For companies such as Hapag-Lloyd, the winds are currently favourable. On Monday, the German shipping heavyweight raised its profit guidance for this year, now pointing to an operating gain of up to €1000 million in 2026 - a sharp increase from the €400 million it had previously pencilled in. Forward ordering across the globe, aimed at getting ahead of a possible new round of tariff hikes by Donald Trump, and higher freight rates linked to the Hormuz crisis have improved Hapag-Lloyd’s outlook. But the knock-on effects may not stop there.
In fact, the German group is only one of several economic players set to benefit from the turmoil in the Middle East, with the Strait of Hormuz turning into a naval flashpoint - a threat to the global economy, but with meaningful upside for the oil industry.
Hapag-Lloyd, the Strait of Hormuz and freight rates
When Trump announced he wanted to be the “guardian of Hormuz”, alongside a 20% “toll” on the value of goods passing through, it opened up a fresh pocket of uncertainty for global shipping and for the cost of petroleum products. That uncertainty proved short-lived: in under 24 hours, the US President reversed course on the proposed toll.
Brent briefly traded above $87 a barrel this week, after Trump’s threat to impose a “toll”
Brent jumps as the Middle East conflict intensifies
What is clear is that Brent surged as the war in the Middle East escalated. Europe’s benchmark crude had ended last week at $76 a barrel (days after it had even dipped back to pre-conflict levels), but this week it accelerated and was at one point trading above $87.
As recently as June, the global oil market had been on a gradual recovery path. Specialist consultancy Kpler estimated it would take three to four months for Middle East exports to return to the average level seen in recent years. New attacks around Hormuz, however, set back that normalisation - and further complicated an already difficult backdrop.
Russia’s refining capacity, in particular, has fallen to its lowest level in 21 years after Ukrainian strikes - a major development given Russia is one of the world’s largest diesel suppliers.
Refiners benefit as margins surge and diesel remains tight
The current mix has sent refining margins sharply higher across the oil industry. Galp’s margins have risen quarter after quarter, moving from $4.7 per barrel in the third quarter of 2024 to $16.8 in the second quarter of this year (a figure only surpassed by the $24 margin Galp recorded in the third quarter of 2022, during the energy crisis triggered by Russia’s invasion of Ukraine). In Sines, the feedstock processed by Galp in the second quarter was 22.6 million barrels of crude, up 7% year on year.
Portugal’s oil major is far from alone. In the second quarter of 2026, several sector players saw their refining margins climb on the back of the exchange of strikes between the United States and Iran. Among them was BP, which between April and June posted margins of almost $30 per barrel (up 149% year on year), and Shell, where the refining margin jumped 125% to $20 per barrel. Next door in Spain, Repsol and Moeve (formerly Cepsa) also rode the wave, with gains of 28% (to $14 per barrel) and 94% ($11.3), respectively.
With another earnings season approaching, most oil companies are expected to report higher profits - and on an even larger scale than in the first three months of the year. From January to March, Galp delivered net profit of €272 million (up 41% year on year), while Spain’s Repsol and Moeve reported profits of €873 million (up 56.7%) and €147 million (up 7%), respectively. BP, meanwhile, saw its bottom line expand by 129% to $3.2 billion, and Shell reached $5.7 billion (up 18.8%).
Limited refining capacity in Europe and Russia is putting pressure on fuel prices
For now, fuel logistics are adjusting. “High prices are already pushing replacement supply towards Europe. Saudi, Indian and US diesel cargoes earn more when delivered into Rotterdam, but they take weeks to arrive,” James Noel-Beswick, Sparta’s head of commodities, told Expresso.
But with crude and refined products more expensive - and the diesel market especially tight - is there any chance of a pullback in petroleum product prices? “A lasting easing of tension in Hormuz, a recovery in Russian refining or sustained releases of Chinese products could push prices down significantly,” says James Noel-Beswick. “But until any of that happens, the diesel market will remain tight. Stocks were already fragile before this escalation and the latest events have landed on top of a situation that was already complicated,” adds the Sparta specialist.
Uncertainty for the economy
For the moment, the wider economic impact remains unclear. “Despite the sharp rise in oil prices observed during the second quarter, the Portuguese economy does not appear to have incurred a material cost in terms of activity growth. Of course, prolonged tensions in the Middle East are a downside risk, but the effects seen so far look relatively contained - and, somewhat surprisingly, smaller than we expected,” says João Borges de Assunção, a professor at Católica Lisbon.
In Borges de Assunção’s view, it is “premature” to revise Portugal’s 1.8% growth forecast for this year. Paula Carvalho, BPI’s chief economist, agrees. “The 1.8% forecast for GDP growth in 2026 is maintained, as this scenario was built with average commodity prices similar to today’s. However, the scope for positive surprises that existed under lower tensions, compliance with the memorandum and an open Strait of Hormuz is now much smaller,” Paula Carvalho says.
BPI had already set out its outlook for the Portuguese economy using an average price of $90 per barrel, meaning the current level of crude still looks “comfortable” relative to the bank’s latest estimate.
Paula Carvalho concedes, however, that “the recent worsening of tensions in the Middle East is once again intensifying downside risks for the economy and upside risks for prices and also for interest rates”. BPI’s chief economist notes that “the main transmission channel in Portugal is fuel prices”, and that “activity may also be negatively affected through weaker household purchasing power, a drop in business confidence, and greater uncertainty, with a potentially adverse impact on consumption and investment”.
Where the oil price goes over the next few weeks is, as it always has been, an unknown.
Q&A
Why did oil fall back to pre-conflict levels but petrol and diesel did not?
Before the US attack on Iran at the end of February, Brent was trading at $70 a barrel, having moved above $120 in April. With the peace agreement between the two sides (in mid-June), the price returned - for the first time in four months - to pre-war levels, with a fresh “wave of oil” flooding markets. However, refined product prices (petrol and diesel) did not follow the same path, which is why pump prices did not fall further. Since the April peak, Brent has fallen by around 50%, while diesel has only recovered 41%.
What is putting pressure on refined product prices?
These products trade at a spread versus crude, which determines refiners’ profits, and in early July that spread reached its highest level in four years. Even so, the two markets usually move “hand in hand”. The current “disconnect” stems from supply-side constraints: refineries are offline in the Middle East and are under attack in Russia, which restricts exports. The bottom line is that stocks are below the five-year historical average. With ships stuck in the Persian Gulf, the cost of maritime transport (freight) is also materially pushing up refined product prices.
What is the ‘rockets and feathers’ phenomenon?
In 1990, economist Robert Bacon published a study titled “Rockets and Feathers”, looking at how final petrol prices in the United Kingdom responded to cost changes. Using data from 1982 to 1989, he concluded that “the adjustment process on the way up [in retail prices] is slightly faster and the adjustment period is more concentrated than when costs fall”. In Portugal, the Competition Authority has also studied the topic, noting that the intensity of the phenomenon varies from country to country. This month, ERSE (the energy regulator) dismissed the idea of irregularities in the fuel market after the minister requested new analyses of pricing behaviour.
Are Portugal’s prices above the European average?
European Commission data from early July show that Portugal’s retail diesel price was 0.25% below the euro area average, while petrol was 1.83% above. Before taxes, in the first week of July Portugal’s petrol was 1.28% cheaper and diesel was 4.13% below the euro area average (since the start of the Hormuz conflict, the Portuguese price has always remained below the average).
What is the likely price trend?
Brent has jumped again, and further steep increases were expected this week in refined product quotations. That is not good news for forecourt prices, with additional fuel rises already anticipated for next week. Last Monday, diesel rose by 6 cents per litre and petrol by 2 cents, even after the discount granted by the Government on ISP.
How sensitive is the economy to oil price movements?
A sharp increase in the oil price and in maritime transport costs has implications for the global economy, pushing inflation higher. In the 2026 State Budget, the Government used an average Brent price of $65.4 per barrel as the reference for this year. The Budget’s sensitivity analysis estimates that a 20% price increase “would result in a reduction of 0.1 percentage points in GDP growth in 2026”.
Bábara Silva and Miguel Prado
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