THE FLOW | WEEKLY ENERGY PIPELINE RECAP | MAY 18-22, 2026 | ISSUE W21/26 | FELIPE GERMINI
Most macro coverage this quarter is anchored on OPEC+ quotas and Chinese demand. The actual price discovery is happening inside Lloyd’s of London. Since late February, war-risk premiums on Strait of Hormuz transits have moved from 0.15% of hull value to 5.5%, translating into USD 3M to 8M of insurance cost per VLCC voyage. That is roughly $3 per barrel of pure premium before freight, before lightering, before P&I.
Brent printed $105.10 on Friday and still closed the week down 4.3%. The market is pricing the reopening of Hormuz before the diplomatic paperwork is signed. The crack complex has not unwound in tandem. That gap, between flat price selling off on hope and crack spreads holding the wartime premium, is the trade.
