25MAY

Brent prints $112.10 conflict high, reverses

3 min read

13:55UTC

Brent crude settled $112.10 on 18 May, the highest conflict-era close, then fell to $110.98 on 19 May as no executive order, OFAC general licence or White House statement followed Tasnim's sanctions-waiver report.

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ConflictDeveloping

Key takeaway

Brent paid $1.12 for waiting one session to see if Trump's post would produce paper.

Brent Crude settled at $112.10 per barrel on 18 May 2026 on ICE Futures, the highest conflict-era close on record, Trading Economics data showed. The benchmark slipped to $110.98 on 19 May after no US executive order, OFAC general licence or White House statement followed the Tasnim sanctions-waiver report from the previous session ¹.

The arc plots cleanly. Brent had been at $104.21 on 11 May , rose to $109.30 on 16 May , reached $110.30 on 18 May as ADNOC committed to doubling Fujairah throughput, and then jumped a further $1.80 to the conflict-era $112.10 print after the Trump hold-off post and the Tasnim waiver leak landed within the same trading window. The single-session reversal to $110.98 came when neither the cancelled-strike post nor the waiver text produced a corroborating document on the US side.

The asymmetry matters because of what oil traders actually bid into. ICE Brent prices the most concrete piece of paper available; a Truth Social post is parsed, but it is not signed. The $112.10 print is, on the data, the moment the market accepted a presidential utterance and an Iranian state-media leak as policy. The $110.98 settle the next day is the moment it withdrew that acceptance after waiting one session for confirming text. The spread of $1.12 between the two settles is the implied price of unverified US-side claims, which is the same spread now passing through into European petrol pumps and shipping insurance, with no Iranian or US action in between to justify it.

Deep Analysis

In plain English

Oil hit its highest price since the conflict began on 18 May $112.10 a barrel after Trump posted that he had cancelled a planned strike on Iran. The next day it fell back to $110.98 when no official US documents appeared to confirm the strike had ever been scheduled. This price swing matters because the cost of a barrel of oil feeds into the price of petrol, diesel, heating oil and anything transported by lorry or ship. A $1 move in Brent crude typically translates to about half a penny per litre at the petrol pump within two to three weeks.

Deep Analysis

Root Causes

The $112.10-to-$110.98 reversal has two separable drivers.

First, the absent OFAC general licence. OFAC issues general licences before major Iran actions to protect US persons and financial institutions transacting in adjacent markets. Zero Iran OFAC general licences were issued on 18-19 May; professional oil traders use this absence as a leading indicator that the stated action is not operationally imminent.

Second, the Tasnim sanctions-waiver report, which drove part of the 18 May spike, originated with Iran's state-adjacent news agency and was not confirmed by any US-side document. Brent had already absorbed a similar cycle in March Trump post, spike, no instrument, partial reversal and the 19 May reversal is faster and larger than the March cycle, suggesting the learning curve is steepening.

Escalation

The price action is a mirror of the political action: volatile but contained within a structural floor driven by real supply disruption. Neither the spike to $112.10 nor the reversal to $110.98 changes the IEA's assessment that the market remains in deficit through Q4 2026 even if Hormuz flows resume in June.

What could happen next?

Consequence
Professional oil traders now apply a documentary-verification discount to Trump's Iran Truth Social posts the 19 May reversal was faster and larger than the March cycle, indicating a steepening learning curve.
Immediate · 0.78
Risk
If a genuine military escalation produces a Truth Social post that markets treat as noise, the price signal that historically triggers de-escalation pressure on both sides will arrive late or not at all.
Short term · 0.65
Consequence
The structural Brent floor $10-12 above pre-conflict levels persists regardless of verbal-signal noise because the IEA has confirmed 1 billion barrels of cumulative supply loss.
Long term · 0.82

Source Landscape

This story draws on neutral-leaning sources

Primary parallel: In August 2019, Trump's tweet announcing a September tariff escalation on China moved US markets by 3% intraday; when the tariff text was published, the move held.

When subsequent tweets were not paired with published instruments, markets began a 'tweet discount' reducing the immediate price move by 40-60% compared with the first instance. The 19 May Brent reversal looks structurally similar: the oil market learning to apply a documentary-verification discount to presidential social-media posts.

Counter-parallel: The 2011 Arab Spring Brent spike when Libya output fell 1.6 million barrels per day in a matter of weeks shows that genuine supply disruptions hold their price moves regardless of political statement noise. The IEA's 14.4 million barrels per day of Gulf output shut in (ID:3314) is a real supply disruption nearly nine times the Libya magnitude, suggesting the structural floor for Brent is not subject to Truth Social calibration.

Brent's path from $104.21 on 11 May to $112.10 on 18 May represents a $7.89 per barrel week-on-week increase driven entirely by unverified verbal signals rather than any change in physical supply. The IEA's inventory data shows the structural deficit would justify $10-15 above pre-conflict prices regardless of daily signal noise.

For European refiners buying Brent-linked crude, the $1.80 single-day move on 18 May and the $1.12 reversal on 19 May represent real margin exposure: refineries that hedged on 18 May at $112.10 and saw the reversal the following session absorbed a $1.12 per barrel hedge cost on their forward positions. Across European refining capacity of roughly 14 million barrels per day, that is approximately $15.7 million in hedging friction from a single Truth Social post.

Consensus view: Goldman Sachs commodities research identifies this as the first instance in the conflict where a Trump Truth Social post moved Brent by more than $1 per barrel intraday and then saw the full move reversed in the next session by documentary absence rather than by a counter-posting or denial. The $1.12 single-session reversal on 19 May is the oil market pricing in the absent executive instrument as a signal not the Iranian response or any military development.

Counter-view: ING's commodities team in Amsterdam argues the $112.10 high itself demonstrates that Brent retains a structural $10-12 war premium above the pre-conflict $67 baseline, and the 19 May reversal to $110.98 does not represent a genuine de-escalation pricing it represents noise within a persistently elevated range driven by the IEA's confirmed 1 billion barrel cumulative supply loss .

Key tension: Whether the market's 19 May reversal means oil traders have learned to discount Trump's Truth Social posts, or whether this is a one-off calibration that will not generalise to the next post.

Sources:Trading Economics / ICE Futures·Trading Economics / ICE Futures·Trading Economics / ICE Futures

Mentions:Brent Crude →OFAC →Amsterdam →ADNOC →Truth Social →Trading Economics →Iran →White House →China →Fujairah →Tasnim →Libya →Goldman Sachs →

First Reported In

Update #102 · Iran signs Hormuz toll; Trump posts a cancelled strike

Trading Economics / ICE Futures· 19 May 2026

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Causes and effects

Caused by

Brent breaks $110, ADNOC bypasses Hormuz

Brent's $112.10 conflict-high settle followed its $110.30 close in ID:3401; the reversal to $110.98 on 19 May came when no US-side text confirmed the Tasnim sanctions-waiver report.

Occurred 18 May 2026

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Trump posts a cancelled Iran strike

Trump's Truth Social strike-cancellation post and the Tasnim sanctions-waiver report drove Brent to the $112.10 conflict high; the reversal to $110.98 came when no US-side confirmation followed.

Occurred 18 May 2026

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This Event

Brent prints $112.10 conflict high, reverses

The market priced a presidential Truth Social post and an Iranian state-media leak, then unpriced both within a single session when no US document confirmed either, setting the spread that drivers and hauliers now pay as a conflict premium.

Led to

Brent at $111, IEA at $106: the $5 gap

Brent's $112.10 conflict high on 18 May resolved to $111.22 on 19 May after Trump's verbal strike stand-down, with no signed instrument behind the reversal.

Occurred 19 May 2026

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Brent breaks $100 as insurers hold

Brent's $112.10 conflict high on 19 May (ID:3432) is the reference peak from which the $13 decline to $98.96 is measured.

Occurred 25 May 2026

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Different Perspectives

Lloyd's of London

The Joint War Committee left Hormuz war-risk premiums at $10-14 million per voyage on 25 May, declining to move on Brent's 5% fall. The JWC's protocol requires a UN Security Council resolution or bilateral government certification letter before de-listing, and neither has arrived: a verbal understanding does not satisfy the formal condition the reinsurance market's treaty terms require.

Gulf Arab producers

Saudi Arabia and UAE depend on Hormuz for their own crude exports; Aramco CEO Nasser has warned no oil market recovery arrives until 2027 if the blockade continues past mid-June. Monday's $98.96 Brent settlement shortens nothing for Gulf producers without a signed instrument and a Pentagon mine-clearance timeline that runs up to six months post-ceasefire.

Qatar

Qatar holds $12bn of frozen Iranian assets at the centre of the sequencing dispute but cannot release them without explicit US Treasury authorisation, given the original freeze was a US instrument. As the asset-holding state, Qatar's leverage is real but passive: it is the escrow holder, not the decision-maker, and any resolution requires US Treasury sign-off that Trump has withheld.

Pakistan

With both Prime Minister Sharif and army chief Munir simultaneously in Beijing on 25 May, Pakistan has for the first time consolidated its civilian and military mediation tracks under China's roof. Munir's direct Tehran-to-Beijing flight signals that the security and financial threads of the sequencing problem are now being worked in parallel rather than sequentially.

China

Beijing hosted Pakistan's principal mediators and Iran's China envoy Ghalibaf simultaneously on 25 May while its banking regulator capped new state-bank lending to five sanctioned refiners. China is simultaneously the most credible third-party underwriter of the $12bn sequencing and the state whose institutions face live OFAC secondary-sanctions exposure if the deadlock persists through GL V's expiry.

United States

Trump posted on 24 May that the blockade holds until a deal is certified and signed, ruling out the informal MOU structure both sides had been building. The 'certified, and signed' condition is the first operational bar Trump has attached in 87 days, but it arrived without an executive instrument, maintaining the gap between posted ultimatum and signed US policy.