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Iran Conflict 2026
11JUN

Brent closes $107.05 into Beijing summit

3 min read
09:17UTC

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
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.