Brent Holds Above $100 as Hormuz Shutdown Enters Third Week
Vessel traffic through the Strait has all but stopped and Iranian crude sanctions are back, yet the oil price move stays modest as the IEA taps reserves.
Commercial shipping through the Strait of Hormuz slowed to a near standstill on Monday (2026-05-18), with vessel tracking data showing just one ship exited the Gulf while two entered over the weekend.5 That is the chokepoint through which roughly a fifth of the world's oil passes, and its closure is what has kept Brent bid despite a market that, by the standards of a Gulf conflict, has stayed strangely composed.5,7
Brent North Sea crude traded back above $100 a barrel on Thursday (2026-05-14) as the stalemate hardened, threatening to feed into inflation just as central banks had begun to relax.7 On Monday (2026-05-18) the benchmark jumped more than 7 percent in Asian trading after attacks on commercial vessels in the Strait and conflicting signals over whether Washington and Tehran would return to talks.3 Front-month Brent later gave back some of its early gains the same day.6
The restraint is the story worth interrogating. A tenth week of conflict, a shut waterway, cargo ships hit, and the international benchmark is up a fraction of what past Hormuz scares delivered.6,4 Part of the answer sits in reserves. The IEA agreed to release 400 million barrels of member stocks to ease supply constraints, and Fatih Birol said the agency was ready to act again.1
"Four hundred million barrels is only 20% of our resource," Birol said. "We have still 80% in our pocket."1 That is a deliberate signal to anyone tempted to price in a permanent loss of Gulf barrels: the buffer is deep and the willingness to use it explicit. Traders took the hint.
Washington has long reached for economic pressure over military force with Iran.4 Barack Obama used sanctions to push Tehran toward the 2015 nuclear pact; the current standoff has seen those sanctions return alongside a paused but unresolved shooting war.4 Fighting is halted, Hormuz is shut, and the prospects for a deal remain uncertain, which is a poor foundation for the calm the futures curve implies.4
The diplomatic picture kept shifting. President Trump's rejection of Iran's response to a US peace proposal fuelled concerns that the 10-week conflict would drag on and keep shipping paralysed, lifting prices on Monday (2026-05-18).6 Iran, for its part, framed safe passage through Hormuz and regional security as demands it considered a generous offer.6 Days earlier Washington had floated a proposal aimed at de-escalation.6
Then came the reversal. Stocks roared higher on Wednesday (2026-05-20) after Trump announced a two-week ceasefire between the United States and Iran, pausing a war that had run more than a month.2 Oil tumbled on the news.2 The S&P 500 closed up 2.5 percent, and by Thursday (2026-05-21) crude was still falling on hopes of fresh talks.2,1 The Nikkei 225 ended one session up 2.4 percent and the Kospi 2.7 percent as the risk premium bled out.1
But the official statements from Washington and Tehran did not offer a clear picture of what came next.2 A two-week ceasefire is a clock, not a settlement. The Economist noted the same pattern of a ticking deadline, a threat of catastrophic war, a last-minute reprieve, and asked how long it could hold.8 The answer, it argued, depends on how much economic pain each side can absorb.8
For oil, that framing sets the trade. The premium that put Brent over $100 was built on a closed strait, not on lost production, and a ceasefire that reopens the waterway removes most of it fast.7,2 The downside risk is that talks collapse inside the two-week window and the Strait shuts again, this time with reserves already partly drawn.
Watch three things through the window. Whether Hormuz traffic recovers from its near-standstill, whether the IEA moves on the 80 percent it says it still holds, and whether the ceasefire survives to a real negotiation.5,18 JPMorgan's trading desk told clients the S&P could rise further "as euphoria returns to markets," assuming the truce is not a feint.2 That assumption is the whole trade.