Skip to content
Foundations rebuilt, and the first new thing is here: search across every topic, entity, and event.Try search
Iran Conflict 2026
11JUN

Aramco warns of a 17.5% shock

4 min read
09:17UTC

Brent crude settled at $104.21 on Monday, up $2.92 on Trump's verbal alone. Saudi Aramco chief executive Amin Nasser said the market is losing roughly 100 million barrels of supply each week, with prolonged disruption pushing any normalisation into 2027.

ConflictDeveloping
Key takeaway

Brent at $104 prices Trump's words; Aramco's 100 million barrels per week implies a 17.5% unpriced shock.

Brent Crude settled at $104.21 on Monday 11 May, up $2.92 (2.9%) on $101.29 the previous session 1. The move broke the $101 floor that had held through Friday's bulk-carrier strike near Doha, the Mokhber doctrine declaration and the IRGC firing-order threat . Nothing signed underwrote the spike: it came on Donald Trump's Oval Office verbal statement, with no executive order, deployment directive or CENTCOM operational order behind it. Brent traded above $94 on Tuesday morning, holding most of Monday's gain.

Saudi Aramco chief executive Amin Nasser said the same day that the market is losing roughly 100 million barrels of supply each week and that prolonged disruption could push any normalisation into 2027 2. That weekly loss roughly equals Saudi Arabia's full weekly output. Translated into a daily run rate against the notional 80 million barrels per day global crude base, Nasser's number implies a 17.5% supply shock against a curve that has not priced it.

Brent at $104.21 prices the market's probability-weighted average of paper outcomes, not Nasser's physical-market reading; priced literally, Nasser's number justifies materially higher Brent. The ceiling holds while Wall Street still expects a deal; it breaks upward if Trump signs a bombing order on his Friday return, or downward if he signs a written counter-text. For UK consumers the lag template is already running: the $4.54 per US gallon pump benchmark hit on 8 May is the precedent forecourts will follow within a fortnight, putting roughly £1.78 per litre on UK pumps before the Beijing trip closes.

Deep Analysis

In plain English

The price of oil went up sharply on 11 May after Trump's tough statements about Iran. It reached $104.21 per barrel, breaking through a floor of about $101 that had held for several days. The CEO of Saudi Aramco; the world's largest oil company; said the world is losing around 100 million barrels of oil supply every week because of the Hormuz disruption. He warned it could be 2027 before the situation returns to normal. For ordinary people, this means petrol and diesel prices could rise further over the coming weeks if the situation does not improve. Oil prices that stay above $100 for an extended period push up the cost of transport, heating, and most goods that need to be shipped.

Deep Analysis
Root Causes

The Strait of Hormuz carries approximately 21 million barrels of oil per day in normal conditions; roughly a quarter of global seaborne crude. Iran's Persian Gulf Strait Authority has imposed a toll and registration requirement that most Western-flagged carriers have not complied with, effectively reducing transit to a fraction of pre-war volumes.

Saudi Aramco's export routes do not depend on Hormuz for the majority of its exports via the East-West pipeline to Yanbu on the Red Sea, but Aramco ships roughly 7 million barrels per day that do transit the strait; giving Nasser's 'market is losing supply' framing a direct commercial basis, not merely geopolitical observation.

The oil market's difficulty pricing the disruption reflects genuine uncertainty about whether a deal materialises this week or in three months: two scenarios produce $75 and $120 Brent respectively, so the $104 settlement is arithmetically the probability-weighted midpoint.

What could happen next?
  • Consequence

    Sustained Brent above $100 triggers fuel surcharge reviews at major freight carriers. US, UK, and EU logistics cost indices will absorb the move within 30 days.

    Short term · 0.85
  • Risk

    A 2027 normalisation scenario; if Nasser's guidance is treated as credible; would prompt hull and cargo insurers to reprice annual premiums at Q3 2026 renewal cycles, adding $15-25 per barrel in effective delivered cost for Asian buyers.

    Medium term · 0.6
  • Opportunity

    The $101 floor breaking higher gives US negotiators a price signal they can present to Iran: a deal that reopens Hormuz produces immediate Brent compression to $85-90, saving Tehran from the inflationary oil-price feedback on its own import costs.

    Short term · 0.65
First Reported In

Update #95 · OFAC opens the Hong Kong door

CNBC· 12 May 2026
Read original
Different Perspectives
Oil markets / Lloyd's underwriters
Oil markets / Lloyd's underwriters
Futures markets priced CENTCOM's strikes-complete statement as a de-escalation signal and pushed Brent down 1.7 per cent to $94.71, even as the IRGC declared Hormuz closed. Lloyd's war-risk premiums held elevated because institutional de-listing requires a UN Security Council resolution that Russia and China have just shown they will block.
Pakistan (mediator)
Pakistan (mediator)
Interior minister Mohsin Naqvi carried dual civilian and military letters to Mojtaba Khamenei in Tehran on 6-7 June with no public response. The IRGC's Hormuz closure on 11 June shows the corps is acting independently of the channel Pakistan is using, making the mediation structurally unable to produce a binding commitment without direct IRGC access.
Russia and China
Russia and China
Russia and China voted against GOV/2026/40 at the IAEA Board, following through on the blocking position coordinated with Grossi in Geneva on 5 June; both states continue to oppose Western institutional pressure on Iran at every multilateral venue.
E3 and IAEA (UK, France, Germany)
E3 and IAEA (UK, France, Germany)
The E3 co-sponsored IAEA resolution GOV/2026/40, adopted 21-3-10 on 10 June, demanding Iran disclose 440.9 kg of unaccounted HEU and admit inspectors to four denied facilities. The 10 abstentions and Russia-China noes leave any Security Council referral without a viable enforcement path.
IRGC / Iran military command
IRGC / Iran military command
The corps declared Hormuz closed to all traffic on 11 June and claimed two vessels struck, overriding the MoU its own civilian negotiators were pursuing through Pakistan. The closure order used the Persian Gulf Strait Authority apparatus to convert a toll mechanism into a military prohibition.
Trump administration / CENTCOM
Trump administration / CENTCOM
CENTCOM completed a second day of strikes on Tehran, Sirik and Minab, rejected the IRGC Hormuz closure as inconsistent with observed transit, and said strikes were complete. Hegseth framed the bombing explicitly as the negotiation: the method is coercive deal-making with no stated pause threshold.