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Iran Conflict 2026
10MAY

Aramco warns of a 17.5% shock

4 min read
14:22UTC

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

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CNBC· 12 May 2026
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Different Perspectives
Oil markets / Lloyd's of London
Oil markets / Lloyd's of London
Brent fell to near $87.33 on 80 per cent deal-probability pricing, but Lloyd's has not de-listed Hormuz from its war-risk register and shipping diversions continue at 139 vessels. Insurance markets are lagging futures: physical risk remains while financial markets have spent the good news before the paper exists.
India
India
Modi is expected to raise the deaths of three Indian sailors in the 11 June CENTCOM strike on the MT Settebello with Trump at G7 sidelines, the first non-party leader to put the blockade's human cost into a formal bilateral. New Delhi is also a major Iranian oil buyer whose import volumes the sanctions-relief terms will govern.
Israel (Netanyahu)
Israel (Netanyahu)
Netanyahu stated Israel is not party to the deal on 12 June; Defence Minister Katz ruled out the Lebanon withdrawal Iran's draft demands, inserting a third blocker the US-Iran negotiating channel cannot resolve. Israel's position tethers Hormuz reopening to a Lebanon settlement Washington has not brokered.
Pakistan (mediator, Sharif/Naqvi)
Pakistan (mediator, Sharif/Naqvi)
Sharif declared a final agreed text on 12 June before either principal confirmed it, running two Tehran visits in under a week without securing a written IRGC or Khamenei response. Islamabad's incentive to claim a diplomatic win outpaces its standing to deliver either capital's signature.
Iran foreign ministry (Araghchi)
Iran foreign ministry (Araghchi)
Araghchi declared digital signing within days while setting dilute-in-Iran as a non-negotiable red line on the 440.9 kg HEU stockpile, a standing Tehran position he cannot override without authorisation from Khamenei, reachable only by courier. The FM track is sprinting to close before the IRGC reasserts control.
Trump administration / CENTCOM
Trump administration / CENTCOM
Vance called the deal still TBD on 12 June while CENTCOM downed Iranian drones over Hormuz for a second consecutive night and the White House register stayed blank. Washington holds the ship-out position on HEU and has not signed an Iran instrument in over 100 days of conflict.