Thursday 26 February 2026
Brent Crude Weekly Move Explained: Military Escalation, Hormuz Risk, Diplomatic Repricing
Brent Crude | February 16 – February 25, 2026
1. Opening Section
Brent crude serves as the primary global benchmark for seaborne oil pricing, anchoring physical contracts across Europe, Asia, and the Middle East. As a macro-sensitive commodity, Brent reflects shifts in geopolitical stability, supply-chain vulnerability, producer behavior, and global demand expectations. Unlike many financial assets, geopolitical risk in oil markets is priced directly into spot and front-month contracts due to the physical immediacy of supply constraints.
During the period from February 16 to February 25, 2026, Brent functioned as a live barometer of geopolitical risk premium expansion. Escalating military deployments in the Gulf region, renewed U.S.–Iran nuclear tensions, and a temporary Strait of Hormuz closure triggered repricing of supply disruption probability.
From a weekly low of
$66.26 (February 17) to a period high of
$71.96 (February 23), Brent advanced approximately
8.6%, before consolidating and closing at
$70.79. The move represented a structurally significant expansion driven primarily by risk repricing rather than physical shortage.
2. Price Action Overview
The week opened under reduced liquidity conditions due to the February 16 Presidents’ Day holiday in the United States. Early price action was muted, with Brent stabilizing before dipping to the weekly low of
$66.26 on February 17.
From that low, momentum shifted decisively. On February 18, Brent printed a daily high of
$70.10, marking the beginning of a sharp expansion phase. The following session extended gains, with February 19 reaching
$71.54, signaling acceleration in risk premium pricing.
Escalation rhetoric intensified on February 20, and Brent recorded a new high of
$71.84, reflecting sustained bid pressure. The move culminated on February 23 with a period high of
$71.96, completing an 8.6% advance from the February 17 low.
A measured pullback followed. On February 24, Brent registered a daily low of
$70.45, followed by
$70.19 on February 25, indicating profit-taking and consolidation rather than disorderly liquidation. The period closed at
$70.79, maintaining the majority of gains despite diplomatic headlines suggesting renewed talks.
Structurally, the sequence unfolded as:
Flush → Acceleration → Expansion High → Orderly Pullback → Stabilization
The absence of aggressive downside follow-through indicated continued absorption of selling pressure at elevated levels.
3. What Drove the Weekly Move
A. Military Escalation and Asset Deployment
The deployment of significant U.S. military assets to the Middle East materially altered the market’s risk assessment. The USS Abraham Lincoln remained positioned in the Arabian Sea, while the USS Gerald R. Ford carrier strike group deployed to the region. Additional deployments included F-35s, F-22s, F-15s, F-16s, B-2 bombers at Diego Garcia, more than 85 refueling tankers, and approximately 170 cargo aircraft.
Such scale represented one of the largest regional buildups in decades. Oil markets interpreted the deployment as a credible escalation signal, increasing the probability assigned to supply disruption scenarios.
Given that approximately
20 million barrels per day transit the Strait of Hormuz—representing roughly 20% of global supply and 25–30% of seaborne oil—the presence of concentrated military assets directly impacts price formation. The expansion from $66.26 to $71.96 reflected this repricing dynamic.
B. Strait of Hormuz Disruption Risk
On February 19–20, Iran temporarily closed the Strait of Hormuz for naval exercises. While the closure was limited and short-lived, it demonstrated operational capability to interfere with global energy transit.
Oil markets price not only realized supply loss but also disruption probability multiplied by volume at risk. With roughly 70% of OPEC+ spare capacity concentrated in the Gulf region, even partial interference carries systemic implications.
The temporary closure reinforced the legitimacy of the threat, sustaining elevated pricing even after diplomatic engagement resumed.
C. Diplomatic Uncertainty and Ultimatum Timeline
On February 20, President Trump issued a 10–15 day ultimatum regarding nuclear negotiations, introducing a defined timeline into market expectations. The binary nature of the deadline—resolution or escalation—prevented full unwinding of the risk premium.
When renewed talks were announced on February 23, Brent did not collapse but instead stabilized. The limited pullback to $70.45–$70.19 indicated probability reassignment rather than full de-escalation pricing.
The persistence of price above $70 despite projected global oil surplus of 3.8–3.9 million barrels per day for 2026 underscored the dominance of tail-risk pricing over forward surplus estimates.
4. Why Brent Behaved the Way It Did
The structure of the move suggests institutional repositioning rather than speculative excess.
First, the rally unfolded progressively across multiple sessions, with higher highs on February 18, 19, 20, and 23. This stair-step progression reflects sustained accumulation rather than single-session spike behavior.
Second, the pullback phase was orderly. The February 24–25 lows remained well above the February 17 trough, confirming that the market absorbed profit-taking without structural breakdown.
Third, the futures curve remained consistent with near-term tightness perception but not sustained deficit expectations, aligning with surplus projections for 2026. This indicates that the move was primarily geopolitical risk premium injection rather than structural supply rebalancing.
The market effectively recalibrated equilibrium pricing to reflect embedded disruption risk, then consolidated at that higher level as uncertainty persisted.
5. Takeaway
Between February 16 and February 25, 2026, Brent crude advanced from
$66.26 to $71.96, a gain of approximately
8.6%, before closing at
$70.79. The move unfolded in three phases: initial stabilization in low liquidity conditions, accelerated risk premium expansion amid military escalation and Strait of Hormuz disruption signals, and orderly consolidation as diplomatic channels reopened.
Despite projected global surplus conditions, Brent maintained the majority of its gains. The episode demonstrates that geopolitical risk premium in energy markets can temporarily dominate fundamental balance when high-volume chokepoints are implicated. The ability of Brent to stabilize above $70 after an 8.6% expansion underscores the structural influence of tail-risk repricing during concentrated geopolitical stress.
6. Market Note – Weekend Geopolitical Watch
As markets approach the weekly close, attention remains elevated on developments in the Middle East, particularly surrounding ongoing U.S.–Iran negotiations and regional military positioning. With energy markets highly sensitive to shifts in diplomatic tone or security conditions around key transit routes such as the Strait of Hormuz, headline risk remains a dominant short-term driver.
Weekend developments can introduce gap risk at the next market open, as geopolitical announcements often occur outside regular trading hours. In periods of heightened regional tension, changes in negotiation status, military posture, or maritime activity can alter risk assumptions rapidly.
Market participants should remain aware that energy pricing, broader commodity markets, and risk sentiment may respond quickly to any material updates released before trading resumes.
The chart below highlights
Brent crude oil’s price
movement and
percentage change between
16 and 25 February.
Pre-Meeting War Premium Build-Up
Escalation Deferred, Diplomacy Preserved
Geneva Talks — Tangible Diplomatic Progress
