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Iran Conflict 2026
16MAY

Brent settles $105.30 with no fresh seizure

3 min read
12:41UTC

Brent crude settled at $105.30 on 25 April with intraday prints above $106 and a weekly gain of roughly 18%. The talks collapse alone is now the bullish driver, not fresh kinetics.

ConflictDeveloping
Key takeaway

Brent at $105 has been repriced as the baseline; future incidents push from there, not from $67.

Brent crude settled at $105.30 on 25 April with intraday prints above $106 and a weekly gain of roughly 18% per The National 1. This is the second consecutive session above $105, 57% above the $67.41 pre-war baseline and a continuation from the $105.73 close on 24 April . No new IRGC seizure occurred on 25 April, and the dark-shipping picture from the Larak-Qeshm carve-out was unchanged.

The price moved on the absence of a diplomatic resolution rather than on a fresh provocation. That is a structural shift: the market has stopped treating each diplomatic failure as a temporary setback and is pricing the absence of a resolution track as the default scenario. The repricing matters because future seizures will now push the price from $105 rather than from $67, amplifying the economic shock of any tactical escalation. UK and European pump prices follow Brent with a one-to-two-week lag.

The options curve confirms the shift. With the baseline reset, any de-escalation announcement becomes disproportionately bearish rather than merely corrective, which makes the political incentive structure for Tehran and Washington asymmetric: Iran loses revenue floor on a deal, and US consumer pump prices ease only after a deal is concrete enough to clear forwards. Brent at $105 is the new floor, not a ceiling.

Deep Analysis

In plain English

The price of oil affects almost everything: petrol at the pump, heating bills, the cost of goods moved by truck or ship. The benchmark price for much of the world's oil is called 'Brent crude', named after a North Sea oil field. Before the Iran war began, Brent was around $67 a barrel. On 25 April it closed at $105.30. That is a rise of nearly 57%, and it happened in under two months. Oil markets usually react strongly to specific events (a ship seized, a factory bombed). What is significant about Saturday's price is that nothing new happened: no IRGC boarding, no strike, no military escalation. The price stayed above $105 purely because traders stopped believing the war would end soon. When the diplomacy collapses and traders update their expectations, prices move even without a physical event.

Deep Analysis
Root Causes

Each Islamabad channel failure narrows the oil market's probability distribution around a near-term diplomatic resolution. When Islamabad 3 collapsed via Trump's Truth Social post, traders priced the event harder than a formal diplomatic postponement would have warranted, because a social-media cancellation carries no institutional machinery for reversal.

The ceasefire is nominally in force, but CENTCOM's interdiction count reached 33 on 25 April while the naval blockade continues. Traders have concluded that a nominal ceasefire does not translate to resumed Hormuz commercial transit. Until a deal explicitly addresses the blockade, the $38/bbl structural premium over the pre-war baseline persists regardless of individual daily incident counts.

What could happen next?
  • Consequence

    European and Asian central banks running quarterly inflation assessments in May will incorporate $105+ Brent into their forecasts, likely deferring planned interest rate cuts by one to two quarters.

  • Risk

    Goldman Sachs's $120 Q3 severe scenario becomes the base case rather than the tail risk if both the Islamabad diplomatic track and the AUMF congressional track fail before 1 May.

First Reported In

Update #79 · Islamabad 3 collapses; Witkoff grounded, talks stall

Al Jazeera· 25 Apr 2026
Read original
Different Perspectives
India (BRICS meeting host, grey-market beneficiary)
India (BRICS meeting host, grey-market beneficiary)
New Delhi hosted the BRICS foreign ministers' meeting on 14 May that Araghchi attended under the Minab168 designation, giving India a front-row seat to Iran's diplomatic positioning. India's state refiners have been absorbing discounted Iranian crude through grey-market routing since April; Brent at $109.30 means every barrel sourced outside the formal market generates a structural saving.
Hengaw / Kurdish human rights monitors
Hengaw / Kurdish human rights monitors
Hengaw's daily reports from Iran's Kurdish provinces remain the sole independent cross-check on Iran's judicial activity during the conflict. Two executions across Qom and Karaj Central prisons on 15 May and five Kurdish detentions on 15-16 May indicate the wartime judicial pipeline is operating independently of military tempo.
Pakistan (mediator and bilateral partner)
Pakistan (mediator and bilateral partner)
Islamabad spent its diplomatic capital as the US-Iran MOU carrier to secure LNG passage for two Qatari vessels through a bilateral Pakistan-Iran agreement, spending its mediation credit for direct economic gain. China's public endorsement of Pakistan's mediatory role on 13 May is the structural reward.
China and BRICS bloc
China and BRICS bloc
Beijing endorsed Pakistan's mediatory role on 13 May, one day after the BRICS foreign ministers' meeting in New Delhi. Chinese state banks are processing PGSA yuan toll payments; China has not commented on its vessels' continued Hormuz passage, but benefits structurally from a non-dollar toll system it did not design.
Iraq (bilateral passage partner)
Iraq (bilateral passage partner)
Baghdad negotiated a 2-million-barrel VLCC transit without paying PGSA yuan tolls, offering political alignment in lieu of cash. Iraq's position inside Iran's adjacent bloc makes it the natural first bilateral partner and a template for how Tehran structures passage deals with states that cannot afford Western coalition membership.
Bahrain and Qatar (Gulf signatories)
Bahrain and Qatar (Gulf signatories)
Both signed the Western coalition paper while hosting US Fifth Fleet and CENTCOM's Al Udeid base, respectively. Qatar occupies the sharpest contradiction: it is on coalition paper while simultaneously receiving LNG passage through the bilateral Iran-Pakistan track, a position Doha has tacitly accepted from both sides.