Skip to content
You can now search across every topic, entity and event.What's new
Russia-Ukraine War 2026
9MAR

Oil prices a Hormuz reopening that has not happened

4 min read
06:08UTC

Brent crude fell to about $77.22 on 18 June, a pre-war level, while not one tanker resumed transit, insurers kept the strait excluded and the mines stayed live. The market is reading the signature; the water disagrees.

ConflictDeveloping
Key takeaway

Brent is pricing a reopening that no insurer, mine crew or transit log has yet confirmed on the water.

Brent Crude, the benchmark that sets the price of roughly two-thirds of internationally traded oil, fell to about $77.22 on 18 June, down 6.9 per cent from $82.98 and back to a level last seen before the war 1. Traders treated the signed Islamabad Memorandum of Understanding (MoU) as a completed reopening of the Strait of Hormuz. Not one tanker resumed transit.

The physical strait tells a different story from the screen. No Protection and Indemnity (P&I) club, the mutual insurers that cover roughly 90 per cent of ocean-going tonnage, has lifted its Hormuz war-risk exclusion; premiums sit at four to twenty times pre-war levels, and transits run near 6 per cent of baseline . Mine-clearance crews are still working uncleared waters: an IRGC vessel issued a radio warning to a US warship during that work on signing day. None of that has reached the insurance market that decides whether a hull moves.

Brent had touched $87.33 only days earlier and slipped below $90 when the ceasefire first looked probable ; the slide now prices an operational resumption rather than a rising probability of one. If the OFAC waiver never lands, or the 60-day toll-free window lapses into a fee, the gap between paper and water closes upward. Brent at $77 runs several weeks ahead of any operational change in the strait itself.

Deep Analysis

In plain English

Financial markets and physical ships operate on different clocks. Traders in London can reprice oil within seconds of reading a news headline. A tanker captain deciding whether to sail through the Strait of Hormuz needs to know the mines have been cleared, that his insurance still covers him, and that an armed vessel will not stop him halfway through. On 18 June, Brent fell 6.9% to $77.22 as traders priced the deal as a completed reopening. Yet BIMCO, the world's largest shipowner association, confirmed no P&I club had lifted its war-risk exclusion. CENTCOM's two carrier groups continued redirecting vessels. Iranian-laid mines remained uncleared. Zero commercial tankers completed a Hormuz transit that day. The price moved; the strait did not.

What could happen next?
  • Risk

    If no commercial tanker completes a Hormuz transit by 25 June, Brent is likely to rebound toward $82 to $84 as traders recognise the physical-to-paper gap.

    Immediate · Assessed
  • Consequence

    Saudi Arabia's four idle supergiant fields , representing 2 to 2.5 million barrels per day of capacity , will not restart until owners confirm Hormuz is operationally clear, because VLCC loading at Safaniya and Ras Tanura exits via the strait.

    Short term · Assessed
  • Opportunity

    The first commercial VLCC completing a Hormuz transit under P&I cover would be the most significant operational market signal since the conflict began, likely accelerating the Brent decline by a further $3 to $5.

    Short term · Reported
First Reported In

Update #131 · Iran deal's first death tests the text

CNBC· 18 Jun 2026
Read original
Different Perspectives
Turkey
Turkey
Turkey, a major buyer of Russian diesel cargoes, loses that access under Moscow's first producer-binding export ban, in force from 8 July to 31 July. Ankara hosted the same week's NATO summit pledging EUR 70bn to Ukraine, sitting on both sides of the fuel-and-alliance ledger.
NATO
NATO
NATO leaders meeting in Ankara on 7 and 8 July pledged EUR 70bn in equipment, assistance and training for Ukraine across 2026, with a 2027 sustainment commitment and a $40bn Drone Edge counter-drone initiative. European allies now fund the vast majority of that package, filling the gap left by Washington's idled crude waiver.
India
India
India's state refiners continued buying discounted Urals crude as June's price fell to $63.18 a barrel, insulating New Delhi from the OFAC waiver gap still constraining Western buyers. Indian refiners could pick up diesel-export share as Russia's producer-binding ban shuts out its former customers.
China
China
China's independent refiners kept importing discounted Urals crude through June as the price fell to $63.18 a barrel, down 26% month-on-month per CREA. Beijing has said nothing on Moscow's new diesel ban, leaving Chinese refiners a likely beneficiary if Turkish and Brazilian buyers seek replacement cargoes.
United States
United States
No successor licence has been issued since General License 134C lapsed on 17 June, leaving a 26-day gap, the longest of the war, in the Russian crude waiver. Washington's silence is tightening the channel without any stated decision, as Treasury weighs whether to let it die.
Ukraine
Ukraine
Ukraine's long-range strike campaign shifted from refineries to seaborne fuel tankers crossing the Sea of Azov, cutting tracked vessel traffic 55% between 30 June and 11 July, per Starboard Maritime Intelligence. The shift targets Russia's export revenue directly rather than just domestic supply, adding pressure alongside the collapsing Urals price.