Adjusted first-quarter net income of $1.16 a share was 20 cents higher than the average analyst estimate in a Bloomberg survey. Although profit dropped to a five-year low of $4.9 billion, that figure included the impact of temporary accounting charges tied to derivative contracts that the company expects to fully unwind over the coming months.

Even so, Exxon may revise guidance that forecast full-year daily output equivalent to 4.9 million barrels as the Iran war chokes Middle East energy flows and prevents the Texas oil giant from selling crude and liquefied natural gas from the region.

“Part of the challenge with giving guidance is, as you would imagine, we really don’t know how long the Strait of Hormuz will remain closed,” Chief Financial Officer Neil Hansen said in an interview.

Higher energy prices added $1.7 billion to earnings during the quarter, outweighing a $400 million blow from war-related production outages, according to company figures. Roughly 15% of Exxon’s worldwide output remains offline, Hansen said.   

Rival supermajors BP Plc and TotalEnergies SE also surpassed expectations when they disclosed results earlier this week. 

Exxon “is a fundamentally stronger company than it was just a few years ago, built to perform through disruption and across market cycles,” Chief Executive Officer Darren Woods said in a statement Friday. 

The unprecedented global energy shock triggered by the Iran war has pushed international oil prices to more than $125 a barrel. But oil companies in many cases have been hamstrung in reaping the financial windfall as the conflict strands oil and natural gas cargoes, and missile and drone strikes menace critical infrastructure in the region.

Exxon’s bought back $4.9 billion of shares during the quarter and affirmed its intention to repurchase $20 billion worth of stock this year. 

Exxon is mitigating production losses with steady ramp-ups in Guyana, the Permian Basin and the US Gulf Coast. It’s also benefiting from higher prices for non-Middle East production. 

Still, that hasn’t been enough to prevent Exxon stock losing ground to competitors. The shares have advanced about 1% since the war began at the end of February, the worst performance among the five Western supermajors. By contrast, BP is up 20%.

Before the war, Exxon had been the best-performing Big Oil stock since the pandemic due to a successful strategy of growing fossil-fuel production while lowering per-barrel costs. 

Exxon’s beat came after Exxon sharply revised down expectations for first-quarter profit due to losses on derivative positions tied to cargoes that had yet to be delivered by the end of the quarter. Those mark-to-market losses amounted to $3.9 billion in the period, which was at the high end of its guidance range. 

Exxon expects these losses to unwind over the coming quarters as the shipments conclude journeys and the transactions are completed. 

The conflict also poses longer-term problems for Exxon. 

The company holds stakes in two liquefied natural gas operations in Qatar that were severely damaged by Iranian missiles in March. A rebuild could take as long as five years and cost billions, according to Qatari officials. 

The equivalent of about 800,000 barrels of daily output is currently offline, including 100,000 from Qatari gas-liquefaction operations hobbled by missile fire, Hansen said.  

©2026 Bloomberg L.P.

“Naphtha imports from areas outside the Middle East, such as the US, Algeria, and Peru, will increase threefold by May, compared with levels before the Middle East conflict,” Takaichi posted on social media on Thursday. She said there have been disruptions in the supply chain due to overbuying of petroleum products by some firms.

The comments come as signs of the impact from the Middle East conflict begin to show across Japan’s economy. Japan has relied on the Middle East for about 90% of its oil. The disruption in oil supply is testing Takaichi’s leadership and diplomacy, as the government seeks to soften the economic blow from the war in Iran.

In early April, Takaichi said there was enough naphtha to last Japan over half a year. The assurances of incoming imports and supply lasting until next year suggest an increase in supply, but companies appear wary they may run short of the distilled product, which is used to make everything from tires and clothes to plastic bags and foam packaging.

Supply chain disruptions are beginning to create choke points across Japan’s auto industry, including the network of companies surrounding Toyota Motor Corp. Some smaller suppliers have said they’ll be unable to deliver some parts starting in two weeks, a Toyota executive told reporters on Tuesday. 

Other car parts suppliers have given cautious outlooks during quarterly earnings, saying it’s hard to judge the availability of vital components beyond the short term. 

The outlook for thinners, a naphtha product used in automotive paint, is also becoming increasingly uncertain, the Japan Machine Tool Builders’ Association said earlier this week. 

It echoed concerns from the National General Contractors Association of Japan, an organization representing building contractors across the nation who warned of imminent project cancellations due to the unstable supply of products derived from the material. 

“There are delays and disruptions in the delivery of building materials, and we are coming to a point where we can’t avoid having to delay or cancel construction” projects, the group said in a statement.

Even if the government has secured enough naphtha overall, the types needed by each company are different, said Takahide Kiuchi, an economist at Nomura Research Institute. “Differences in composition and grade can create a mismatch between macro-level supply and micro-level needs,” he said. 

Companies will need to share information to prevent unnecessary fears of shortages, he added.

Takaichi noted on social media that she was aware of supply concerns from the plastic packaging industry, adding that the government will continue to do what it can to ensure there is no disruption to the distribution of food products. 

Plastic packaging makers are already demanding higher prices, according to a report by consultancy Teikoku Databank, leading food manufacturers to pass through costs as early as this summer.

“As production is scaled back at each stage of the naphtha-based supply chain to conserve raw materials, output — particularly of downstream goods such as daily necessities — declines sharply,” said Kiuchi. “This situation is unlikely to ease quickly.” 

In a phone call with Iranian President Masoud Pezeshkian on Thursday that lasted about 20 minutes, Takaichi pressed Iran to ensure the safe passage of vessels through the Strait of Hormuz, according to a statement from Japan’s Foreign Ministry. 

The call came after a Japan-affiliated vessel was allowed passage through the strait on Wednesday. Takaichi expressed strong hopes that Iran and the US would resume talks to reach a final agreement, and the two leaders agreed to continue communicating, according to the statement. 

As Japan heads into a long weekend, Takaichi and other members of her government will travel abroad in what will also likely be a push to shore up supply chains and strengthen energy security. 

Takaichi is set to visit Vietnam and Australia, while Foreign Minister Toshimitsu Motegi is touring Africa. Former Prime Minister Fumio Kishida spoke with Philippine President Ferdinand Marcos Jr. on Thursday, pledging further cooperation on energy security and decarbonization.

(updates with details about the impact on companies)

©2026 Bloomberg L.P.

Brent for July rose above $111 a barrel, while West Texas Intermediate was near $106 — up 12% this week. In a written statement, Iran’s supreme leader Mojtaba Khamenei cast doubt on the likelihood of a deal with the US, vowing not to give up the Islamic Republic’s nuclear or missile technologies, and signaling Tehran would keep control of the strait.

Oil has soared more than a quarter over the past two weeks as the deadlock in negotiations extends the near-total closure of the crucial waterway, which before the war carried about a fifth of the world’s crude. The uncertainty over future supply has seen sharp price swings, and a flattening of the futures curve. 

“Selloffs are approached cautiously, but the bandwagon fills up on moves higher,” said Carl Larry, an oil and gas analyst at Enverus. “Every day continues to be an adventure, but also a chance to make money...quickly.”

Volumes were below normal in Asian trading. Markets are closed in many nations — including China, Singapore, Germany, France and Brazil — for Labor Day.

Meanwhile, Japan’s top currency official said authorities in Tokyo are maintaining readiness to intervene in the crude oil futures market, where speculative moves have been affecting the currency. Japan stepped into the currency market on Thursday to buy yen and bolster the currency, according to a person familiar with the matter, which caused the biggest drop in the Bloomberg Dollar Spot Index since January.

ConocoPhillips is warning of imminent “critical shortages” of oil for some nations as the war enters its third month. The supply pinch appears likely to significantly worsen as soon as June, Chief Financial Officer Andy O’Brien told analysts during a conference call on Thursday.

“The markets sort of had a bit of a grace period initially when the tankers that left the Persian Gulf in late February were still on the water; now all of those have reached their destination,” O’Brien said. “We are going to start to see some import-dependent countries potentially start to face critical shortages as we get into the June-July time frame.”

Meanwhile, the gap between paper and physical prices is narrowing as tangible domestic tightness begins to materialize for the first time since the war began. US crude exports surged to a record last week as global buyers tapped American producers for barrels to replace lost supply from the Middle East.

©2026 Bloomberg L.P.

Prices have surged above $200 a barrel, with inventories remaining tight, according to Société Générale analysts, as the bloc faces a complete halt of imports from the Middle East.

The supply disruption, triggered by the US-Israel conflict with Iran and closure of the Strait of Hormuz, comes as airlines prepare for peak summer travel.

European aviation vulnerability

Amid these developments, Kpler says that losses through the Strait have slashed the total global seaborne jet supply by nearly 21%.

Europe has historically relied heavily on the Middle East; it accounted for about 60% of external jet fuel imports to European OECD countries last year. Aviation in these nations consumes approximately 1.6 mbpd of jet fuel and kerosene daily, Société Générale says. Regional refinery production is about 1.1 million barrels, leaving a 500,000 bpd deficit covered by imports.

The International Energy Agency (IEA) previously warned Europe could face shortages by June if it doesn’t replace more than half of its regular Middle Eastern supplies. 

Limited alternatives

But replacement options are limited. Kpler says strong Asian pricing and export restrictions in China and potentially South Korea could divert cargoes away from Europe as those countries protect domestic markets, making eastern barrels less available.

The Atlantic Basin — primarily the US Gulf Coast and West Africa — is seen as a realistic source, but only a partial replacement due to logistical constraints and limited spare export capacity.

Société Générale said US global exports of jet fuel soared to a record 442,000 bpd in early April, about 200,000 bpd above usual. Pre-war, Europe typically received 30,000-60,000 bpd of that — as of late April, it was about 200,000 bpd.

Indian cargoes remain a potential source, but EU sanctions exposure linked to Russian crude runs at Jamnagar refinery could complicate supply.

Potential African relief

Some jet fuel flow is coming from Nigeria. The Dangote Refinery, regarded by many as Africa’s largest, is operating at full capacity, producing about 24 million litres of aviation fuel a day, reports Business Insider Africa. This has enabled it to export jet fuel and other products to multiple African and international markets while serving domestic needs, and to capitalise on a huge revenue opportunity as European buyers have been willing to pay a premium. 

European refiners are estimated to earn around $15 per barrel; Dangote plant margins are more than double that, supported by access to locally sourced crude and facility scale. Dangote also sources much of its crude from the US, other African producers, and Brazil, meaning it isn’t exposed to the Hormuz closure.

Rising crude prices have boosted export demand, as Nigerian exports to Europe reached record levels of 78,000-96,000 bpd in April.

Rising prices and possible disruption

That scenario places a strain on domestic airlines in Africa, which are facing their own operational cost hikes, and highlights the tension between export-driven profitability and local affordability.

Kpler says Europe is unlikely to fully replace the Middle Eastern jet fuel it has lost in the near term. This pushes the airline industry toward increased prices and longer trade routes to rebalance flows and maintain flight schedules. But the prospect of further flight cancellations, substantial price rises on retained routes, and the knock-on damage to tourism remains.

Sweden’s energy minister said that his country currently has a good supply of jet fuel, but warned of a shortage further ahead.

European airlines have warned of the impact of high jet fuel prices, but many have played down fears of an imminent shortage, including budget airline Wizz and  British Airways IAG.

This was supported by Galp, the Portuguese refiner and a major jet fuel supplier, which said it didn’t anticipate supply disruptions ahead of the holiday travel season.

The project is a quasi-revival of the canceled Keystone XL pipeline that would have transported Canadian oil sands crude to the US and drew widespread opposition from environmentalists. Former President Barack Obama rejected the project in 2015. Trump sought to revive it during his first term, and then former President Joe Biden withdrew a key permit for it in 2021. 

With the permit, the project has effectively cleared a key US federal regulatory hurdle. 

Under Trump’s authorization, Bridger is able to construct, connect and operate pipeline border facilities at the US-Canada border in Phillips County, Montana, enabling the transport of crude oil and a host of petroleum products. Authorized facilities include not just the pipeline extending from the US-Canada border but also a shut-off valve and pumping station within 2,000 feet of it. 

Trump predicted the construction would create “a lot of jobs.”

The permit comes as the US and Canada are locked in trade disputes over Trump’s imposition of tariffs on key imports including vehicles and steel as well as an ongoing review of the North American trade pact. The signing snuffs out any fear that the cross-border venture could get swept up in broader tensions.

Charlotte Power, a spokesperson for Canadian Energy Minister Tim Hodgson, said: “We are aware of the issuance of permits to Bridger Pipeline. The Government of Canada remains focused on strengthening Canada’s position as an energy superpower, supporting North American and global energy security, and advancing the diversification of our trade partnerships.”

Bridger Pipeline LLC had sought permission to construct and operate the 36-inch pipeline that’s meant to carry some 550,000 barrels per day of Canadian crude to Guernsey, Wyoming. The route would originate near Keystone XL’s planned border crossing, raising the prospect that parts of the long-stalled project could be re-purposed.

South Bow Corp., which was spun off in 2024 from TC Energy Corp., had been considering an expansion of its pipeline system. 

“South Bow continues to evaluate the Prairie Connector project, a potential expansion of its Canadian asset base that would leverage existing infrastructure and permitted corridors to improve market access for Canadian crude oil,” spokesperson Solomiya Martoiu said in a statement. “The concept behind the Prairie Connector is to move crude oil from Hardisty, Alberta to the Canada-US border, where it could connect with downstream pipeline systems. 

Martoiu added: “The Prairie Connector project remains in early stages and is subject to ongoing commercial, stakeholder and rights-holder discussions, regulatory processes and evaluation.”

Trump has repeatedly said he wanted to revive Keystone XL, the multibillion-dollar 1,200-mile (1,931 kilometer) project once backed by TC Energy. The proposed Bridger project would originate near where the Canadian section of the canceled Keystone XL reached the US border. In Canada, sections of the line were completed before the project was canceled and the pipe was left in the ground, leaving open the prospect that those segments could be used and connected to Bridger.

Alberta Premier Danielle Smith lauded the move by Trump. “The US is our most important trading partner and we will continue to deliver energy to help secure North American energy dominance,” she said in a social media post. 

(Updates with comment from Alberta premier.)

©2026 Bloomberg L.P.

Anaconda Invest SA, a boutique hedge fund based in Switzerland, has consistently opted to disregard comments from the White House suggesting a ceasefire may be imminent, according to Renaud Saleur, its founder and chief executive. As a result, he’s stayed long oil stocks based on a bet that chronic undersupply will support demand for years to come. The hedge fund manager’s returns outpaced gains in the S&P Global Oil Index, which is up 31% this year.

“In the short term, whenever Trump opens his mouth, you can see the whole party moving as if the flow [of oil] is going to resume overnight,” he said in an interview. In reality, oil prices have stayed high as an actual truce remains elusive, he said.

Since the US and Israel attacked Iran on Feb. 28, Trump has often suggested an agreement to end the fighting may be around the corner, while adjusting the terms under which he’d be willing to accept a truce. Those mixed signals have repeatedly rocked markets, with March in particular proving a particularly tough month for many hedge funds and other investors.

Saleur, who oversees $150 million at Anaconda, first made it known last month that he and his team were ignoring statements by the US president, arguing that to do otherwise would be unmanageable. Trump “changes opinion 10 times a day,” he said then. 

Anaconda, which markets itself as a firm looking for the best way to invest in the value chain of the global energy transition, doesn’t see the war as an opportunity to add exposure to clean tech for now, Saleur said.

“Oil today is much more profitable than renewables,” he said. Saleur, whose career spans stints at Fidelity Investments and George Soros’ Quantum fund, also said Shell Plc’s acquisition of Canada’s ARC Resources Ltd., announced on April 27, has encouraged him to invest.

The firm has even been borrowing to add weight to its long positions in oil stocks, bringing its gross exposure to about 130%, according to Saleur. 

Limited Room for a US-Iran Deal

Anaconda is short tech stocks including International Business Machines Corp., as well as Nasdaq futures and firms that produce small nuclear reactors. Other short positions include the iShares Semiconductor ETF, while the fund is long Applied Materials, Inc. and Mersen, a maker of electrical specialties.

The firm has also been buying semiconductor firms that are exposed to solar power, while shorting the main index for the chip sector, Saleur said.

The fund’s biggest holdings include Schlumberger N.V., Baker Hughes Co. and Patterson-UTI Energy Inc. 

“Drilling and services is probably an area which is going to be where people are going to focus more,” he said.

©2026 Bloomberg L.P.

“If these countries significantly reduce their dependency on fossil fuels, it means that they’ll be investing in their own economy instead of importing fossil fuels from abroad,” van Veldhoven said Wednesday in an interview on the sidelines of the conference, which was co-hosted by Colombia and the Netherlands. “It means that they’ll be investing in clean technologies, but it also means that they’ll be shielding their economies against the kind of price shocks that we’re seeing currently.” 

The energy crisis stemming from the Iran war has prompted countries around the world to take emergency measures. 

“This coalition of the willing has of course brought together those countries who really feel a need to have the conversation about how to do this,” said van Veldhoven, “focusing on very concrete ideas about implementing this in their countries and learning from best practices from other countries.” 

Van Veldhoven said the priority should be near-term results, and expressed a hope “that countries don’t just focus on everything that needs to be done between now and 2050, but also really focus on what we can do in the next five years. That is where it really translates into implementation.” 

France unveiled a national road map away from fossil fuels on Tuesday. Other nations taking part in the conference include Germany, the UK, Italy, Brazil, Australia and Vietnam, as well as the European Union.

(Updates fourth paragraph with conference concluding.)

©2026 Bloomberg L.P.

“This is the return of BP to Venezuela,” the nation’s Acting President Delcy Rodríguez said during the signing event Wednesday inside the Miraflores Palace in Caracas.

She detailed the agreement covering the Deltana Platform, an oil and natural gas reservoir in eastern Venezuelan waters. BP Executive Vice President William Lin spoke at the ceremony, vowing to help Venezuela develop fields and announced the opening of a permanent BP office in Caracas, according to video of the deal signing aired on Venezuelan state TV.

Lin also offered the London-based energy giant’s experience and capacity in trading of natural gas and hydrocarbons.

The memorandum of understanding between BP and Caracas establishes “potential areas for co-operation in material gas and future exploration,” BP said Wednesday in an emailed statement. Venezuela state firm Petroleos de Venezuela SA also announced the pact.

The deal follows an energy conference in Caracas that drew large turnout from international companies and investors. European oil majors have been particularly keen to advance in Venezuela. Italy’s Eni SpA announced an oil project on Tuesday and has a plan to start exporting natural gas with Spain’s Repsol SA starting in 2031. 

Meanwhile, Shell Plc has been advancing the development of its Dragon project near the Trinidad border, and French major TotalEnergies SE is nearing trading contracts with PDVSA.

BP’s new Chief Executive Officer Meg O’Neill is looking to boost the company’s long-term reserves as it refocuses on oil and gas following a failed push into low-carbon ventures.

(Updates with remarks from Venezuela’s interim president and BP’s executive.)

©2026 Bloomberg L.P.

The global benchmark surged as much as 7.1% to eclipse $126 a barrel and hit the highest intraday level in four years, while West Texas Intermediate jumped above $110. The head of US Central Command Admiral Brad Cooper will brief Trump on Thursday, signaling a resumption of combat operations are seriously under consideration, Axios said, citing two unnamed people.

A ceasefire has held since early April but recent efforts to get negotiators from the two sides to meet have so far failed, with the US and Iran both maintaining their blockade of the the vital Strait of Hormuz. Central Command has asked for hypersonic missiles to be sent to the Middle East, which would mark the first time the American army has deployed those weapons.

The Strait of Hormuz has been effectively closed since the war started at the end of February, choking off flows of crude, natural gas and oil products, and driving up energy prices. On Tuesday, Trump discussed steps the US could take to prolong its blockade while minimizing the impact on American consumers at a meeting with oil and trading executives, the White House said.

“Trump has ripped away the security blanket the market was clinging to — the hope that the war was about to end,” said Robert Rennie, head of commodity research at Westpac Banking Corp. “Traders are now being forced to confront a much uglier reality: both sides still think they are winning, neither side has a clear incentive to negotiate, and energy prices are starting to accelerate higher.”

US Central Command has prepared a plan for a “short and powerful” wave of strikes on Iran, likely including infrastructure targets, according to the Axios report. Admiral Cooper gave the American president a similar briefing on Feb. 26, shortly before the US and Israel started the war, Axios said.

Trading volumes are thin for Brent’s June contract, which is set to expire at the end of the session. The more-active July futures advanced as high as $114.70 a barrel to the highest intraday level since June 2022.

Blockades of the Strait of Hormuz by the US and Iran have reduced daily transits to near zero. The International Energy Agency called the conflict in the Middle East the biggest supply shock in history, and Vitol Group says the market is facing a supply loss of around 1 billion barrels.

Trump told Axios separately that he would not lift a naval blockade on Iran’s ports until he secures a nuclear deal with Tehran, with Iranian officials defiant over a prolonged standoff. The US has turned away dozens of ships since deploying warships to stop Iranian vessels on April 13. 

The US is now seeking the forfeiture of two Iran-linked oil tankers that were seized by naval forces. Forfeiture, or confiscating oil cargoes, would represent an escalation of Trump’s economic offensive — and dovetail with Washington’s strategy deployed after the ousting of Venezuelan President Nicolás Maduro.

The Trump administration is also asking other countries to join an international coalition that would enable ships to navigate the Strait of Hormuz, according to a report from the Wall Street Journal, which cited an internal State Department cable sent to US embassies on Tuesday.

US crude exports surged to a record last week as global buyers tapped American producers for barrels to replace lost supply from the Middle East. Overseas shipments rose above 6 million barrels a day, eclipsing a previous high of nearly 5.3 million set in late 2023.

Some market metrics pointed to a tightening supply with the difference between Brent’s two closest December contracts strengthening to over $11 a barrel compared to around $3 two months ago.

“Somehow, another few weeks of stalemate does not look like something that will sit well with Trump,” said Vandana Hari, founder of analysis firm Vanda Insights.“ Prices have nowhere to go but up until a Strait of Hormuz reopening comes into line of sight. As of now, how and when that might happen is anybody’s guess.”

©2026 Bloomberg L.P.

China National Petroleum Corp. Chairman Dai Houliang said the company would respond to external shocks and place greater emphasis on security of supply, according to a statement following a meeting of the firm’s leaders on Wednesday. 

His remarks reiterated messaging from the Communist Party’s decision-making Politburo on Tuesday, when it met for the first economy-focused meeting since the war in Iran broke out. 

The war, now in its third month, has caused the largest disruption to oil and gas supplies in history, and shows no signs of letting up. Brent oil rallied to a wartime high Thursday after Axios reported that US President Donald Trump is set to receive a briefing on new military options for action in Iran, signaling the potential for a fresh escalation.

China has benefited from years of efforts to cushion itself from global oil volatility that include building up massive crude reserves, shifting its energy system toward coal and renewables, and electrifying major consuming sectors like transportation and heat. Still, the country is the world’s largest oil and gas importer, and the conflict’s impacts have already been felt in refinery cut-backs and higher power prices in some regions.

©2026 Bloomberg L.P.

On that front, Abu Dhabi’s move could prove constructive rather than disruptive.

The UAE enters this phase of market upheaval with one of the most credible and flexible supply profiles in the world. It was pumping around 3.4 million b/d before the start of the Iran war and claims maximum capacity of 4.85 million b/d, with further expansion to 5 million b/d targeted by 2027.

That spare capacity — freed from the constraints of coordinated output policy — will position the UAE as a key driver of supply recovery in the weeks and months following a reopening of Hormuz.

From constraint to catalyst

For now, the UAE’s production remains capped by logistics.

With the Strait of Hormuz effectively shut, exports are limited to volumes that can be routed via the Habshan-Fujairah pipeline, which has a capacity of around 1.5-1.8 million b/d.

This constraint masks the significance of the UAE’s policy shift. Even though it is theoretically free to ramp up production immediately, the physical impact is deferred until flows resume.

Once Hormuz reopens, however, the dynamic changes rapidly.

The UAE will be uniquely positioned to pivot from constrained producer to supply stabiliser — bringing incremental barrels to market just as buyers scramble to rebuild inventories and restore disrupted supply chains.

Aside from Fujairah in the Gulf of Oman, the UAE has crude loading facilities at Das Island, Jebel Dhanna and Zirku Island, which have been rendered inoperational by the Hormuz closure.

A measured ramp, not a supply shock

Crucially, the UAE is unlikely to flood the market.

A ramp-up towards 4.85 million b/d will take time — likely months rather than weeks — even under optimal conditions. That points to a gradual, controlled increase in supply that helps ease tightness without triggering a destabilising price collapse.

The reopening of Hormuz will not instantly restore equilibrium.

There will be a lag between the resumption of shipping and the arrival of crude into consuming markets, particularly in Asia. With typical voyage times of four to six weeks, inventories across key importing regions will continue to draw down even after the first cargoes leave the Gulf.

Focus on incremental supply

Not all the Gulf producers will be able to ramp up output all the way to pre-war levels evenly and quickly. Kuwait, for one, has said it would need three to four months to return to full capacity after the war ends. That is broadly the estimated timeline for other producers in the region, with the possible exception of Saudi Arabia, which may be able to go faster. Other problems may crop up, either subsurface, or due to above-ground infrastructure damage, as producers try to raise output towards full capacity.

The expected lag creates a window where incremental supply is most valuable.

Here, the UAE’s ability to ramp up — combined with its export flexibility — becomes a key accelerant in the normalisation cycle. Additional barrels can help bridge the gap between initial flow resumption and the full restoration of supply chains.

Fujairah, which has emerged as a major regional trading and bunkering hub, has an estimated 80 million barrels of oil storage capacity. It can serve as an additional buffer, allowing for faster mobilisation of exports and more responsive supply management once flows resume.

Fujairah is also one of the few storage hubs globally where oil inventory data is published on a weekly basis, providing a critical layer of transparency.

Asia stands to benefit most

The geographic distribution of the UAE’s exports amplifies this effect.

The country exported an average of 2 million b/d of crude in 2025, with nearly all of it destined for Asia. That concentration aligns closely with where the current disruption is being felt most acutely.

Asian importers — heavily reliant on Middle Eastern crude — have borne the brunt of the Hormuz closure. For them, the prospect of increased UAE supply post-reopening is not just helpful, but critical.

Unlike some producers, notably Saudi Arabia and to a lesser extent other term-heavy Mideast exporters, the UAE offers a high degree of commercial flexibility. It sells a meaningful share of its crude on the spot market in addition to term contracts, with no destination restrictions. This openness, reinforced by the launch of Murban futures trading on the IFAD exchange in March 2021, enhances liquidity and enables buyers to respond quickly to shifting market conditions.

That means Asian refiners will be able to access additional barrels without the friction of rigid contractual constraints — a key advantage in a volatile recovery phase.

From disruption to rebalancing

The UAE’s exit from OPEC and OPEC+ does not, in itself, change the immediate supply picture. The physical impact has been delayed by the Hormuz disruption, leaving the market focused on geopolitical risk rather than policy shifts.

The implications will become clearer once flows resume.

In a post-crisis environment defined by depleted inventories, fragile logistics, and cautious demand recovery, the speed of normalisation matters as much as the volume of supply. The UAE’s ability to deliver both — flexibly and progressively — positions it at the centre of that process. Rather than amplifying volatility, its exit may help shorten the disruption cycle and accelerate the market’s return to balance.

While some energy sector revenues have been impacted by the Middle East conflict, bp reported first-quarter profit more than doubled year-on-year to $3.2 billion, its highest since 2023.

Italian oil and gas group Eni reported first-quarter adjusted net profit of $1.5 billion, down from $1.6 billion a year earlier.

Long-term supply streams

Both bp and Eni have benefited from oil price spikes caused by the US-Israel conflict with Iran and the closure of the Strait of Hormuz. Both also have diversity plays that can produce hydrocarbons away from that choke point.

Eni’s oil and gas production rose 9% in Q1, supported by projects in West Africa and Norway, start-ups in Angola, and robust operational continuity.

This growth helped offset Middle East disruption. Meanwhile, exploration added about 1 billion barrels of oil equivalent, with discoveries in Angola, the Ivory Coast, and Libya providing a positive outlook for the future.

Eni has been aggressively expanding its exploration portfolio, focusing on ‘near-field’ exploration to target new resources close to existing infrastructure and accelerate time-to-market.

This includes major gas discoveries in Indonesia’s Kutei Basin, Timor-Leste, and Sierra Leone, where Eni is committed to exploring offshore blocks. It also maintains gas interests in Kazakhstan and Mexico’s Sureste Basin.

Collectively, these projects could add 300-400 million barrels of new resources annually to Eni’s production base.

Reducing regional exposure

Similarly, bp has experienced limited disruption from the Strait crisis and maintains a reasonably diversified upstream pipeline with great potential. New CEO Meg O’Neill is set to further ramp up oil and gas investments. For instance, bp’s Bumerangue discovery in Brazil’s offshore Santos Basin, announced last year, potentially includes about 8 billion barrels of oil equivalent.

Other industry leaders, such as Shell, TotalEnergies, and ExxonMobil, also operate hugely diverse oil and gas fields, with geographically varied portfolios spanning offshore, LNG, and shale projects — across 70 countries in the case of Shell. US supermajors ExxonMobil and Chevron have production diversity via Permian shale and massive projects in Guyana and Kazakhstan.

These companies, along with bp, have been actively rebalancing their portfolios, combining legacy onshore oil with deepwater developments and LNG to hedge against market volatility.

High-impact exploration in vogue

Wood Mackenzie recently said ‘Big Oil’ is warming to high-impact exploration. Success in ultra-deep water projects — depths greater than 1,500 metres — can deliver substantial rewards.

This renewed focus follows a series of high-value-creating discoveries over the last five years, including ExxonMobil in Guyana, Eni in Cyprus, and TPAO in the Black Sea.

“Frontier explorers are widening the net to under-explored basins, including Brazil’s Foz do Amazonas, as well as extensions of existing plays in Angola, Suriname and elsewhere,” said Wood Mackenzie.  

Despite these efforts, it revealed an “enormous and ongoing challenge” for the upstream industry.

“For liquids alone, today’s onstream fields will fall short by 300 billion barrels of the almost 1,000 billion barrels needed to meet cumulative demand through 2050 under our base case, absent reserve upgrades,” the analysts added. “Exploration can add not just volume but value by finding advantaged barrels to displace higher-cost or otherwise disadvantaged resources, whether oil or gas.”

The Meta complex requires so much energy that Entergy is building 10 new gas power plants to supply it with electricity. Dubbed Hyperion, the AI-focused data center in Richland Parish will be Meta’s largest. Entergy has said the 10 plants will aim to provide more than 7 gigawatts of power — equal to the output of seven large nuclear reactors.

The enormous electricity demands of data centers and artificial intelligence have transformed the US power sector, with utilities rushing to build out generation and transmission to land large facilities in their territory. Since regulated utilities earn their profits by building infrastructure and passing on the costs to their customers, data centers represent a significant opportunity to increase their earnings.

Since most of those new plants won’t come online until 2030 or 2031, not all the spending to finish them is included in the $57 billion plan disclosed Wednesday by the utility, Chief Financial Officer Kimberly Fontan said on an earnings call. Entergy previously had $43 billion earmarked for its four-year capital spending plan. The companies have said Meta agreed to pay for the new infrastructure and the costs won’t be borne by Entergy’s other customers.

Entergy said last month that its agreement with Meta is structured to ensure the tech company pays its full cost of service, with the plan set to deliver about $2.65 billion in savings to other utility customers.

©2026 Bloomberg L.P.

The increasingly widespread issues are adding to headaches for producers and traders already grappling with the biggest oil supply shock in history, and threaten to haunt key Middle Eastern energy markets long after shipping through the Strait of Hormuz resumes, industry executives said. 

In one example, a unit of PetroChina Co. has clashed with Shell Plc over a cargo of Emirati crude that was due to load in March, according to people familiar with the matter. TotalEnergies SE is also in dispute with Shell over several other Middle Eastern energy trades, separate people said, asking not to be identified discussing confidential information. The conflicts have also drawn in an exchange where one of the region’s main oil price benchmarks is set. 

One senior executive at a trading house said that the scale of disputes and uncertainties surrounding cargoes from the Middle East was so large that — taken all together — it could impact his company’s profits by $500 million in either direction, depending on how they are each resolved.

In some instances the disputes have arisen because producers cut their production levels. In others, buyers with contracts under which they are responsible for lifting oil from ports in the Middle East have said they were unable to secure ships to load it due to the near-total closure of the Strait of Hormuz — leading sellers to terminate the contracts, and in some instances seek damages.

Complicating the situation is the fact that cargoes of oil are typically bought and sold many times before any oil is actually loaded onto a tanker, creating a web of interconnected exposures. The cargoes trade in lively bilateral over-the-counter markets, as well as underpinning billions of dollars of derivatives. 

Several of the people said that the proliferation of disputes over contracts that generally refer to English law meant it had become hard to find major law firms in London to take on new cases, as many of them were already representing another party in the conflict.

“At some point a settlement will come and the crisis will probably be over. We expect a lot of claims, a lot of contractual disputes, a lot of force majeure interpretation, a lot of legal battles around that,” Guillaume Vermersch, chief financial officer at Mercuria Energy Group Ltd., said at the FT Commodities Global Summit last week. His comment was echoed by his counterparts at Vitol Group and Trafigura Group.

The dispute involving Shell and the PetroChina unit centers on the market for the United Arab Emirates’ flagship Murban crude, which is traded both via futures on the ICE Futures Abu Dhabi (IFAD) exchange and in OTC markets. In mid-March, Abu Dhabi National Oil Co. told its equity partners in the onshore concession that produces Murban crude that they would be able to lift just 80% of their remaining volumes for the remainder of the month.

While much of the region’s oil flows have been choked off by the war, the UAE has continued to supply oil via a pipeline to Fujairah, which bypasses the Strait of Hormuz.

Disputed Cargo

The dispute relates to a 500,000 barrel cargo of Murban that was due to be delivered via the IFAD contract. The cargo was bought and sold numerous times by companies including Shell, CNOOC Ltd., Total, Mercuria and PetroChina, according to people familiar with the matter. Ultimately, it was due to be delivered by PetroChina to Shell as settlement for contracts on the IFAD exchange.

However, instead of the 500,000 barrels that is standard on the exchange, the cargo — which was due to load onto a tanker on March 21 — was declared to contain only 62,000 barrels, the people said. 

Shell is now demanding that the PetroChina unit pay around $35 million in compensation for failing to deliver the full volume of the cargo, and has reported the issue to IFAD, which is investigating, some of the people said.

However, Shell itself was a seller of the same, reduced-volume cargo on the over-the-counter market at an earlier stage of the chain of buyers, the people said. PetroChina is arguing that Shell therefore bears responsibility for the delivery failure it is complaining about.

Shell has stated that the reduction in volume was imposed on it by its own supplier but has not provided further detail or evidence of this, some of the people said. 

Any resolution is likely to depend on the different legal statuses of exchange-traded Murban contracts, which are cleared through a unit of InterContinental Exchange Inc., and OTC contracts, which are generally uncleared and reliant on the specific contractual terms between the two parties.

The separate disputes between Total and Shell involve a number of different grades of Middle Eastern oil, including Murban, the people familiar with them said.

Shell, Total and ICE declined to comment. Mercuria, PetroChina and CNOOC didn’t reply to requests for comment.  

Launched in 2021, the Murban contract is a key part of the Middle Eastern oil market. Alongside the older Oman and Dubai benchmarks, it underpins the price of the region’s oil exports as well as derivatives markets that until the war had been growing steadily.

Still, the disputes could deal a blow to confidence in the markets. Since the war began, open interest and trading volumes in Murban futures have plunged to the lowest in four years.

©2026 Bloomberg L.P.

The deal involves merging the company with Arlington’s more broadly focused engineering firm Pond & Co. and then operating under the Enercon name, Arlington said in a statement reviewed by Bloomberg News. The combined entity will have more than 2,700 professionals and its headquarters in the Atlanta area.

Arlington acquired the majority stake with a $1.25 billion equity investment, according to people familiar with the matter, who asked not to be identified discussing private information. 

A spokesperson for Arlington declined to comment on the size of the investment or Enercon’s valuation in the transaction. A representative for Oaktree didn’t immediately respond to a request for comment.

Enercon provides specialized nuclear engineering and licensing support to commercial and federal customers, covering 90% of nuclear power plants in the US, according to the statement.

Demand for nuclear power has grown with the rise of data centers and their need for new energy sources. The sector fits Arlington’s longtime focus on government-regulated industries, said Michael Lustbader, a managing partner at the private investment firm.

This is “the beginning of a really large wave of nuclear, both at the large-scale level and the small modular reactors for each of the hyperscalers looking at their own ways to be able to use nuclear energy in order to fund their own individual data- and AI-related energy needs,” Lustbader said in an interview.

“There is now widespread bipartisan support,” he said, including “obviously tremendous support from the Trump administration, and pretty much all of the bluest of the blue states.”

Bethesda, Maryland-based Arlington completed its acquisition of Pond earlier this year, according to a statement in January. Lustbader said the firm is “absolutely” looking at more acquisitions to add to the newly combined entity.

While small reactors being developed for commercial use have attracted investment and attention, new large-scale nuclear power plants are also expected to figure in Enercon’s growth, said Gordon Auduong, a managing director at Arlington.

Enercon was sold to Oaktree for an undisclosed price in 2023 by AE Industrial Partners, which had acquired it two years earlier.

Founded in 1999, Arlington has raised more than $14 billion, including the $6 billion Fund VII, which Lustbader said was tapped with a previous fund for the Enercon acquisition.

Houlihan Lokey and law firm Gibson, Dunn & Crutcher advised Arlington and Pond, according to the statement. Harris Williams and Kirkland & Ellis advised Enercon and Oaktree.

©2026 Bloomberg L.P.

Eurowind Chief Executive Officer Jens Rasmussen will continue to lead the firm and remain invested alongside Norlys, Denmark’s largest integrated energy and telecom group, according to a statement reviewed by Bloomberg News. 

Blackstone’s investment represents a minority stake in Eurowind, according to people familiar matter with the matter, who asked not to be identified discussing confidential information. The deal will provide capital to accelerate Eurowind’s renewables development activities at a time when power demand in Europe is ratcheting up.

The transaction, led by Blackstone Infrastructure, marks one of the largest sponsor-backed investments in a private renewables developer. The value of deals in the broader renewable energy sector has fallen around 18% this year to roughly $20 billion, data compiled by Bloomberg show. 

Based in Hobro, Denmark, Eurowind’s business includes onshore wind, solar, battery storage and biogas operations. With about 700 employees, it has a presence across 16 markets in Europe.

Blackstone has struck several deals in European infrastructure in the past year or so, including an acquisition of a minority stake in UK airport operator AGS and a deal to buy Spanish waste services company Urbaser with EQT AB. Blackstone’s infrastructure team, alongside its real estate business, are also investors in all of the firm’s European data centers.

Financial sponsors including Blackstone have all been talking about an increased investment focus on real, tangible assets, with the firm’s President Jonathan Gray citing a need for “terra firma.”

Blackstone sees the opportunity to invest in more than $500 billion of European assets by 2035, including in the energy transition, energy security, electrification, re-industrialization and digitalization.

(Updates with dealflow data in fourth paragraph. An earlier version of this story corrected a description of where the Eurowind transaction ranked.)

©2026 Bloomberg L.P.

Two regions in the state’s far west — the Bancannia Trough and the Pondie Range Trough — are open for prospecting, the NSW government said in a statement on Wednesday. Exploration license application fees will be cut to A$1,000 ($716) from A$50,000 to attract interest, it said.

The move highlights the challenge for the federal government as it tries to balance supply risks and targets to cut emissions, which it’s in danger of missing. There’s a need for additional natural gas supply from 2030 as fields on the east coast rapidly deplete, the Australian Energy Market Operator said in a report last month.

Industry lobby group Australian Energy Producers welcomed the move, calling it a “critical step” toward strengthening the state’s future energy security. The NSW government will open an Expression of Interest process for exploration licenses from May 1, AEP said.

The state government said any projects would still face planning approvals and environmental assessments. About 40% of New South Wales’ gas demand comes from industry, and the fuel continues to play a role in firming the grid alongside growing renewable generation, it said.

©2026 Bloomberg L.P.

While there is possibly a greater angle to it, the economic rationale seems clear and convincing.

For years, the UAE has been following a long-term strategy aligned with their perception of the structural shifts in the energy market and beyond. This strategy includes past and ongoing substantial investments into oil and natural gas output, petrochemicals production, liquefied natural gas (LNG) exports, and pipeline and rail networks, not to mention the broader economic diversification beyond the energy business that brought the country to where it is today.

OPEC is anything but a cohesive group, with its members’ objectives aligned more opportunistically than strategically. From that perspective, the group’s cohesion over the past years was surprising, not least given the well-visible rifts. Specifically, Saudi Arabia and the UAE shared different views on oil policies earlier this decade.

Saudi Arabia pushed for production curbs; the UAE favoured a swifter normalisation and curtailment phase-out so that it could monetise its investments and capacity expansion. With the exit from OPEC, this greater flexibility and independence is granted. While the exit limits OPEC’s influence somewhat on paper, the de-facto leader and key policy implementer over the past years was Saudi Arabia, who not only showed the direction but also always did the heavy lifting in terms of production curtailments.

The petro-nations’ track record is streaked. Supply cuts stabilised prices during demand shocks such as in 2020 or propped up prices during phases of emerging tightness such as in 2021, but they are effective only temporarily and come with the risk of market share losses. This has been most evident since 2022 and with the advance of US shale oil and South American deepwater oil.

OPEC’s challenge is not the UAE’s exit but the tectonic shifts in the oil market more broadly. Besides US shale oil and South American deepwater oil, the energy transition, the shift to plug-in autos and trucks, and the shift to natural gas derived petrochemical feedstocks brings peaking oil demand.

In such a market environment, competition usually increases. These challenges are best addressed without any political constraints. The UAE’s exit from OPEC matches our longer-term view on the oil market, where ample supplies and increased competition anchor prices in the high $60s, a setting that emerged last year, and a setting that is very likely to return past today’s geopolitical turmoil.

The impact of the exit on regional politics goes beyond our expertise, but it comes at a time of greater realignment of relationships in the region and could advance the solution finding within the ongoing conflict.

Conflict-related disruptions, including the ongoing Strait of Hormuz closure, have cut into earnings. But two significant players anticipate that spending on oil exploration and production will rise in the future.

Leading oilfield services companies SLB and Baker Hughes said tighter global supplies, driven by ‌the war, have highlighted the need for investment.

Rise in spending forecast

The Middle East is the biggest market for those companies, accounting for more than a third of quarterly income.

Baker Hughes’ revenue slipped 19% to $1.15 billion in the region, while SLB saw a drop of 10% in the first quarter to $2.69 billion in revenue from the Middle East and Asia. Halliburton had earlier reported a 12.7% slide in Middle East revenue.

Asian and European countries have scrambled for supplies as the closure of the Strait halted the movement of 20% of global oil and shut in 9 mbpd of oil production. LNG and products such as fertilisers have also been hit.

This has intensified calls for supply diversity and energy security at a time when the industry is pursuing an energy-addition strategy rather than a transition to provide sufficient, reliable, and affordable energy.

“There is a growing need for increased upstream investment to expand global production capacity and ensure we can meet rising demand."
- Lorenzo Simonelli, Chairman and CEO of Baker Hughes

Lorenzo Simonelli, CEO of Baker Hughes, told a post-earnings conference call that he saw potential acceleration of investment decisions for North American LNG projects.

“There is a growing need for increased upstream investment to expand global production capacity and ensure we can meet rising demand,” he said.

Olivier Le Peuch, CEO of SLB, also anticipates increased investment in projects in North America and Latin America, including deepwater offshore markets, as many countries are likely to prioritise supply diversification and invest in exploration post-war.

Demand for these companies’ services may recover as repairs and reconstruction of war-damaged energy infrastructure begin. Saudi Arabia, UAE, Bahrain, Qatar, Iraq, and Kuwait were all targeted by Iran.

Rystad Energy has forecast a bill of up to $58 billion. However, Karan Satwani, Senior Analyst, Supply Chain Research, warned the situation was not just about damaged Gulf facilities, but “a stress test” for the entire energy supply chain.  “The same equipment and contractors needed to rebuild are already committed to a wave of LNG and offshore projects sanctioned since 2023,” he said.

“Repair work does not create new capacity; it redirects existing capacity, and that redirection will be felt in project delays and into inflation far beyond the Middle East.”

Olivier Le Peuch, CEO of SLB, anticipates increased investment in projects in North America and Latin America, including deepwater offshore markets, as many countries are likely to prioritise supply diversification and invest in exploration post-war.

James West, analyst with Melius Research, anticipates “seasonal recoveries around the world and a resurgence of activity in the Middle East” as the conflict winds down.

He said: “2027 and 2028 are expected to be strong years of growth given the change in oil market fundamentals due to the Middle East conflict.”

Several countries have expressed willingness to join an international mission led by France to protect shipping in Hormuz when conditions allow.

This comes as TotalEnergies CEO Patrick Pouyanne warned of potential fuel shortages if Hormuz remains locked.

“If ‌it lasts two, three months more, we are entering a world of scarcity of energy, which Asian countries have already suffered,” he told the World Policy Conference, near Paris. “You cannot have 20% of the oil and gas of the planet being stranded and not accessible without major consequences.”

Hydrogen molecules are the smallest of all gases, allowing them to escape through microscopic gaps in seals and joints. This constant leakage is an economic loss and a major safety hazard due to hydrogen's wide flammability range of 4% to 75% in air and its very low ignition energy.

Material integrity is another critical concern. Hydrogen can weaken metals through hydrogen embrittlement, leading to unexpected failures in compressor parts — such as impellers and shafts — unless special materials, including austenitic stainless steels, are used.

Maintaining the 99.99% purity level is equally difficult because oil-lubricated compressors risk contaminating the gas. While oil-free designs are preferred, they are often more complex and expensive. Additionally, hydrogen's thermodynamic properties lead to rapid temperature rises during compression, creating an overheating risk that necessitates intercooling between stages.

Because no single technology perfectly handles high flow, high pressure, and ultra-purity simultaneously, the industry generally selects equipment based on specific application needs:

• Integrally geared centrifugal compressors are excellent for large-flow volumes and provide an oil-free path, making them ideal for bulk handling in green hydrogen plants.
• Barrel centrifugal compressors are similarly robust for large-scale infrastructure and pipeline networks. For applications requiring very high pressures — such as storage or mobility — oil-free reciprocating piston compressors are the traditional choice, although maintenance-intensive.
• Diaphragm compressors serve as "purity champions" for speciality applications such as fuel cells, offering zero risk of oil contamination and minimal leakage, despite their limited flow capacity.

In many real-world green hydrogen plants, a hybrid system — using centrifugal compressors for high-flow initial stages and reciprocating compressors for final pressure boosting — is the most practical way to balance efficiency and cost.

Ebara Elliott Energy (EEE) supports this evolving industry by leveraging a long track record in hydrogen-rich compression dating back to the 1950s. Our deep domain expertise allows us to build tailor-made solutions that account for hydrogen’s low molecular weight and high stage requirements.

To ensure the long-term reliability essential for global supply chains, EEE and Ebara are constructing a new, full-scale commercial testing and development centre in Futtsu City, Chiba Prefecture, Japan. This facility is the first of its kind, equipped with actual fluid test capabilities for liquid hydrogen pumps at scale, reinforcing EEE’s position as a trusted solution provider.

EEE’s centrifugal compressor portfolio also includes both horizontally and vertically split designs that can be customised for everything from electrolyser bulk compression to large-scale transport. These systems are designed to support electric motor drives with variable frequency drives (VFDs), which lower onsite emissions and integrate seamlessly with renewable power grids.

Beyond providing hardware that complies with stringent API norms and ensures oil-free operation, EEE offers comprehensive lifecycle support through its global service network, including installation, maintenance, and reliability upgrades. This end-to-end support ensures high uptime for the demanding duty cycles of the hydrogen energy value chain.

US data center capacity may reach 110 gigawatts by 2030, and total US spending on power-plant equipment may climb to $215 billion. 

The staggering growth reflects the massive buildout of computing systems in the US, where the race to deliver artificial intelligence systems has been deemed a matter of national security by the Trump administration. Data centers accounted for less than 2% of the power-equipment market in 2020, but the energy-hungry facilities are expected to drive 68% of total load growth through 2030.

“The scale of planned development underscores the urgency,” according to the report. “Even accounting for expected project attrition, grid-connected data center capacity is expected to nearly quadruple in the next four years.”

Still, the boom in energy demand is driving up costs and wait times for power-generation equipment, a shift that will hinder development. About 600 gigawatts of proposed data center projects is still working to line up electricity supplies, compared with 183 gigawatts that have signed construction or power-supply deals with utilities, the report found. 

(Corrects data in headline, first and second paragraphs.)

©2026 Bloomberg L.P.

The increased capacity allows Citadel to pick up the gas in Colorado’s Piceance Basin and deliver it to two different points in Arizona near California’s southeastern border. As of April 1, the company holds approximately 100 million cubic feet per day of transportation capacity on Kinder Morgan’s El Paso Natural Gas Pipeline through March 2031. That’s up from about 73 million cubic feet per day at the start of the year, according to company data analyzed by Bloomberg.

The expansion comes as analysts forecast growing gas demand to generate electricity for AI data centers in Arizona, with the state becoming “a quickly growing hotspot for data center development,” according to a BNEF report.

At the same time, some of the gas currently serving the Southwest market, from the Permian Basin of West Texas and Southeast New Mexico, is set to be redirected east toward a wave of liquefied natural gas export terminals being built on the US Gulf Coast this decade. That could create a vacuum of gas supplies in the Southwest, “creating a competitive opportunity for Rockies gas supply to step in,” according to an April report from consultancy Wood Mackenzie.

While higher extraction costs have kept Rockies supplies from growing at the same pace as larger basins near the Gulf Coast and Northeast, “suddenly it looks like a case of ‘right place, right time, right economics’ for Rockies gas,” Wood Mackenzie said.

Gas trading has been a key driver of profits for Citadel. Traders have been increasingly drawn to the physical US gas market in recent years as heightened volatility rewards those with the ability to transport and store molecules, allowing them to take advantage of arbitrage opportunities not always available to strictly financial traders.

Citadel declined to comment for this story.

(Updates with context on extraction costs in the fifth paragraph.)

©2026 Bloomberg L.P.

Tehran wants the critical waterway for oil and gas shipments open “as soon as possible, as they try to figure out their leadership situation,” Trump said on Truth Social on Tuesday. Iran has said it’s in a “State of Collapse,” he added. 

The US leader on Monday convened his national security team to discuss an Iranian proposal to end the conflict, which began with US and Israeli airstrikes on the Islamic Republic on Feb. 28. The US has been blocking ships going to and from Iranian ports to try and squeeze the country of oil revenue, while Iran keeps the strait shuttered to almost all other traffic. 

Iran, which hasn’t reacted to Trump’s post, has consistently said it will not open the strait as long as the US maintains its blockade. The White House is playing up divisions among Iran’s leaders, claiming that’s a reason for the diplomatic stalemate between the two counties.

Brent crude rose above $111 a barrel, bringing the gain this week to almost 6%, as concern grows of a protracted peace process that could keep Hormuz shut for an indefinite period.  

The war’s ripple effects were underscored when the United Arab Emirates announced on Tuesday it was leaving OPEC, dealing a blow to the oil cartel and its leader Saudi Arabia. The UAE, which can pump more crude than is allowed under its OPEC quota, has long chafed at the group’s restrictions.

“The decision is taken at the right time in our view because it’s not going to hugely impact the market: the market is undersupplied,” UAE Energy Minister Suhail Al Mazrouei said. Abu Dhabi believes the shortages caused by the war will require agility to respond to market demands, he said.

Iran has signaled it may be willing to accept an interim deal to reopen the Strait of Hormuz in exchange for Washington ending its blockade of Iranian ports, while postponing more complex negotiations over the country’s nuclear program. It is insisting on keeping some control over shipping through the strait, which Washington is unlikely to accept.

The president has told his advisers he’s not satisfied with Iran’s latest suggestions, the New York Times reported, citing multiple unnamed people briefed on the discussions. While it’s unclear why, his administration has previously said any deal must include agreements to curb Iran’s nuclear activities.

The warring sides started a ceasefire around April 7 and hostilities may resume if they fail to agree to fresh talks, following an inconclusive first round in Pakistan in mid-April.

Iran’s offer to end the war is “better than what we thought they were going to submit,” Secretary of State Marco Rubio told Fox News. Yet the White House has “questions about whether the person submitting it had the authority to submit,” he said, echoing previous US claims that Iran’s leaders are divided over their negotiating strategy.

The strategic Strait of Hormuz, through which a fifth of the world’s oil and liquefied natural gas flowed before the conflict began, remains at a virtual standstill.

Foreign leaders are increasingly frustrated with the diplomatic impasse and the continued closure of the waterway, which has led to fuel rationing across much of Asia and Africa and fears of a global economic slowdown. German Chancellor Friedrich Merz said the US was being “humiliated” by Iranian leaders and he didn’t see “what strategic exit the Americans are now choosing.”

The first LNG shipment since the war began appears to have traversed the waterway to exit the Gulf. The Mubaraz, which loaded a cargo from the UAE around early March, is now passing the southern tip of India, according to ship-tracking data. It’s unclear what led to the vessel opting to make the journey.

Here’s more on the US-Iran talks and Lebanon:

• US Senator Lindsey Graham, a Trump ally, said on X he was skeptical of Iran’s proposal: “Clearly, if this offer is accurate, Iran is playing games. Mr. President, stick to your guns for the good of the nation and the world.”
• Iran’s Foreign Minister Abbas Araghchi, on a visit to Russia on Monday, told President Vladimir Putin that Tehran was committed to strengthening the partnership between their nations. Moscow is one of Tehran’s closest partners.
• The ceasefire between Israel and Hezbollah in Lebanon remains shaky, with each side accusing the other of attacks that breach the terms of the agreement. The Israeli military, on Monday afternoon, said it was striking Hezbollah infrastructure sites in the Bekaa valley and across southern Lebanon.

(Updates with Trump comment starting in first paragraph.)

©2026 Bloomberg L.P.

The deals mark the latest step in the administration’s push to stymie the nascent US offshore wind industry opposed by President Donald Trump and boost investment in fossil projects.

Bluepoint Wind, which is partially owned by investment firm BlackRock, Inc., and Golden State Wind will relinquish their leases and be reimbursed for costs, according to the department. The moves come in exchange for plans by the companies to direct hundreds of millions of dollars into US fossil fuel development.

“We welcome the opportunity to engage constructively with the administration on this agreement and acknowledge the clarity they have provided with this decision and deal,” said Michael Brown, chief executive officer of Ocean Winds North America, a 50% owner of Bluepoint Wind and Golden State Wind.

The agreements are similar to a deal announced last month by the administration in which it released TotalEnergies SE and its partners from $1 billion in offshore wind leases to redirect investment toward oil and natural gas projects in the US.

Bluepoint, which is 50% owned by Global Infrastructure Partners, has committed to invest as much as $765 million — equivalent to the value of its lease —  into an unspecified US liquefied natural gas facility, per the Interior Department.

Some oppose the divestment in wind projects, arguing that the move undermines the mounting energy needs of the US.

“This is a double whammy for Americans, wasting their tax dollars and halting affordable energy projects,” said Kit Kennedy, managing director for power at Natural Resources Defense Council.

Golden State Wind, which was in the early stages of developing a floating offshore wind project, agreed to terminate its lease off Morro Bay, California. The company will be eligible to recover about $120 million in fees after investing an equal amount in US oil and gas assets, energy infrastructure or liquefied natural gas projects along the Gulf Coast, the Interior Department said. 

The buyback approach has been used before to extricate the US government from leases, particularly after litigation. After former President George W. Bush’s Interior Department sold shale oil leases in Utah in 2008, the auction was subsequently challenged in court. Months later, the agency under former President Barack Obama ordered the withdrawal of those leases, with leaseholders refunded the bids they’d paid for the territory.

(Updates with more context throughout.)

©2026 Bloomberg L.P.

In March, the first four weeks since the bombing began, consumers in France, Germany and the UK drove off in 206,200 EVs, a 44% increase over the year-earlier period. In South Korea, electric car transactions more than doubled. In Italy, where the path to electrification has been slow, 16,000 battery-powered vehicles left dealerships last month, a 67% increase.

“The March data suggest that scaling up to electrification can occur at a meaningful pace when market and policy conditions align,” said Peter Mock, Europe director at the International Council on Clean Transportation. “The coincidence with the recent oil price shock is notable.”

The surge wasn’t entirely unexpected; online searches for EV listings intensified in the weeks after the war. In March, all told, consumers snapped up 1.1 million EVs, 2% more than they did in the year-earlier period, according to new global data from BloombergNEF. Some 17% of new cars and trucks sold around the world last month were entirely battery-powered, roughly the same share as in March 2025. 

The EV gains came despite flagging sales in the world’s largest auto markets. While electric car transactions last month cooled in Canada, China and the US, a surge in demand in Europe, Australia and parts of Asia more than compensated for the declines. Tesla Inc. called out the uptick in orders as a tailwind to its recent quarterly results. “2026 has had an interesting start, not just for us, but I think the world in general,” Chief Financial Officer Vaibhav Taneja said on a conference call. “On the autos business, we have seen a resurgence in demand.”

Where EV sales are bubbling up, analysts point to a cocktail of two ingredients: elevated gas prices and affordable new models from Chinese automakers. Indeed, Chinese exports of EVs and hybrids reached a new record in March, increasing 140% from the previous year, according to the China Passenger Car Association.

The renewed global appetite for EVs is good news for Chinese manufacturers. Major export markets that saw a sizeable jump in EV shipments included Australia, up 67% from February; Belgium, up 63%; and Germany at 34%, according to Chinese customs data. The increases align with survey results showing interest in EVs surging as fuel prices have risen.

Graham Kettlewell, a 62-year-old near Sydney, has had the EV itch for years. As an atmospheric chemist, Kettlewell has spent his professional life measuring the steady ramp-up of CO2 in the atmosphere. Still, he didn’t ditch his 2014 Nissan Altima until a few months ago when he got his hands on a BYD Co. Dolphin, a zippy little Chinese hatchback that sells for about $30,000 in Australia. 

Drilling for oil, refining it, shipping it all over the world and burning it to create greenhouse gases “doesn’t seem like the best approach,” Kettlewell said. “This was my take on things prior to the fun we are currently having in the Strait of Hormuz.” 

With solar panels on the roof of his home that fuel the car, Kettlewell has seen his transportation costs drop from $100 a week to $4. Gas prices in Australia have spiked more than in many countries and thousands of Kettlewell’s neighbors are running similar equations. Australians bought 14,100 EVs last month, 68% more than in the year-earlier period. 

Similar forces sped EV sales across Europe where nearly 400 electric models are now on offer largely due to Chinese imports, up from 368 a year ago. 

The sales were spurred in part by policy changes, some a direct response to the Iranian oil crisis, according to BloombergNEF analyst Sada Wachche. Germany, for example, has reintroduced purchase subsidies of up to €6,000. Meanwhile, France has strengthened an electrification mandate for fleets of vehicles. 

“Every market has a lot of levers, but especially Europe,” Wachche said. 

Meanwhile, EV sales continued to swoon in China and the US, the world’s two largest auto markets. Chinese consumers have largely been insulated from gas price spikes and the government has curtailed some purchase incentives. 

US EV sales declined 27% from the year-earlier period. However, analysts note American EV sales were particularly strong in March 2025, as drivers rushed to grab expiring federal incentives. Meanwhile, a tide of used EVs is pulling buyers away from the new market. US car consumers have become bargain hunters and are snapping up used electric vehicles faster than any other kind of car or truck. 

©2026 Bloomberg L.P.

The nation’s power sector is expected to add about 60 gigawatts of solar, battery storage and wind capacity in 2026, the American Clean Power Association said in its annual market assessment published Tuesday. That is up 20% from over 50 gigawatts deployed last year. The trade group’s forecast is near the top end of the range given by consulting firms including BloombergNEF, S&P Global and Wood Mackenzie, the report said.

Many of the clean energy projects now nearing completion had started years before President Donald Trump returned to office in January 2025. Since then, the Trump administration has moved to halt or slow the building of solar and wind farms through measures including the ending of lucrative federal tax incentives and permitting delays. Administration officials have broadly criticized both wind and solar power, casting the emission-free renewables as dependent on government subsidies, as well as the additional infrastructure needed to compensate for their intermittent electricity generation.

The trade group said its forecast is on the optimistic side and assumes that the federal government’s ongoing permitting and authorization challenges will be overcome. The country is seeing a surge of electricity demand from AI data centers and clean energy remains one of the fastest and cheapest sources of new capacity, according to ACP.

“With electricity demand surging at a pace we have not seen in a generation, the country will need every megawatt it can build,” wrote ACP CEO Jason Grumet in a letter introducing the report.

©2026 Bloomberg L.P.

CATL did not disclose the value of the agreement but said in a statement it would amount to 60 gigawatt-hours, and mark the battery giant’s first strategic partnership in sodium-based technology. 

These batteries use sodium as their key raw material instead of lithium, and are expected to deliver safer and low-cost rechargeable cells. The International Energy Agency expects 2026 “could prove to be a pivotal year” for sodium batteries, which could begin to displace at least some demand for more familiar lithium-ion technology. 

CATL, which has added more than 300 staff and invested almost 10 billion yuan ($1.5 billion) in sodium-ion research and development in the past decade, has described the segment as “alternative risk management,” offering a hedge against wild swings in lithium prices. The company’s Chief Technology Officer Gao Huan told reporters at an event in Beijing last week that it will begin mass-production of sodium batteries in the fourth quarter of this year.

©2026 Bloomberg L.P.

With energy bills rising due to the Iran war, the Southeast Asian nation is fast-tracking the rollout of a diesel blend comprised 50% of biofuels from its vast palm plantations. The aggressive timetable will push the industry’s limits and serve as a test case for other crop-rich economies – from Malaysia to Brazil – that are seeking to cut reliance on fossil fuels.

“If Indonesia succeeds, it shows that very high biofuel blends are possible when demand is engineered” rather than left to market forces, said Khor Yu Leng, an economist at Segi Enam Advisors in Singapore, who has tracked the palm oil industry for nearly two decades. “This could push other countries to strengthen mandates for energy security.”

By some distance, Indonesia is the global leader in terms of the proportion of biofuels in its diesel mix. The country produces a blend that is 40% derived from palm oil, and its ambition to introduce the next grade – B50 – aligns with President Prabowo Subianto’s push toward self-sufficiency in food and fuel.

The world’s biggest palm oil producer has the resources to succeed. The spike in crude prices arising from the war has also given the country a window to advance its goal — on the rare occasions, such as now, when conventional diesel costs more than biofuel, the government avoids paying a subsidy that’s usually needed to incentivize producers and keep biodiesel competitive at the pump.

But the race to roll out B50 by July – at least a year ahead of a previous schedule – faces challenges. Another key input for biodiesel, methanol, is in short supply due to the war. Storage tanks, meanwhile, are filled with unsold byproducts, according to people familiar with the matter, who asked not to be named discussing private matters.

Added to that, a reduction in exports as the country retains more palm oil for domestic use would likely push global prices for the tropical commodity higher. That risks adding to food inflation wrought by the war, with palm oil used in scores of products across grocery-store shelves.

“On paper, Indonesia has sufficient capacity to produce the volumes of biodiesel required for B50,” said Julian McGill, an agricultural economist and managing director of advisory firm Glenauk Economics in Kuala Lumpur. “In practice, this requires running at extremely high capacity utilization.”

Before any of this is possible, the new fuel must be road-tested. These trials were what took the Japanese-branded trucks and Mercedes-Benz Group AG bus to the highlands of Java last week. Four SUVs are still on the road, headed for the mountainous east of Indonesia’s most populous island to check the blend’s performance at high altitudes.

“Indonesia is a tropical country with varying humidity levels, which affects fuel conditions,” Cahyo Setyo Wibowo, head of the B50 trials, said at the journey’s end-point. Due to its high saturated-fat content, palm-based biodiesel is prone to cloud and solidify in cooler conditions, making fuel systems more vulnerable to clogging at higher elevations.

So far, though, preliminary results have shown B50 to have performed reliably, said Eniya Listiani Dewi, director general of new and renewable energy at the Ministry of Energy and Mineral Resources. Engine components, lubricants and fuel systems have stayed in line with manufacturers’ recommendations throughout the trials, which are due to end next month.

“What Indonesia has achieved is remarkable,” McGill said. “There were doubts that even B30 was possible, and today they are on the cusp of pushing through B50 as other Northern Hemisphere countries continue to treat single digits as the blend wall.”

Malaysia, a distant second in terms of palm oil production, plans to transition in stages from B10 to B20. Brazil – with a B15 diesel mandate – is awaiting results of tests on a higher blend, and is also seeking to lift its mandatory blend of ethanol into gasoline to 32%. The US, meanwhile, just finalized long-awaited blending standards that will boost levels mixed into both conventional diesel and gasoline.

Few countries, if any, can replicate Indonesia’s blending levels in biodiesel, said Khor, the economist. The system is “state-structured, industry-funded and scale-driven,” she said, while other models are market-driven and fiscally linked, “making them more flexible but less certain in scale.”

According to McGill, a full rollout of B50 in the second half of the year would need an additional 1.7 million tons of biodiesel. That would amount to a roughly 12% increase on the amount required for the existing annual quota for the B40 mandate.

And with the July deadline in mind, Indonesia’s government has already sent letters to biofuel producers asking for their commitment to supply additional volumes for the program, said Dewi from the ministry.

Some of these producers, however, are hesitant to commit to the new targets, one of the people familiar with the industry said. While palm oil is abundant, the producers’ main concern is a shortage of methanol, the ingredient needed to break apart the oil molecules and convert them into biodiesel.

Much of Indonesia’s methanol traditionally comes from the Middle East via a sea route that’s been choked by the war. Prices have more than doubled since the conflict began at the end of February, according to data from analytics firm Polymer Update.

The implications of B50 for palm oil markets are also significant. Even a gradual increase in blending rates would increase domestic consumption and reduce exports, with production growth unlikely to keep pace. That’s likely to boost palm prices over the medium term, said Artem Hammerschmidt, head of vegoils and biofuel research at Netherlands-based Ceras Analytics.

These input considerations, as well as the strains on capacity, cast some doubt over whether the switch to B50 will be possible within just a few months. After all, as recently as January — before the war began — the government said policymakers would need more time to build infrastructure and calculate the costs of transition.

“A more realistic trajectory would imply an effective national blend rate of around B42-B43 in 2026, rising to B45 in 2027 and only reaching full B50 implementation from January 2028,” Hammerschmidt said.

Regardless, Indonesia is committed to B50. For the government, it’s a matter of energy sovereignty. Asked recently whether Indonesia might slow the program should fossil fuel prices retreat, making biodiesel more expensive than gasoil again, Energy and Mineral Resources Minister Bahlil Lahadalia said: “The B50 must continue.”

“This is about survival,” he added. “We should not – just because prices are falling – go back to relying on imports.”

©2026 Bloomberg L.P.

“This decision follows a comprehensive review of the UAE’s production policy and its current and future capacity and is based on our national interest and our commitment to contributing effectively to meeting the market’s pressing needs,” UAE state news agency WAM reported.

Longstanding member 

The UAE was a longstanding member of OPEC, which was set up in 1960 to coordinate petroleum policies, stabilise oil markets, and secure efficient supply to consumers. Headquartered in Vienna, it works with the broader OPEC+ grouping that also includes Russia, to manage production levels and influence global prices.

As of May 1, following the UAE’s exit, OPEC members will comprise of Algeria, Congo, Equatorial Guinea, Gabon, Libya, Nigeria, Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Non-OPEC oil producers who are part of the broader OPEC+ group include Russia, Kazakhstan, Oman, Malaysia, Mexico and Sudan.

The UAE’s decision “reflects a policy-driven evolution in the UAE’s approach, enhancing flexibility to respond to market dynamics while continuing to contribute to stability in a measured and responsible manner,” WAM said.

"The UAE’s decision to exit from OPEC reflects a policy-driven evolution aligned with long-term market fundamentals. We thank OPEC and its member countries for decades of constructive cooperation. We remain committed to energy security, providing reliable, responsible, and lower-carbon supply while supporting stable global markets.”
- H.E. Suhail Mohamed Al Mazrouei,
UAE Minister of Energy and Infrastructure

Policy-driven evolution

Commenting on the decision, H.E. Suhail Mohamed Al Mazrouei, UAE Minister of Energy and Infrastructure, said on X: “The UAE’s decision to exit from OPEC reflects a policy-driven evolution aligned with long-term market fundamentals. We thank OPEC and its member countries for decades of constructive cooperation. We remain committed to energy security, providing reliable, responsible, and lower-carbon supply while supporting stable global markets.”

While near-term volatility, including disruptions in the Arabian Gulf and the Strait of Hormuz, continues to affect supply dynamics, underlying trends point to sustained growth in global energy demand over the medium to long term, the WAM statement said.

“A stable global energy system depends on flexible, reliable, and affordable supply. The UAE has invested to meet evolving demand efficiently and responsibly, prioritising stability, affordability, and sustainability,” WAM reported.

"The UAE has taken a sovereign decision in line with its long-term energy strategy, its true production capability and its national interest, as well as global energy market stability. At ADNOC, our focus is unchanged: meeting the growing energy needs of our customers and partners around the world with reliability, responsibility, and the ambition to deliver more across oil, gas, chemicals, and low carbon and renewable energy. Our commitment to our partners remains unwavering."
- H.E. Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and Managing Director and Group CEO of ADNOC

Commenting on the development, H.E. Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology and Managing Director and Group CEO of ADNOC, said the UAE “has taken a sovereign decision in line with its long-term energy strategy, its true production capability and its national interest, as well as global energy market stability”.

“At ADNOC, our focus is unchanged: meeting the growing energy needs of our customers and partners around the world with reliability, responsibility, and the ambition to deliver more…across oil, gas, chemicals, and low carbon and renewable energy. Our commitment to our partners remains unwavering. For us, trust, partnership and credibility are not talking points … they are a track record,” H.E. Dr Al Jaber wrote on X.

Bringing additional production to market

The UAE – the world’s seventh largest oil producer – also reassured the international community that following its exit from OPEC, it would “continue to act responsibly, bringing additional production to market in a gradual and measured manner, aligned with demand and market conditions”.

With a large and competitive resource base, the UAE will continue working with partners to develop resources, supporting economic growth and diversification, the statement said.

“This decision does not alter the UAE’s commitment to global market stability or its approach based on cooperation with producers and consumers. Rather, it enhances the UAE’s ability to respond to evolving market needs,” WAM reported.

Ahead of ADIPEC last year, H.E. Al Mazrouei had highlighted how the UAE is turning its energy vision into reality by combining investment, AI-driven innovation, and resilient infrastructure to deliver secure, sustainable, and inclusive growth at global scale.

Decades of cooperation

The UAE also highlighted its decades of constructive cooperation with OPEC. “The UAE joined OPEC in 1967 through the Emirate of Abu Dhabi and continued its membership following the formation of the United Arab Emirates in 1971. Throughout this period, the UAE has played an active role in supporting global oil market stability and strengthening dialogue among producing nations,” it said.

“We reaffirm our appreciation for the efforts of both OPEC and the OPEC+ alliance and wish them success. During our time in the organisation, we made significant contributions and even greater sacrifices for the benefit of all. However, the time has come to focus our efforts on what our national interest dictates and our commitment to our investors, customers, partners and global energy markets. This is what we will focus on going forward,” it said.

In March, OPEC+ approved a modest production increase of 206,000 bpd, although the UAE quota remained at 3.41 mbpd.

Global oil outlook

Earlier this month, in its first public assessment of the impact of the Middle East conflict, OPEC lowered its forecast  for world oil demand in the second quarter by 500,000 barrels per day — an average 105.07 mbpd, down from the 105.57 mbpd forecast in the previous month’s report. But it made no change to its full-year outlook.

Global oil demand is forecast to grow by 1.4 mbpd year on year, driven almost entirely by demand from non-OECD regions, mainly China, India and other Asian countries, OPEC said.

In an interview at the OPEC Secretariat in Vienna last year, H.E. Haitham Al Ghais, OPEC Secretary General, had highlighted the critical need for $18.2 trillion investments in oil and gas by 2050, with the sector remaining an essential pillar of a stable and secure energy future.