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Iran Conflict 2026
1JUN

Brent closes $107.05 into Beijing summit

3 min read
08:32UTC

Brent crude closed $107.77 on 12 May on Trump's verbal rejection of Iran's 10-point MOU reply via Pakistan, then settled at $107.05 on 13 May. Goldman Sachs and Morgan Stanley flagged a structural Hormuz premium that will outlast any ceasefire.

ConflictDeveloping
Key takeaway

Brent closed $107.05 on 13 May, $2.84 above the 11 May ceasefire-alive baseline.

Brent Crude closed at $107.77 on 12 May 2026, a 3.4 per cent jump on Trump's verbal rejection of Iran's 10-point MOU reply via Pakistan , then settled at $107.05 on 13 May 1. That is $2.84 above the $104.21 close that priced the ceasefire as still alive . The verbal rejection had no signed instrument behind it; the price still moved as if one had been signed against the ceasefire.

Brent is the global oil benchmark; roughly two-thirds of internationally traded crude prices off it, as do European retail diesel and the wholesale gas contracts that feed UK household bills. For UK drivers that translates to a pump price around £1.55 per litre through summer; for UK consumers on index-linked tariffs it adds roughly £180 a year to a typical household gas bill via the wholesale contracts that price off Brent. Traders are pricing both Trump's 11 May "life support" remarks on the ceasefire and the OFAC Hong Kong designations two days later .

Goldman Sachs and Morgan Stanley both noted on 13 May that the structural Hormuz premium will persist beyond any ceasefire because P&I (Protection and Indemnity) insurers cannot reopen war-risk cover for the strait until written rules of engagement exist for the European mission and the US blockade. The insurance freeze, not summit hope, sets the floor for Brent through the rest of May. The market is pricing the absence of signed paper for the rest of May.

Deep Analysis

In plain English

The price of oil on world markets is tracked via a benchmark called Brent crude. When Brent goes up, everything that uses oil, including petrol, diesel, home heating, and many food products, tends to get more expensive too. Brent closed at $107.05 on 13 May. Before the Iran conflict began about 75 days ago, it was around $67. That $40 difference is being called the "Hormuz premium", the extra cost the market adds because nobody can get war-risk insurance to ship oil through the strait right now. Two big investment banks, Goldman Sachs and Morgan Stanley, said on 13 May that this premium will not go away just because a ceasefire is signed. The shipping insurance industry needs to see written rules about how the strait will be managed before they will insure tankers again. Until that paperwork exists, oil stays expensive.

What could happen next?
  • Consequence

    The two-layer Brent premium, kinetic and structural insurance, means a signed ceasefire alone will not restore pre-war pump prices; the insurance layer requires a separate written rules-of-engagement document from the European coalition.

  • Risk

    UK Q3 2026 Ofgem price-cap calculations will incorporate the current Brent forward curve, locking elevated household energy costs through September 2026 regardless of any ceasefire signed in May or June.

First Reported In

Update #96 · Hegseth: no AUMF needed. Trump flies east

CNBC· 13 May 2026
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Different Perspectives
Human rights monitors (Hengaw, Amnesty International, Iran HRM)
Human rights monitors (Hengaw, Amnesty International, Iran HRM)
Monitors documented a second death sentence for Zahra Tabari, 68, reported cemetery record deletions at Behesht-e Zahra, and a poll showing 81.5% of medical residents want to emigrate, against a background of 200+ confirmed executions since February. Iran's security courts operate at uninterrupted wartime tempo regardless of the diplomatic track.
Pakistan (mediator)
Pakistan (mediator)
Islamabad carried Trump's revised MOU demanding HEU destruction to Iranian negotiators, formally inheriting the role of sole active mediator after Oman's forced withdrawal. Pakistan lacks Oman's banking infrastructure for frozen-asset routing and carries its own regional stakes, making it a less structurally neutral broker.
Kuwait
Kuwait
Kuwait intercepted Iranian missiles and drones for a second time in days on 1 June, with air-raid sirens sounding nationwide, after invoking Article 51 self-defence on 28 May following the Ali Al Salem ballistic-missile strike. The repeated interceptions test whether Kuwait's domestic politics can sustain hosting US forces as a de facto co-belligerent.
China (PRC)
China (PRC)
Beijing sent scholars to Shangri-La rather than its defence minister and addressed Taiwan without mentioning Iran, maintaining bilateral energy corridor protection with Tehran while refusing diplomatic exposure at multilateral forums. Trump barred China as an HEU custodian on 27 May, removing Beijing from the deal architecture while China continues supplying DPI hardware that caps Iran's internet.
Lloyd's of London / war-risk underwriters
Lloyd's of London / war-risk underwriters
Lloyd's held its Hormuz war-risk designation at $10-14 million per voyage while Brent recovered to $93.91, maintaining the structural divergence from futures pricing that has persisted since late May. Underwriters require a UN Security Council resolution or government certification letter, not diplomatic optimism.
Gulf Cooperation Council states (Saudi Arabia, UAE, Bahrain, Qatar)
Gulf Cooperation Council states (Saudi Arabia, UAE, Bahrain, Qatar)
Five Gulf states wrote to the IMO on 21 May rejecting Iran's PGSA transit authority over international waters; Saudi Arabia and the UAE have not confirmed participation in the European Hormuz mission. The GCC is navigating between US security guarantees and exposure to Iranian fire, with no Gulf state formally co-belligerent except Kuwait.