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Iran Conflict 2026
12MAR

Brent closes $107.05 into Beijing summit

3 min read
05:10UTC

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
IAEA
IAEA
Director General Rafael Grossi appeared in person at the UNSC on 19 May and warned that a direct hit on an operating reactor 'could result in very high release of radioactivity'. The session produced a condemnation record but no resolution, and the Barakah perimeter was already struck on 17 May.
Hengaw (Kurdish rights monitor)
Hengaw (Kurdish rights monitor)
Hengaw documented three judicial executions and the detention of Kurdish writer Majid Karimi in Tehran on 19 May, establishing Khorasan Razavi province as the newest geography in Iran's wartime judicial record. The organisation's Norway-based operation continues to surface a domestic repression track running in parallel with every diplomatic and military development.
India
India
Six India-flagged vessels conducted a coordinated cluster transit under PGSA bilateral assurances during the 17 May window, paying no yuan tolls. New Delhi's inclusion in Iran's state-to-state passage track insulates Indian energy supply without requiring endorsement of the PGSA's yuan-toll architecture or alignment with the US coalition.
Pakistan
Pakistan
Pakistan is the only functioning diplomatic bridge between Tehran and Washington. Its role is relay, not mediation in the settlement sense: it conveyed Iran's 10-point counter-MOU in early May, relayed the US rejection, and is now passing 'corrective points' in the third documented exchange of this sub-cycle without either side working from a shared text.
UK and France (Northwood coalition)
UK and France (Northwood coalition)
Twenty-six coalition members have published no rules of engagement eight days after the Bahrain joint statement; Lloyd's underwriters have conditioned war-risk reopening on written ROE from either Iran or the coalition. Italian and French mine-countermeasures deployments are operating on the in-water clearance task CENTCOM Admiral Brad Cooper's 90% mine-stockpile claim does not address.
Saudi Arabia
Saudi Arabia
Riyadh has not publicly commented on the Barakah strike or the 50-47 discharge vote. Saudi output feeds the IEA's $106 base case; the $5 Brent premium above that model reflects institutional uncertainty no Gulf producer can compress through supply adjustment alone.