What drove oil prices above $110 in KW18 2026?

In KW18 (April 27 – May 2, 2026), the Iran escalation intensified again. Vessel traffic through the Strait of Hormuz fell to just 5% of the prior-year level — a -95% collapse. Since roughly 21 million barrels of oil transit Hormuz every day, even partial disruption is sufficient to push Brent above $110 — combined with strong physical demand from Asia.

Why did the Fed signal no rate cuts in 2026?

The Fed held rates steady at its early May 2026 meeting and clearly communicated that no further cuts are expected for the year. The reasons: inflation remains elevated due to Hormuz-driven energy costs, the US labor market stays robust, and premature easing would jeopardize progress on inflation. Powell stated: 'Inflation elevated' — higher-for-longer remains the mantra at least through Q1 2027.

Which shipping stocks benefited most in KW18 2026?

The biggest winners in Marco's portfolio in KW18 were FLEX LNG, BW LPG and TORM. FLEX LNG benefits from LNG rerouting — Hormuz forces LNG tankers onto long Cape routes, adding 30-45 days per voyage. BW LPG gains from LPG tanker premium rates. TORM (VLCC and product tanker specialist) profits from exploding spot rates due to the tanker bottleneck. TORM also has an ex-div date on May 22 at $77 gross.

Why did REITs underperform in KW18 2026?

REITs like MPW, Realty Income (O) and W.P. Carey (WPC) suffered from the Fed's higher-for-longer stance. Since REITs typically carry high debt loads with significant refinancing due in the next 12-18 months, no rate cut path in 2026 means higher refinancing costs. The 10-year Treasury yield held at 4.18% — too high for attractive REIT spreads against risk-free capital.

Iran Escalation, Oil $110+, Fed Holds Firm

A wild week: Iran escalation drives Brent above $110, vessel traffic through the Strait of Hormuz collapses to minus 95%, the Fed holds rates steady and signals openly — no more rate cuts in 2026. And yet the S&P 500 manages five consecutive winning weeks with an April gain of +10%.

How does that fit together? My full breakdown of KW18 — with portfolio numbers, top performers, underperformers and the outlook for the coming weeks.

$110+Brent Crude (KW18 Peak)

−95%Hormuz Vessel Traffic YoY

+10%S&P 500 April 2026

€432Dividends This Week

1. Geopolitics: Hormuz Vessel Traffic −95% — What It Really Means

Vessel traffic through the Strait of Hormuz fell to just 5% of prior-year levels in KW18. That sounds abstract — but it is not. Normally, roughly 21 million barrels of oil plus around 30% of the world’s LNG trade transit the strait daily. Even partial disruption of this corridor triggers an immediate market reaction.

The Iran escalation in KW18 was the most powerful stimulus for tanker rates in decades:

VLCC spot rates: Remained at historically elevated levels, driven by massive rerouting around the Cape of Good Hope
LNG tankers: Cape routes instead of Hormuz add 30–45 days per voyage — structurally less capacity with the same fleet size
Product tankers: Refined oil from the Gulf is also being rerouted; TORM and BW LPG benefit directly

Key Insight: Anyone not yet in tanker stocks should wait for the next pullback — the structural thesis is intact. For existing positions: hold. The combination of the Hormuz crisis and a structurally tight tanker supply (almost no new orders due to fuel regulation uncertainty) makes for a prolonged cycle.

2. Fed Decision: Powell Signals — No Cuts in 2026

The FOMC meeting in early May brought no surprise on the policy rate — it held steady at 5.25–5.5%. What was new and clearly communicated: no further rate cuts in 2026.

Key points from Powell’s press conference:

“Inflation elevated” — the Hormuz effect flows directly into energy and transport costs and thus into CPI calculations
Labor market robust — no pressure to ease from that side
Higher-for-longer as an explicit signal — not a threat, but a data-driven reality

What does this mean for my portfolio? Positive for hard assets, negative for REITs. Higher rates longer-term mean lower valuation multiples for rate-sensitive sectors — and stronger cash flow generation for low-leverage energy and shipping positions.

Market Reaction to the Fed Decision

10-year US Treasury yield held at 4.18% (slightly changed). Gold slightly weaker (−2% on the week). REITs under pressure. Energy and shipping outperform significantly. S&P 500 still +10% for the month of April — driven by tech earnings beats and the mega-cap AI infrastructure story.

3. S&P 500 +10% in April — How Does That Square With the Iran Crisis?

This is the question everyone following the geopolitics is asking: how can the US benchmark index gain +10% in April while Hormuz is nearly closed and the Fed signals no rate cuts?

The answer lies in the sector composition of the S&P 500. Technology and AI infrastructure account for over 30% of the index. The earnings season was extremely strong:

Mega-cap tech (Apple, Microsoft, Google, Nvidia) all posted massive beats
AI infrastructure investment from hyperscalers is exploding — AWS, Azure, Google Cloud all with +40%+ YoY growth
Energy sector also rallied (Chevron, ConocoPhillips earnings beats)

The S&P 500 simply is not the S&P 500 of 1990. Anyone going short on the basis of geopolitics is impoverishing themselves. That does not mean corrections won’t come — but as a macro baseline I have to accept this.

4. Top Performers KW18: FLEX LNG, TORM, BW LPG

My biggest winners in KW18:

FLEX LNG (FLNG)

LNG tanker operator profits massively from Hormuz rerouting. Cape routes instead of Hormuz passage add 30–45 days per voyage — with the same fleet size, that means structurally less capacity and higher rates. FLEX LNG also has strong time-charter coverage that maximizes cash flow visibility. Dividend solid and attractive at the current price level.

TORM (TRMD) — Ex-Div May 22: $77 Gross

TORM as a product tanker specialist benefits twice: higher spot rates from the Hormuz bottleneck and rising demand for refined products (gasoline, diesel, jet fuel) on long routes. Ex-div on May 22: $77 gross — a significant absolute amount. My position stays through the ex-div date.

BW LPG (BWLPG)

LPG tankers are the often-overlooked corner of the shipping universe. Liquefied gas (propane, butane) from the Middle East also transits Hormuz. Rerouting drives rates. BW LPG has also built out its downstream business, which increases margin stability.

5. Underperformers: REITs Under Higher-for-Longer Pressure

The other face of the week: REITs suffered. MPW (Medical Properties Trust), Realty Income (O) and W.P. Carey (WPC) all under pressure as the market prices in higher-for-longer rates.

The mechanism is direct:

REITs carry high debt ratios — many bonds need refinancing in the next 12–24 months
Higher refinancing rates squeeze the free cash flow available for dividends
The spread between REIT yield and 10-year US Treasuries is shrinking — making REITs relatively less attractive against risk-free capital

Risk Note for REITs: I am holding my REIT positions (MPW, O) but not adding. The dividends are secured, and if rates normalize from 2027 onwards, REITs will be among the first to recover strongly. This is a patience game — not a liquidation case.

6. Portfolio Update KW18 — €432 in Dividends

This week €432 in dividends landed in my portfolio. Key ex-div dates on my radar over the coming weeks:

TORM (TRMD): Ex-div May 22 — $77 gross (at my position size)
Equinor: Ex-div follows — ~8% annualized yield including special dividend
BW LPG: Quarterly distribution expected in May

Portfolio status end KW18: Hard assets as the anchor are keeping the portfolio stable. Energy and shipping as direct beneficiaries of geopolitics outperform. The REIT allocation dampens slightly — but remains strategically important for when the rate environment peaks.

7. Outlook KW19: Novo Nordisk Q1, BP, ENI, Equinor Earnings

The coming week (KW19, May 4–10) brings a full wall of earnings from my portfolio positions:

May 6 — Novo Nordisk Q1 2026: The first major test after the 54% crash from the peak. Wegovy pill (world’s first oral GLP-1, FDA-approved December 2025) and volume development are in focus. I have already published my Novo Nordisk analysis.
May 7 — BP: Upstream results with Hormuz effect — interesting for assessing my energy positions.
May 8 — ENI: Europe’s most diversified energy group. I hold ENI and am watching cash flow and dividend outlook.
May 9 — Equinor: The Norwegian energy champion with an attractive combined dividend. Production and cash flow at $108–110 Brent should be strong.

Disclaimer: This article is for informational and educational purposes only. It does not constitute investment advice, a recommendation, or an offer to buy or sell any security. All information provided without guarantee. Act on your own responsibility.

Iran Escalation, Oil $110+, Fed Holds Firm — My Hard Asset Week