance on both sides. The Chief of Army Staff of Pakistan, Field Marshal Asim Munir, has been communicating with the US vice president, JD Vance, special envoy Steve Witkoff, and the Iranian foreign minister, Abbas Araghchi, as per the sources quoted by Reuters. A two-step plan was offered to both sides, which includes 45 days of cease-fire after which peace talks leading to a permanent solution would begin, provisionally called the "Islamabad Accord". While the reply that Trump got from Iran was termed as "significant" by him, he stated that it was "not good enough".

Energy overview ahead of deadline

Brent Crude Price per Barrel: $108–$109 (Tuesday morning); Analysts describe the current market as the "calm before the storm."

Daily oil deficit is 8 million barrels per day; Though this deficit cannot be physically compensated by reserves, logistical maneuvers from Saudi Arabia and the UAE, or releases from the International Energy Agency (IEA).

Export risk is over 80%; If Iran were to close the Strait of Hormuz and Bab al-Mandab simultaneously, more than 80% of regional oil and gas exports would be at risk.

A Brent oil price of $108 to $109 per barrel certainly qualifies as a high price range. However, experts claim that it still does not account for the risks that are prevailing at this moment. As one energy strategist put it, "This could be considered more like the eye of the storm." Azeri Light crude from Azerbaijan, a top-grade product of the Caspian that moves through Europe without passing through the Strait of Hormuz through the Baku-Tbilisi-Ceyhan pipeline, reached $142 but later fell back to about $122 to $123, according to experts who say the drop........

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