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European Oil Markets
15JUN

Brent at $92 as premiums idle tankers

3 min read
11:33UTC

Brent reached $92.09 on Wednesday morning, a fourth straight daily gain, while war-risk premiums of 3% to 10% of hull value keep legal cargo sitting where it is.

← Back to Longs rebuilt into an 8-week Brent lowJump to analysis ↓
EconomicDeveloping
Key takeaway

Gulf cargo stays put because of what it costs to insure, not because of what blocks it.

Brent crude traded at $92.09 at 01:30 GMT on Wednesday 22 July, up 1.2% and its highest since 11 June, a fourth consecutive daily gain 1.

War-risk premiums for a Strait of Hormuz transit now run at 3% to 10% of a vessel's hull value, against 0.25% before the war 2. On a $100 million tanker that is $3m to $10m a voyage where it used to be about $250,000. The largest vessels are quoted $10m to $14m, and the charge falls on the charterer rather than the owner.

Whoever books the ship pays that premium up front and adds it to the delivered cost of the barrels. A buyer with any alternative supplier declines the cargo, and the charter is never fixed. So a legal, licensed, fully insurable parcel of crude sits where it is, because nobody at either end of the voyage will carry a $10 million charge the barrels cannot recover. The Lloyd's Market Association is explicit that cover remains available: what suppresses transits is price and crew willingness, not capacity 3. Underwriting resets slowly, and crews have longer memories than markets.

CENTCOM (US Central Command) frames the same water differently. Its 21 July statement says US forces have facilitated the transit of roughly 900 commercial vessels and 450 million barrels of crude "since early May", redirected eight vessels and disabled one 4. No date window is attached to the 900-vessel figure, so it cannot be set against the 66% weekly fall in transits recorded on 21 July . The two counts cover different things over different periods.

In a note dated 20 July, Daan Struyven of Goldman Sachs set out an upside case of Brent above $120 by the fourth quarter, conditional on Hormuz disruption persisting and Persian Gulf flows staying below roughly 45% of pre-war levels 5. Goldman's base case is $80 in the fourth quarter and about $75 in 2027 6. The higher number describes what happens if nothing changes, not what the bank expects.

Deep Analysis

In plain English

Brent crude, the main international oil price benchmark, rose to $92.09 a barrel, its highest level since 11 June and the fourth straight daily rise. Oil often gets more expensive when investors worry that war could disrupt supply, even before that disruption actually happens. A lot of this price rise comes down to insurance, not ships actually being stopped. Sailing through the Gulf now costs shipping companies far more in war-risk insurance than before the war, and that extra cost is passed on. Insurers say enough cover is technically available, it has simply become expensive enough that some owners choose not to sail. Goldman Sachs, a major investment bank, has said oil could go above $120 a barrel later this year, but only if the situation gets significantly worse. Its actual expectation for now is closer to $80.

Deep Analysis
Root Causes

War-risk premiums of 3-10% of hull value, not a shortage of naval capacity or insurance cover, are what is keeping tankers from sailing the Gulf, according to the Lloyd's Market Association. For the largest vessels, insurers are seeking $10-14 million per Hormuz voyage, a cost charged to the charterer rather than the shipowner.

Because that liability sits with charterers and crews rather than a fixed physical bottleneck, the decision to sail is a commercial one made voyage by voyage, which is why price continues climbing even as CENTCOM reports it is still moving substantial volumes through the strait.

What could happen next?
  • Consequence

    If Gulf flows fall and stay below roughly 45% of pre-war levels through Q4, Goldman's contingent $120+ scenario becomes the operative case rather than its $80 base case.

  • Opportunity

    Because the Lloyd's Market Association says insurance capacity remains available, a de-escalation could unwind the price premium quickly, as happened after the 1990 Gulf War spike.

Sources:CENTCOM·The National·Bloomberg
Mentions:Brent Crude →Lloyd's Market Association →Daan Struyven →Goldman Sachs →CENTCOM (US Central Command) →Strait of Hormuz →Persian Gulf →Kuwait →Brent-WTI →
First Reported In

Update #159 · A second strait closes by radio alone

CENTCOM· 22 Jul 2026
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Causes and effects
Caused by
Hormuz crossings fall by two thirds
The 66% weekly fall in Hormuz transits recorded on 21 July is the baseline against which the 22 July Brent rise and CENTCOM's throughput claim are measured.
Occurred 21 Jul 2026
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This Event
Brent at $92 as premiums idle tankers
Insurance pricing rather than naval capacity is what stops the ships, which is why Gulf traffic will not snap back when the shooting stops.
Led to
Brent tops $100 as the reroute closes
Brent's rise past $100 advances directly from the prior day's $92.09 close.
Occurred 22 Jul 2026
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Different Perspectives
Sanctions compliance officer reviewing a Lukoil International GmbH bid
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OFAC's amended FAQ 1224 gives a compliance desk its first published standard: full severance from Lukoil and a US-jurisdiction blocked account for sale proceeds. The conditions name neither ISAB nor Italy, so a Priolo Gargallo-linked bid answers a different question than a Neftochim Burgas or Petrotel Ploiesti one.
Managed-money funds on Brent Last Day
Managed-money funds on Brent Last Day
CFTC data for the week to 21 July showed managed money flipping 74,400 contracts to a net long of 15,665 against 1,410 short on the Brent Last Day contract, code 06765T. A fund that held that short through July has now covered it, and the spent short base raises the bar for the next leg higher.
Saudi crude exporters
Saudi crude exporters
Saudi-linked tanker transits through Bab el-Mandeb fell to about 7.5 a day after the 24 July underwriting withdrawal, pushing more barrels onto the longer route round the Cape or through the Yanbu terminal. Every diverted barrel ties up a ship for longer, and a fleet that turns slower charges more.
Tanker owners on the Bab el-Mandeb route
Tanker owners on the Bab el-Mandeb route
Lloyd's-market syndicates withdrew war-risk cover from Saudi-linked hulls on 24 July, leaving owners of that class of vessel to sail Bab el-Mandeb uninsured or not at all. Tanker transits on the route fell to roughly 7.5 a day, and cover, once withdrawn, does not return on a shipowner's timetable.
Eni
Eni
Eni's board approved second-quarter results on 29 July, swinging refining EBIT to a EUR0.08bn profit from a year-earlier loss even as group profit doubled, and named Red Sea freight cost as a cap on that improvement. A refiner absorbing higher shipping costs on Saudi-linked crude while its numbers improve treats the freight line as a drag, not a crisis.
Asian buyers (India, Japan, China, South Korea)
Asian buyers (India, Japan, China, South Korea)
Asian refiners are absorbing 62% of Yanbu's 3.75m b/d flow, the bulk of Saudi Arabia's rerouted crude now clearing east rather than into the Atlantic basin. That destination split leaves Asian buyers more exposed to any single Yanbu-specific disruption than under the kingdom's normal multi-terminal export pattern.