Brent crude held near $107 per barrel on Monday morning, with prediction markets pricing a 93 percent probability of the benchmark closing above that level by end of day. The AOL Finance snapshot at market open had Brent at $107.40. The spread between WTI at $102 and Brent at $107 — roughly $5 — reflects American domestic production's partial insulation from the Hormuz disruption, an insulation that does not extend to European or Asian refiners. [1] [2]

This paper has tracked Brent's surge since March 26, when it first touched $107. The notable feature of Monday's price level is not that it is high. It is that it is stable. Brent has traded in the $105-$110 range for eleven days. That is not a spike. That is a new floor. [2]

Goldman Sachs, which forecast the war premium at $25-$32 per barrel in the war's first days, now estimates Brent will average $110 through March and April. The initial premium estimate has been revised upward three times. Each revision has followed a military escalation that expanded the war's geographic scope. [3]

The policy implication of a stable $107 Brent is different from a spiking $107 Brent. A spike creates pressure for SPR releases, diplomatic interventions, and emergency market measures. A stable high price becomes the operating assumption for every corporate and government budget that runs on energy. It is embedded in airline ticket prices, in fertilizer costs, in the price of shipping a container from Shanghai. The war premium is market structure now. It will not unwind without a diplomatic resolution that currently does not exist. [3]

-- HENDRIK VAN DER BERG, Brussels