All eyes are on what Trump will do to Iran on Tuesday night if a deal isn't reached: File Image/Pixabay.

As the clock ticked down on the deadline of U.S. president Donald Trump’s threat to increase bombing in Iran if the Strait of Hormuz wasn’t reopened, oil trading on Tuesday was surprisingly muted: as of 1326 GMT, Brent was up a mere 0.1 percent to $109.13 per barrel.

West Texas Intermediate trading was even more tepid, up 0.6 percent at $112.31 per barrel.

Sources told media that a framework was put together by Pakistan and presented to the U.S. and Iran that would result in an immediate ceasefire and reopen the Hormuz; also, the two countries and regional mediators were said to be discussing terms for a 45-day ceasefire that could lead to a permanent end to the war.

While the broad market index rose on hopes for a last-minute deal to be ratified, oil traders seemed to prefer to wait and see if Trump would hold true to his vow to destroy Iran’s power plants and bridges if  it does not reopen the Strait by 8 p.m. ET on Tuesday.

Ole Hvalbye, analyst at SEB Research, said, “The market is trying to realize what to expect going forward.”

Michael Rosen, chief investment officer at Angeles Investments, added, “The market may be underestimating the magnitude of the disruption in the world economy.”

Rosen went on to note that the “immediate and intermediate impact of the energy disruption is, I think, likely to be under appreciated by the markets, meaning energy prices staying higher for longer.”

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) agreed over the weekend to a rise of 206,000 barrels per day (bpd) for May to help make up for the shortfall of oil blocked by the Islamic republic, but the token amount prompted Janiv Shaw, analyst at Rystad Energy, to remark, “OPEC movements look to be challenged based on export availability.”

Indeed, despite Monday’s tepid trading, the premiums for WTI have soared in the spot market to a record high above key regional benchmarks, as Asia and Europe scramble for supply; traders told  media that WTI Midland is being offered for July delivery in North Asia at premiums of between $30 and $40 per barrel, depending on the benchmark against which they are marked.

Another trade source said there are also offers of WTI Midland priced $30 per barrel above Dated Brent, plus there have been offers at nearly $40 per barrel above ICE Brent for August delivery.