Skip to content
You can now search across every topic, entity and event.What's new
Iran Conflict 2026
28JUN

Brent whipsaws as spreads ignore deal

4 min read
12:05UTC

Brent fell to $77.73 on 18 June as the US-Iran framework signed, bounced to $80.57 when the Switzerland talks collapsed, then eased near $80, while the structural spreads barely moved.

ConflictDeveloping
Key takeaway

Brent oscillated on diplomacy while Brent-WTI and the Brent-Dubai EFS stayed flat, refusing the war premium.

Brent crude fell through its 17 June three-month low of $78.96 to $77.73 a barrel in Asian trade on 18 June as the US-Iran framework signed, then bounced to $80.57 on Friday 19 June when the Switzerland technical talks collapsed, and eased back near $80 by 22 June 1 2. Brent is the global benchmark that prices roughly two-thirds of traded crude. The two-day oscillation netted a subdued move, leaving it barely above the level it had broken a week earlier when it dropped 4% to $85.80 intraday on 12 June .

The structural spreads tell the real story, because they barely re-priced. Brent-WTI, the gap between the European benchmark and US West Texas Intermediate, held near $3 a barrel at the lower end of its $3 to $4 band, with WTI still tightened by the run of weekly US crude draws 3. The Brent-Dubai EFS, the exchange-of-futures-for-swaps spread that measures relative demand between Atlantic and Gulf crude grades, did not re-widen on the reopening.

A desk that wanted to put Hormuz risk back on after one failed negotiation would have paid up through the EFS to do it, and it did not. Flat price is the only thing the framework moved, and it moved it by a net $1.61 a barrel off the 17 June low. The spreads that price the physical and relative-demand reality stayed where they were, which is the market declining to re-price a war premium on a single collapsed session.

Deep Analysis

In plain English

Two numbers help explain why the oil price barely moved when a ceasefire was announced. First, Brent crude fell to $77.73 when the deal was signed on 18 June, then jumped back to $80.57 when peace talks collapsed the next day, and then eased near $80 by 22 June. The net move over five days was small because traders had already guessed what would happen: they sold in advance when talks looked likely, and bought back when they fell apart. Second, a specialist price gap called the Brent-Dubai spread failed to re-widen when the Hormuz news landed. That spread measures whether Asian or Atlantic crude buyers are more eager. Its failure to move means Asian buyers (mainly China) were not rushing to bid for Gulf oil even when a ceasefire seemed possible, because they had already filled their storage tanks and reduced purchases.

Deep Analysis
Root Causes

Brent's two-day oscillation between $77.73 and $80.57 netted a subdued $1.61/bbl move for three structural reasons.

The CFTC's week-to-9-June data showed WTI managed money had rebuilt to +94,725 net long at entries well above current screens, meaning a large position sat on $15-18 adverse moves as Brent approached $77.73. That trapped-long overhang capped the rally from the MOU signing: covering rather than adding was the rational trade. The 20 June COT report (delayed to 22 June by Juneteenth) was the decisive position-flush data point not yet available in this window.

Simultaneously, the Brent-Dubai EFS failed to re-widen on the MOU signing because the Brent-Dubai differential responds to Asian vs Atlantic crude demand, not to Gulf supply expectations alone. With Chinese seaborne imports at their lowest May level in nearly a decade, the EFS had no demand-side catalyst to widen on an optimistic political reading of supply.

The Lukoil-ISAB GL 131F clock running to 27 June provided a competing supply-loss risk that partially offset the Hormuz-easing thesis in the same session window.

What could happen next?
  • Consequence

    The CFTC COT for the week to 17 June (delayed to 22 June by Juneteenth) will show whether the $94,725 WTI managed-money net long was flushed in the $15-18 adverse move. If the long was cleared, there is no residual position overhang to cap a rally on genuine Hormuz reopening news.

  • Risk

    If the Lukoil-ISAB GL 131F clock lapses on 27 June without an OFAC transaction licence (ID:4330), the 320kbd Priolo Gargallo refinery faces stranding, creating a discrete European product-supply shock that flat-price crude markets have not priced.

First Reported In

Update #10 · Hormuz opened on paper, freight said no

Al Jazeera· 22 Jun 2026
Read original
Different Perspectives
Oil market and P&I insurers
Oil market and P&I insurers
Brent cleared $87 intraday only once CENTCOM's blockade became physical rather than declared, even though P&I Clubs had already excluded Hormuz war risk a week earlier on 7 July: capital hedged ahead of enforcement, but prices moved only after it.
UAE reporting
UAE reporting
UAE reporting placed the Omani tanker deaths at one seafarer against the International Maritime Agency's count of two, the first time in this war that a Gulf state's casualty figures have diverged from an international monitor's.
Jordan
Jordan
Iranian strikes reached Jordan again on 14 July as part of the Gulf-wide retaliation for the Hormuz blockade, extending the conflict's geographic footprint to a state with no direct stake in the strait itself.
Bahrain
Bahrain
Bahrain sounded air-raid sirens on 14 July during Iran's Gulf-wide retaliation, the same day CENTCOM's blockade order and fourth night of strikes pushed the conflict's physical reach into the wider Gulf littoral.
Kuwait
Kuwait
Kuwait intercepted Iranian missiles and drones on 14 July as Tehran's blockade retaliation reached Gulf states beyond Iran's immediate shoreline, confirming Kuwaiti airspace now sits inside Iran's retaliatory envelope.
Oman
Oman
Oman absorbed the war's first tanker casualties in its own waters on 14 July, with two supertankers disabled and seafarers killed, putting the sultanate's shipping lanes directly in the path of the blockade fight for the first time.