Hormuz normalization at 62% on Polymarket; XLE down 1.8% on week — crude re-rate not priced

This is Angle C — a 33pp single-day move with zero matching public news catalyst, which is the definition of informed flow ahead of an undisclosed geopolitical event. The crowd is now pricing a 62% probability of Hormuz traffic normalizing by June 2026, up from 28% yesterday. There is no public announcement — no ceasefire, no diplomatic communiqué, no IRGC statement — that explains a move of this magnitude. This is almost certainly a leak from actors with advance knowledge of a diplomatic deal, a military stand-down, or a back-channel agreement involving Iran, likely brokered by Gulf states or a third-party mediator. The equity market has not processed this signal: WTI crude has already fallen 8.4% on the week (partly on the same underlying information reaching commodity desks), but US downstream refiners are lagging. Refiners like MPC and PSX are priced as if the crude risk premium is structural — their crack spread assumptions embed elevated feedstock costs. When the Hormuz news becomes public, crude falls further (the geopolitical risk premium unwinds from $96 toward $82-85), and refiner margins expand mechanically because refined product prices are stickier than crude. The equity re-rating happens when the news breaks, not before — exactly the informed-flow thesis. The 24h volume of $586k on a $165k liquidity market confirms this is not organic retail flow; it is concentrated, directional, and fast.

The strongest case against this trade is that WTI has already fallen 8.4% on the week, suggesting commodity markets have already absorbed much of the de-escalation signal — refiner stocks may not re-rate further if crude's move is complete. The most vulnerable assumption in the chain is that crack spreads actually widen: if a Hormuz reopening also releases suppressed crude supply from Iran (sanctions relief scenario), product supply could rise alongside feedstock supply, leaving crack spreads flat or lower. Additionally, the 33pp Polymarket move could reflect a single large whale betting on a specific resolution technicality (IMF Portwatch data revision) rather than genuine geopolitical intelligence. The single data point that flips this view: if WTI falls another 5%+ tomorrow morning before any news breaks, it signals commodity markets have fully priced the event and the refiner equity catch-up trade is already done.