GMS Week 19 - Brent break, backlog suspended

The eighteenth week hypothesis that the blockade has become a structural reality has been challenged.

Although he did not back down, it was the most significant diplomatic move since February 28. Brent crude collapsed from an April 30 high of US$126.41 to US$96.73 on May 6, settling near US$100 by May 7, after Axios reported on a one-page memorandum of understanding that was transferred from Washington to Tehran via Pakistan. President Trump suspended Project Freedom, the US Navy escort operation in Hormuz, due to the progress. Tehran confirmed receipt and indicated a response, while Mohsen Rezaei rejected the framework and demanded compensation. About 23,000 seafarers from 87 countries remain stranded across nearly 2,000 ships in the Arabian Gulf, with the International Maritime Organization noting that there is no recent precedent.

Shipping has moved decisively in the other direction. The BDI closed at 2,991 on May 6, up 321 points (12%) from 2,670, with Capesize earnings rising, with the BCI reaching 5,074 (from 4,283) with daily returns of $42,514. Panamax and Supramax hold side by side. The dry bulk sectors most relevant to recycling have now reached their strongest levels for 2026, increasing the trading premium that keeps older ships active. Even with the possibility of reopening the Strait of Hormuz, shipping indicates that the owners are not preparing to release their cargo.

Inflation now reflects the full impact of the war shock. Pakistan’s CPI for April rose to 10.9% (from 7.3%), the first double-digit reading in 21 months, as the weekly oil import bill jumped from US$300 million to US$800 million. The State Bank of Pakistan responded by raising interest rates by 100 basis points to 11.5%, the first in three years. Turkey’s CPI reached 32.37% (from 30.87%), with monthly inflation rate at 4.18%, ending a three-month disinflation trend. April data for Bangladesh and India are due next week.

Currencies vary. USD/INR reached 95.27 on May 4 before recovering to around 94.18 by May 7. The USD/TRY weakened to a record high of 45.24, down 1.64% during the month. The US dollar against the Pakistani rupee rose to 279.61 from 278.82 amid rising interest rates and inflation shock, while the US dollar against the Pakistani rupee settled in the range of 122.74-123.18 at 122.90. The DXY remains near 100. The previous ramifications have narrowed, although the Pakistani currency’s advantage has declined appreciably.

With approximately three weeks before the monsoon window closes, timing is crucial. The Brent correction and the MOU arrived too late, on current evidence, to change Week 18’s conclusion that the first-quarter surplus had become a backlog in the second quarter. Owners’ decisions over the next 21 days remain driven by the shipping company, unresolved Hormuz risks (the Pentagon’s six-month mine clearance estimate stands, and the IMO has not endorsed safe passage), and the time lag between any agreement and normal transit operations. Bangladesh leads in demand and pricing. Pakistan’s advantage has narrowed, but it still exists. India’s compliance rule remains intact as the rupee stabilizes. The standard Turkish lira maintains the status of Aliaga.

The question of Week 19 has shifted from whether supplies will be released to whether diplomacy can launch them in time. Shipping and inflation suggest that will not happen. The accumulation continues.

For Week 19 of 2026, the GMS market rankings/vessel indices are as follows.