Earnings before interest and taxes fell 15% to €3.52 billion ($4.14 billion) from a year earlier, the French utility said Thursday.

Engie is seeking to offset its exposure to French gas assets and capitalize on an expected surge in electricity demand by investing in wind, solar and battery storage worldwide. The company just completed its acquisition of a UK power-distribution network — almost two months ahead of schedule — underscoring its efforts to retreat more broadly from fossil fuels.

The utility has also been cutting costs to help counter a loss of earnings from Belgium, where three of its five reactors in the country were closed last year. Engie is now in talks to sell its entire Belgian nuclear business to the state to eliminate risks related to energy policy changes and focus on assets with more predictable income and expenses.

“The idea of both parties is that it should have a neutral finance impact,” Chief Financial Officer Pierre-Francois Riolacci said on a conference call Thursday. Given that the two reactors still in operation are due to be frequently halted for lifetime extension works in coming years, a sale to the Belgian government “wouldn’t change anything in our numbers going forward,” he said.

The shares of the company traded 1.5% lower at 12:27 p.m. in Paris, paring this year’s gain to 21%. 

Excluding its nuclear activities, quarterly Ebit declined 8.4%, the firm said in a statement. Engie stuck to its full-year profit forecast, citing the expansion of its renewables division and lower costs across the group. 

It also announced an agreement to sell stakes in gas-fired power plants in Qatar, following similar deals in the region last year.

The company may sell as much as €1.5 billion of assets this year to reduce its debt following the acquisition of UK Power Networks for about €19 billion including debt, Riolacci said. Divestment should pick up next year, with Engie selling stakes in businesses that it has little control over, and minority interests in some of the group’s “highly” capital intensive assets. Businesses up for sale should be little impacted by the Persian Gulf war, he said.

Despite the continuing war in the Middle East, the company said its gas customers haven’t seen any disruption to supply because it gets the fuel from a wide range of sources.

Engie is also sticking with plans to develop renewable-energy projects in the region, where tenders and construction are continuing, Riolacci said. 

In the US, where the Trump administration has moved to halt or slow renewable energy developments, the CFO said it’s “difficult” to get permits for onshore wind, while solar and battery-storage projects are growing amid “very strong” demand.

(Updates with CFO comments on Belgian nuclear talks, asset sales.)

©2026 Bloomberg L.P.

Brent was above $102 a barrel, while West Texas Intermediate was near $96. Washington has presented a one-page memorandum of understanding that will potentially lead to the gradual reopening of the Strait of Hormuz, a person familiar with the matter said. Iran is expected to respond in coming days.

Global energy markets have been upended by the war, with the vital shipping route largely closed since the end of February. At present, the chokepoint faces a double blockade, with Tehran obstructing traffic, while the US Navy prevents vessels calling at or leaving Iranian ports to squeeze the nation’s oil industry. Shipowners remain cautious, with the strait still virtually empty.

“Crude’s slump is once again wildly and prematurely optimistic: the only thing that matters for the market is how and when does the Strait of Hormuz reopen,” said Vandana Hari, founder of analysis firm Vanda Insights. “At this point, that prospect is less than a faint shadow on the horizon,” she added. 

The US will end its military campaign and lift its blockade “assuming Iran agrees to give what has been agreed to, which is, perhaps, a big assumption,” President Donald Trump posted on social media on Wednesday, without giving details. “If they don’t agree, the bombing starts.”

The American president is under pressure to bring the war to a close as US retail energy prices surge, fanning voters’ concerns about affordability. In addition, Trump and Chinese President Xi Jinping are due to hold a summit in Beijing on May 14-15. This week, China’s top diplomat called for the swift reopening of Hormuz in a meeting with his Iranian counterpart.

“President Trump seems very keen to make sure that Iran does not torpedo his summit with Xi,” said Will Todman, senior fellow in the Middle East Program at the Center for Strategic and International Studies. “The US and Iran were never going to agree to a comprehensive deal in a rush, but agreeing to a framework buys them time and some calm.”

The latest US proposal came after Trump suspended a short-lived mission to offer safe passage for ships through Hormuz. Detailed talks over Iran’s nuclear program — central to Washington’s reasons for the war — would come later, the person familiar said, adding nothing has yet been agreed.

“A corner of the market will undoubtedly view a one-page memorandum to resume negotiations over the next thirty days as significant progress,” RBC Capital Markets LLC analysts including Helima Croft said in a note. “However, an MoU is unlikely to translate into an immediate resumption of shipping traffic and major production restarts.”

Meanwhile, US government data showed exports of oil products rose to a record last week as the country became a key supplier of fuel to the world amid the supply crunch caused by the conflict. Crude inventories fell.

©2026 Bloomberg L.P.

Modern commentators think of OPEC entirely as a market management mechanism, often referring to it as a cartel. But for the first 22 years of its existence after 1960, it did not apply production quotas. It was at first a body for collective action against the major western companies and their governments, who dominated the global oil industry. It fought for fair prices and a redistribution of profits towards the countries from whose land the oil was extracted.

From the 1971 Tehran and Tripoli agreements to raise prices, then the 1973 embargo by a group of Arab producers, OPEC realised its market power. But that crashed demand and encouraged competing production from the North Sea, Alaska and Mexico.

Hence why in 1982, it had to introduce quotas to share a fast-diminishing market between its members. Apart from brief periods of breakdown, it has kept that role ever since, so assiduously that it now seems OPEC’s only function.

Modern commentators think of OPEC entirely as a market management mechanism, often referring to it as a cartel. But for the first 22 years of its existence after 1960, it did not apply production quotas. It was at first a body for collective action against the major western companies and their governments, who dominated the global oil industry. It fought for fair prices and a redistribution of profits towards the countries from whose land the oil was extracted.

The formation of OPEC+ in 2016 drastically expanded the production capacity under the alliance’s influence. The Vienna group had concluded that it could not handle both US shale and Russia simultaneously. After several attempts to cooperate with Moscow, the price war from 2014, and new thinking from Russian President Vladimir Putin and his Energy Minister Alexander Novak gave an opening.

But of the other states that came into OPEC+, Sudan, Bahrain, Azerbaijan, Malaysia, Brunei and Oman were declining or static producers. Kazakhstan wanted to grow its output substantially and has essentially ignored quotas. Only Oman and Kazakhstan were big enough for their production cuts to make much difference. Russia was the real prize. But its adherence to cuts was shaky too, except during the demand abyss caused by the Covid pandemic in 2020.

As it turned out, Russian production was not likely to grow dramatically after 2016. Its invasion of Ukraine in 2022, followed by sanctions, tax rises, limitations of technology and finance, and persistent Ukrainian drone attacks, mean it has often been unable to produce up to its allowance. But its size, military power, nuclear weapons and UN Security Council seat still guaranteed it would be one of the twin poles of OPEC+, with Saudi Arabia.

Higher prices and production cuts

Meanwhile, the quest for higher prices led to lengthy periods of deep production cuts. These restrained demand growth while allowing competing supply, particularly from the US and elsewhere in the Americas. In 2021, the UAE complained publicly, while officials hinted privately at an exit. The country’s production allowance was gradually raised, smoothing over the differences for a while.

Only last year did OPEC change tack on overall policy, allowing a series of production increases that did steadily bring prices down. But by then, the UAE’s production capacity was already far ahead of its limited allowance: at least 4.85 million barrels per day of capacity, versus a quota in January of 3.4 million bpd. That was proportionately by far the largest spare capacity of any member.

OPEC argued as recently as last March that “the oil sector requires cumulative investments of $18.2 trillion by 2050. This is to meet rising demand, and to counter decline rates, with the latter on average meaning we need to add around 5 mb/d every year… OPEC has repeatedly called for more investments in the oil industry.”

With the departure of the UAE, OPEC’s capacity is only 27% of global demand. That is too low for it to operate an effective market balancing mechanism. The wider OPEC+ group holds 41%.

Only last year did OPEC change tack on overall policy, allowing a series of production increases that did steadily bring prices down. But by then, the UAE’s production capacity was already far ahead of its limited allowance: at least 4.85 million barrels per day of capacity, versus a quota in January of 3.4 million bpd. That was proportionately by far the largest spare capacity of any member.

The OPEC after the UAE’s exit is a mix of one state with real spare capacity – Saudi Arabia – four with major growth ambitions (Iraq, Venezuela, Libya and perhaps a post-war Iran), and the rest with neither spare capacity nor growth, who benefit only from price rises. The burden of maintaining spare capacity to cope with unexpected price spikes will now rest almost entirely on Saudi Arabia.

The UAE has emphasised that it will continue to act as a responsible market actor following its exit. It will therefore not necessarily try to flood the market once the Gulf re-opens to free passage. It could, of course, continue to cooperate with OPEC on an informal basis.

But the UAE’s more diversified economy is better able to cope with lower oil prices, if they materialise, than Riyadh, Baghdad, Tripoli, Tehran or Caracas. The OPEC of 1973 or even 1982, a group of states whose economies depended almost entirely on their oil industries, has gone. Once immediate post-war recovery is over, the petroleum exporters’ club needs to set its sights more realistically.

• Robin M. Mills is CEO of Qamar Energy, and author of The Myth of the Oil Crisis

Shell’s first-quarter adjusted earnings were also above the $5.58b profit it posted a ​year earlier. The London-listed company also cut the pace ​of its quarterly share buyback programme to $3 billion from $3.5 billion for the next three months, and a 5% increase in the dividend, in line with its existing CFFO distribution policy.

“Shell delivered strong results enabled by our relentless focus on operational performance in a quarter marked by unprecedented disruption in global energy markets,” Shell CEO Wael Sawan said in a statement.

Shell’s oil and gas output ​fell 4% compared with the previous ​quarter due to the Middle East conflict, ‌including ⁠damage to its Qatari Pearl gas plant, where repairs might take about a year, according to Reuters.

The company posted a strong operational performance across the portfolio to supports higher contributions from trading and optimisation. Shell pegged the cash capex outlook for the rest of the year at $24 - $26 billion, including around $4 billion for the acquisition of ARC. Its 2027-28 outlook was unchanged at $20 - $22 billion.

Last week, Shell announced an agreement to buy Canadian energy company ARC Resources in a deal valued at $16.4 billion. “Last week we announced the acquisition of ARC Resources, accelerating our strategy by adding complementary, high-quality, low-cost liquids and gas assets that we believe will deliver value for decades to come,” Sawan said. “The safety of our people remains our priority as we work closely with governments and customers to address their energy needs,” he added.

The company said its debt to ​equity ratio ⁠rose to 23.2% from 20.7% at the end of 2025. Shell had ​flagged higher debt due to managing ​price ⁠and supply disruptions and volatility due to the war, having previously said ⁠it ​was very comfortable ​with the ratio at 20%, Reuters reported.

As currently structured, PJM Interconnection LLC, which serves 67 million people across 13 states, can’t ensure ample electricity supplies while simultaneously shielding residential consumers from soaring bills, Mills wrote in a letter to stakeholders. 

“The current situation is not tenable,” Mills wrote in the letter published Wednesday. The “stress now visible in prices, reserve margins and investment pipelines reflects something more fundamental than a design that needs recalibration.”

The crises stressing PJM include looming power shortages expected to hit the grid as soon as next year and the threatened defection of one of the largest US utilities — American Electric Power Co.

Skyrocketing household electricity bills and the influx of power-hungry data centers have become electoral issues in some locales. Power costs have jumped across the PJM region, with rates climbing 51% in Maryland in the past five years and 41% in Illinois during that period, according to a US Chamber of Commerce report released on Tuesday. 

“The region has years, not decades, to make these choices deliberately,” Mills wrote.

A policy paper put forward alongside Mills’ letter outlined three potential paths to mitigate a “credibility gap” between the need for high prices to entice power-plant construction and protecting consumers from higher bills.

“Generators, utilities, investors and consumers must all believe, at a basic level, that the rules are fair, stable and the product of a process they recognize as credible,” Mills wrote.

PJM is taking too long to find solutions and that the “devil is in the details” with each of the proposals put forward, according to Ryan Levine, an analyst at Citigroup Inc.

“We worry that the continued back and forth is leading PJM to miss the opportunity,” Levine wrote in a note. Data center projects “will just move to other regions around the world if it really takes years to figure things out.”

(Updates with comment from Citigroup analyst from penultimate paragraph.)

©2026 Bloomberg L.P.

State-owned Pakistan LNG Ltd. is seeking shipments for May 12 to 14 and May 24 to 26 delivery in a tender that closes on Thursday, according to a notice on its website. Pakistan was forced to purchase a spot cargo for the first time in more than two years last month as the war in Iran chokes supply from the Persian Gulf, which normally produces about a fifth of the world’s LNG.

Pakistan procured nearly all of its LNG from Qatar last year, and those supplies have been cut since the US and Israel began strikes on Iran in late-February. Meanwhile, higher-than-normal temperatures are sweeping across the nation, boosting electricity needs from air conditioning and exacerbating rolling blackouts because of reduced output from gas-fired power plants.

©2026 Bloomberg L.P.

Brent dropped toward $108 a barrel after sliding 4% on Tuesday, while West Texas Intermediate was near $100. US efforts to move ships through the Strait of Hormuz will be paused, but a naval blockade will remain in place, Trump said in a Truth Social post. 

The global benchmark has climbed by about 50% since the conflict started at the end of February, cutting off hundreds of millions of barrels of Gulf oil from global markets. Flows through the chokepoint are now constrained by a double blockade, with Tehran obstructing shipping while the US is stopping vessels from accessing Iranian ports. 

Earlier, Secretary of State Marco Rubio told reporters at the White House that “Operation Epic Fury is concluded,” 66 days after the US and Israel began bombing Iran. “We achieved the objectives of that operation,” he said.

On Tuesday, Washington played down the prospect of a return to active war, with Defense Secretary Pete Hegseth confirming the truce that began just under a month ago is still in place. Meanwhile, General Dan Caine, the chairman of the Joint Chiefs of Staff, said attacks by Tehran on vessels in the Gulf and the United Arab Emirates didn’t constitute a breach of a ceasefire. 

The shutdown around Hormuz has left more than 1,550 commercial vessels, carrying some 22,000 sailors, trapped in the Persian Gulf, Caine said.

“Even if we see some deescalation headlines, the supply recovery is inherently delayed,” said Dilin Wu, a research strategist covering cross-asset markets at Pepperstone Group. “This is not a switch you can just flip: You still see limited oil shipment through the strait and it still needs time for stranded tankers to be rerouted, for the insurance market to reprice risk and for production to ramp back up,” she said.

In the US, industry data showed crude inventories fell 8.1 million barrels last week, which would be the biggest draw since mid-February if confirmed by official data due later Wednesday. 

“We’re holding the pattern from rally to profit-taking each day,” said Carl Larry, an oil and gas analyst at Enverus. “Markets may take it in stride but irrational exuberance usually gets the best of the market. Draws bring all the bulls to the yard.” 

Oil has seen wild price swings since the war started, prompting traders to move to the sidelines to avoid extreme volatility. Aggregate open interest in Brent has dropped to its lowest level since August.

Meanwhile, Saudi Arabia cut the price of its main oil grade for Asia next month from a record-high in May. It remained elevated as the hostilities in the Middle East continue to severely disrupt supplies.      

©2026 Bloomberg L.P.

Since the chokepoint shut on Feb. 28 due to the US-Israel war with Iran, vessels have rerouted around the Cape of Good Hope as an alternative to a corridor that normally carries about a quarter of the world’s seaborne oil along with large volumes of liquefied natural gas and fertilizers. 

While the detour has driven traffic around southern Africa up as much as 90%, it hasn’t boosted visits at regional maritime hubs, according to Rhenus Logistics.

“The increase is driven primarily by Asia–Europe and Asia–Mediterranean container services, alongside crude oil, LNG and dry bulk trades,” said Ebenezer Simba, the company’s ocean product manager for Africa and the Middle East. But it “has not translated proportionally into African port calls,” he said. 

Operational constraints such as weather disruptions and congestion have limited competitiveness at major South African hubs including Durban and Cape Town. 

The primary driver is that there “is limited commercial incentive for carriers to adjust port rotations” there, Simba said. 

East African hubs dependent on Suez routing — such as Djibouti and Port Sudan — are also net losers due to limited capacity relative to other Gulf-surrounded ports such as Jeddah in Saudi Arabia, Sohar in Oman and harbors in South Asia, he added.

There are some regional winners.

Gains are concentrated in a handful of locations positioned to service vessels rather than handle cargo, Simba said. Harbors such as Port Louis in Mauritius as well as Lüderitz and Walvis Bay in Namibia — along with offshore refueling, or bunkering, zones in West Africa — are benefiting from a jump in demand as ships take on fuel for longer voyages.

Time and Costs

Bunker calls at Port Louis surged 42% to 294 vessels in March from the previous month, while fuel volumes climbed nearly three-fifths to over 109,000 tons, the Mauritius Ports Authority said.

The reshaping of global trade lanes is adding time and cost to voyages. Rerouted trips between Asia, Europe and the Gulf can take as much as two weeks longer than standard transit times, said Vinny Licata, head of logistics and import compliance at Fictiv. Some carriers are also terminating trips outside the Persian Gulf to avoid the risks tied to the war.

For Africa, responsible for about 2% of global maritime exports and 5% of imports, the surge in shipping hasn’t translated into higher trade volumes.

“Africa has become a critical transit and servicing geography rather than a destination-port winner,” Simba said. Value capture is concentrated in “fuel supply and maritime services rather than container throughput,” he said.

The pattern echoes disruptions in late 2023 and early 2024, when attacks on Red Sea shipping forced vessels onto longer routes around southern Africa but failed to deliver sustained gains for most of the continent’s ports.

Security risks are rising again just as some container lines had begun testing a return to the Red Sea-Suez route in late 2025 and early 2026. As soon as the “Gulf conflict erupted, they suspended those trials and plans in case the Houthis renewed their attacks,” said Darron Wadey, a senior shipping analyst at Dynamar BV.

Maritime piracy off Somalia’s coast is resurging, with at least three hijackings reported in the past week, according to UK Maritime Trade Operations. The uptick reflects broader instability linked first to Red Sea attacks and now to tensions around Hormuz.

For shipping lines, the Suez route is no longer viable, making the Cape route their default.

“Many are treating it as the new reality,” Licata said, a shift that is already encouraging investment in permanent bunkering infrastructure across parts of Africa.

©2026 Bloomberg L.P.

“Project Freedom (The Movement of Ships through the Strait of Hormuz) will be paused for a short period of time to see whether or not the Agreement can be finalized and signed,” Trump said in a social media post on Tuesday. The effort to break Iran’s chokehold on the waterway had only begun on Monday.

The president cited “Great Progress” toward “a Complete and Final Agreement with Representatives of Iran.” He said the decision had been made at the request of Pakistan — which is helping mediate talks between Washington and Tehran — as well as other countries. He added, however, that a US blockade of ships transiting to and from Iranian ports would “remain in full force and effect.”

It was not clear what progress Trump referred to, and he didn’t provide details on what, if any, negotiations were in the works. His comments marked an abrupt shift from recent days, when he had voiced frustration over the pace of talks and indicated he wasn’t satisfied with Tehran’s proposals.

Brent crude oil dropped around 1% toward $108 a barrel, after sliding 4% on Tuesday.

Project Freedom was meant to sit at the center of the next phase of the US approach to Iran. The US military said it helped two vessels exit Hormuz on Monday, repelling multiple attacks by Iranian drones, missiles and irregular navy fast-attack boats.

According to Defense Secretary Pete Hegseth and Dan Caine, the chairman of the joint chiefs of staff, the Pentagon was deploying guided-missile destroyers with air defense capabilities, more than 100 aircraft, 15,000 personnel in the region, and a mix of drones including underwater platforms.

But Trump shelved the operation just hours after top US officials outlined the role the US military would play.

The administration appears to be seeking ways to ease the standoff that has escalated fuel prices, exacerbating economic strains that Republicans fear could lead to their party losing control of both chambers of Congress in the November midterm elections. Before Trump’s announcement, Secretary of State Marco Rubio told reporters at the White House that offensive operations against Iran were over.

While the US now seems intent on trying to deescalate the conflict, which has killed thousands of people in Iran and Lebanon and roiled global energy markets, the path to a deal that reopens the strait, which carries a fifth of the world’s oil exports, remains distant.

As Rubio spoke on Tuesday, a British monitoring organization reported that a cargo ship in the strait had been struck by an unknown projectile. The US said the shutdown around Hormuz has left more than 1,550 commercial vessels, carrying some 22,000 sailors, trapped in the Persian Gulf.

Further clouding the picture, prior to Trump’s announcement, Iran’s president dismissed American demands to resume talks as “impossible.” 

“The problem is that while the US pursues a policy of maximum pressure against our country, it also expects the Islamic Republic of Iran to come to the negotiating table and ultimately submit to its unilateral demands — an equation that is impossible,” President Masoud Pezeshkian said in a call with Iraq’s prime minister-designate Ali al-Zaidi, according to the semi-official Fars news agency.

Trump and top administration officials have described challenges with talks, in part because of divisions within Iran itself. 

Sometimes after an offer is made, Rubio said, “it takes five or six days to get a response,” since it has to wind its way through a system and be put in front of the supreme leader. 

“Their system has always been multilayered in this way. It’s obviously become more complex because of the damage they suffered during the war,” he said.

More Related to the War

• Chinese Foreign Minister Wang Yi held talks with Iranian Foreign Minister Abbas Araghchi in Beijing on Wednesday, Xinhua News Agency reported.
• At the UN, the US and its allies backed a draft United Nations Security Council resolution that would open the door to sanctions or even military action if Iran doesn’t ease its chokehold over the strait. The proposal would require support from China and Russia to pass.

(Updates with Iran-China foreign ministers meeting.)

©2026 Bloomberg L.P.

The package will fund a permanent government-owned onshore fuel reserve of around 1 billion liters and lift the minimum amount of fuel companies are required to hold by around 10 days, Prime Minister Anthony Albanese said in a speech in Sydney on Wednesday. That will support an expansion of overall storage to 50 days of supply for diesel and jet fuel, he said.

Despite being a major producer and exporter of energy, Australia sources the vast majority of its refined fuels from overseas and its stockpiles are among the lowest in the developed world. That left it exposed when the Iran war disrupted global oil supplies, contributing to widespread fuel shortages and rising prices.

“This is aimed at making sure that Australians can have more confidence in protecting our energy sovereignty, not just during this crisis, but going forward as well,” Albanese said.

The PM and Energy Minister Chris Bowen spoke about the plan on Wednesday after a national security meeting in Sydney. Bowen said Australia has responded to the crisis, and has more fuel today than when the conflict in Iran began. 

“This is a big change in our approach as a country,” he said. “We have been looking at how to be better prepared for future shocks.”

The package includes A$7.5 billion for the establishment of a fuel and fertilizer facility that will increase supply and storage by providing financial support such as loans, equity, guarantees, insurance and price support, according to Albanese.

It also designates A$3.2 billion to establishing the government stockpile and A$10 million to support feasibility studies into new or expanded fuel refining capabilities, to be co-funded with state and territory jurisdictions.

There’s at least one “serious proposal” for an additional refinery that would receive the support of the state and federal government, Albanese said. The nation only has two working refineries, one of which suffered an explosion last month.

“Today, after the world’s worst oil shock, Australia’s fuel and energy requirements will go some way to being future-proofed,” said Peter Khoury, spokesperson for Australia’s National Roads and Motorists’ Association.

(Updates with additional details from second paragraph, quotes from Albanese and NRMA.)

©2026 Bloomberg L.P.

The company expects operating earnings to rise to at least A$1 billion ($721 million) in the 2027-28 financial year from nearly A$400 million in the current year, it said on a conference call Wednesday in Wellington.  

Shares in New Zealand infrastructure investor Infratil, which owns 49.7% of CDC, surged 12% in Wellington, the most in more than five years. 

CDC Chief Executive Greg Boorer said the contract win is a “massive tick of approval for Australia as a global hub for intelligence generation.” 

“It reaffirms Australia as a very trusted geography in a world that is getting increasingly geopolitically imbalanced,” he said.

The contract, announced late Tuesday, is for 555 megawatts of new capacity and doubles CDC’s contracted capacity to 1 gigawatt. The deal is with an unidentified US customer and has a minimum term of 10 years. No financial details were provided with CDC saying it would be debt funded and requires no new equity from Infratil or other holders, which include Australia’s Future Fund and the Commonwealth Superannuation Corp.

The capacity will be delivered over two years through 2029 on sites already under development. When fully deployed, the 1 gigawatt of contracted capacity would deliver annualized contracted operating earnings of about A$2 billion, the company said. 

CDC expects its capital spending in 2027-28 will be A$3.8 billion to A$4.2 billion, it said.

©2026 Bloomberg L.P.

The warning from Goldman Sachs came as the CEO of Chevron said the supply impact from the continued closure of the Strait of Hormuz would lead to economies slowing to adapt.

Economic growth stalled

Mike Wirth, Chevron Chairman and CEO, said global supply shortages would begin appearing, with the 20% of world's crude supply usually passing through the Gulf waterway still effectively blocked due to the US/Israel conflict with Iran.

“We will start to see physical shortages,” he told a conference in California on Monday. “Demand needs to move to meet supply … economies are going to have to slow.”

Goldman Sachs has also warned that the speed ‌of depletion was becoming a concern four weeks after a ceasefire was declared. On Monday, that peace came under threat when Iran hit ships in the Strait and oil facilities in Fujairah, UAE, as the US attempted to free up shipping.

Stark numbers

The International Energy Agency (IEA) said global oil supply plummeted by 10.1 mbpd to 97 mbpd in March, while global observed oil inventories fell by 85 mb, with stocks outside the Middle East Gulf drawn down by a significant 205 mb as flows through Hormuz were choked off.

Goldman Sachs estimated total global oil stocks could fall ‌to 98 days of global demand by the end of May. However, the bank added that while those stocks were “unlikely to hit minimum operational levels this summer, the speed of depletion and supply losses in some regions and products is concerning”.

Contrary to the global trend, S&P Global said China added 40 mb of crude to its storage in March.

Contracting economies

Countries in Asia could be the first to experience economic shrinkage. The continent is most heavily dependent on Gulf oil production and refining, Wirth explained, with Europe likely to be affected next as demand adjusts to reduced supply.

He described the overall effect of the Hormuz closure as “potentially as big as in the 1970s” when major supply disruptions shook economies worldwide, leading to fuel rationing and long queues at the pumps. A surge in jet fuel prices amid tighter supplies put US budget carrier Spirit Airlines out of business last weekend.

Stock under pressure

IEA member countries are required to hold emergency oil stocks equivalent to at least 90 days of their net oil imports, a rule designed to ensure a coordinated response in times of crisis. As of 25 March, members held more than 1.2 billion barrels of public reserves, alongside roughly 600 million barrels held by industry under government obligation, according to Statista.

Net oil exporters, the US, Canada, Norway, and Mexico, are not bound by this requirement. However, the US maintains the world’s largest emergency stockpile through its Strategic Petroleum Reserve, which currently holds about 415 mb (as of 27 February).

The IEA said Japan has the most strategic oil stock among net importers, at 208 days, while Australia has the least, at 49 days (as of December 2025).

Wirth said the US would be less impacted by shortages than many territories, but would eventually feel the effects.

The US Energy Information Administration (EIA) Short-Term Energy Outlook in March confirmed that. It revealed a list of estimated strategic crude oil inventories in selected countries (as of December 2025), topped by China at 1,397 mb, followed by the US at 413 mb, and Japan (263). OECD Europe held 179 mb, followed by Saudi Arabia (82), with the UAE (34) and India (21) showing the least. Iran held 71 mb.

Demand fall

The IEA said it expected oil demand to contract this year in April’s Oil Market Report.

A forecast of a 1.5 mb/d decline in 2Q26 would be the sharpest since COVID-19. Cuts in oil use were already emerging in the Middle East and Asia Pacific, mainly for naphtha, LPG and jet fuel.

Oil prices posted their largest-ever monthly gain in March in the wake of the “most severe oil supply shock in history”.

The IEA added: “Demand destruction will spread as scarcity and higher prices persist.”

The collaboration between the automation leader and one of the world’s leading integrated energy and chemicals companies is designed to measurably improve planning and operational efficiency across global refining operations.

Advancing accuracy

The project commenced with the integration of Emerson’s Aspen Hybrid Models into Aramco’s existing refinery planning framework, resulting in the creation of one of the world’s largest multi-site, multi-period optimisation models.

Emerson explained that by combining first-principles models, deep domain expertise, and purpose-built industrial AI, Aspen Hybrid Models capture nonlinear relationships in yield and quality responses, significantly enhancing the accuracy of refinery planning models.

The deployment has already achieved yield and quality prediction accuracy of up to 98.5% in key refinery units.

Refining gains

The hybrid AI models are implemented in Continuous Catalyst Regeneration (CCR) and Platformer Units, allowing precise feedstock blending, reducing discrepancies between planning and execution, and improving margin forecasting across Aramco’s refining network.

Current efforts are focused on expanding the hybrid modelling to hydrocracker units across Aramco assets. This expansion is expected to further enhance model accuracy and demonstrate the scalability and robustness of this AI-driven optimisation strategy across the enterprise.

Ahmad Alkudmani, Director of the Global Optimiser Department at Aramco, said the deployment represented a significant milestone in Aramco’s AI strategy and its long-standing relationship with Emerson.

“We are committed to leveraging innovative technologies for smarter, more efficient refining optimisation,” he commented.

“With improved model accuracy, we are enhancing planning decisions, reducing the manual adjustments required from our engineers, and uncovering new value across our global assets.”

Scalable benefits

Among the key benefits, Aramco seeks to substantially raise yield volume and improve stream quality across varied feedstocks, conditions, and throughputs; and diversify feedstock selection and blending to enable more profitable, sustainable operations.

Aramco is using Aspen Hybrid Models built and deployed in Emerson’s AspenTech Performance Engineering and Manufacturing and Supply Chain product suites.

Claudio Fayad, Chief Technology Officer of Emerson’s Aspen Technology business, added: “This deployment of AI-driven Aspen Hybrid Models to optimise complex, multi-site, multi-period planning workflows demonstrates the tangible value of combining deep domain expertise with advanced AI.”

The 1.4 million square metre development is being delivered and funded in partnership with Arcapita, a global alternative investment firm, following the signing of a long‑term strategic agreement earlier this year.  

Facility design and capabilities

The facility supports large-scale, complex logistics. It will feature a temperature‑controlled Grade A warehouse, chemical storage, offices, staff facilities, and an extensive open yard for industrial storage and handling. The team is designing the site to meet high technical and safety standards and will incorporate advanced automation and smart warehouse technologies to enhance efficiency and scalability. The development will also include fire protection systems, photovoltaic and EV‑charging readiness, and aims to achieve LEED Gold certification.

Evolving supply chains and infrastructure demand

The development reflects broader structural shifts in global supply chains as economies move toward more regionalised, diversified trade models. As production and sourcing networks become more fragmented, the logistics sector is increasingly becoming central to enabling coordination, resilience, and continuity across multiple markets. This is driving sustained demand for high-quality logistics infrastructure, particularly assets that support storage, distribution, and long-term operational reliability. Against this backdrop, institutional-grade logistics and industrial real estate are emerging as a critical component of national infrastructure, particularly in markets such as Saudi Arabia that are investing to strengthen industrial capacity, supply chain and global trade connectivity.

“This facility represents an important step in building ASMO’s long‑term logistics network in Saudi Arabia,” said Salem A. Al Huraish, Chairman of ASMO. “As the first of three planned strategic sites across the Kingdom, it will strengthen in‑Kingdom supply chain capabilities and support reliable, efficient logistics operations for the energy and industrial sectors. The development also aligns with Saudi Arabia’s Vision 2030 ambition to further establish the Kingdom as a regional logistics hub.”

Customer and operational impact

Once operational, the facility will serve Saudi Aramco, its affiliates, and other energy and industrial customers, enhancing ASMO’s ability to deliver more efficient, centralised logistics solutions.

Sulaiman M. Al Rubaian, Aramco’s Senior Vice President of Procurement & Supply Chain Management, said:
“As ASMO’s anchor customer, Aramco recognises the critical role that high-quality logistics infrastructure plays in enhancing service reliability and enabling efficient, large-scale supply chain operations. This facility marks an important step forward in advancing a more integrated and resilient supply chain, reflecting a long-term vision for efficient development and operational excellence, and aligning strategic infrastructure with integrated operational capabilities.”

Investment structure

The project follows a long-term structure that aligns capital with operating capabilities by combining Arcapita’s investment ownership with ASMO’s role as facility operator.

Sh. Isa bin Hussam Al Khalifa, Managing Director and Head of MENA Real Estate at Arcapita, said:
“This investment reflects the growing importance of institutional‑quality logistics and industrial assets in Saudi Arabia, particularly those underpinned by long‑term operating demand. As the Kingdom continues to prioritise industrial development, supply chain resilience, and self-sufficiency, demand for scalable, high-quality logistics infrastructure is increasing. The development brings together a strategic location, strong industry fundamentals, and a clear use case within one of the Kingdom’s most important energy and industrial ecosystems.”

Mishal Al Zughaibi, President & CEO of King Salman Energy Park (SPARK), said:

“We are delighted to celebrate the groundbreaking of this major investment. Since the signing of the agreement, our teams have worked diligently and collaboratively to accelerate the early stages of the project, enabling the achievement of this important milestone. This partnership reinforces SPARK’s position as a leading world-class energy and logistics hub. Through its proximity to the largest privately owned dry port in the region, ASMO will have access to a comprehensive range of logistics services.”

Located at the heart of Saudi Arabia’s energy sector, SPARK offers direct connectivity to key operating and logistics corridors, enabling efficient movement, storage, and handling of materials across the energy and industrial value chain.

“Operation Epic Fury is concluded,” Secretary of State Marco Rubio told reporters at the White House Tuesday, 66 days after the US and Israel began bombing Iran. “We achieved the objectives of that operation.” 

A few hours later, President Donald Trump announced that he would pause a US-led effort to help stranded ships exit the Strait of Hormuz to see if an agreement with Iran to end the war could be finalized.

“Project Freedom (The Movement of Ships through the Strait of Hormuz) will be paused for a short period of time to see whether or not the Agreement can be finalized and signed,” he said in a social media post on Tuesday.

Trump added that he acting at the request of Pakistan and other countries, but that the US blockade of ships transiting to and from Iranian ports would “remain in full force and effect.”

While the US now seems intent on trying to deescalate the conflict, which has killed thousands in Iran and roiled global energy markets, the pathway to a deal that reopens the strait, carries a fifth of the world’s oil exports, remains distant. 

As Rubio spoke, a British monitoring organization reported that a cargo ship in the strait had struck by an unknown projectile. The US said the shutdown around Hormuz has left more than 1,550 commercial vessels, carrying some 22,000 sailors, trapped in the Persian Gulf. 

Iran’s president dismissed American demands to resume talks as “impossible.” 

“The problem is that while the US pursues a policy of maximum pressure against our country, it also expects the Islamic Republic of Iran to come to the negotiating table and ultimately submit to its unilateral demands — an equation that is impossible,” President Masoud Pezeshkian said in a call with Iraq’s prime minister-designate Ali al-Zaidi, according to the semi-official Fars News Agency.

Oil declined on Tuesday, with Brent trading around 3.6% lower at under $111 a barrel. It jumped almost 6% on Monday.

Rubio’s characterization of Operation Epic Fury, repeated by other top officials over the last 24 hours, signals the pressure Trump is under to end an increasingly unpopular conflict. At the briefing, Rubio cast Iran as the aggressor and the US as leading a global effort to bring a rogue nation to heel.

Portraying the war as concluded also allows the administration to skirt questions about the legality of the conflict. The War Powers Act requires him to wind down a conflict in 60 days unless authorized by Congress. Trump passed that deadline about a week ago.

“The goal here is pretty simple: establish a zone of transit that is protected by a bubble — the United States, both naval and air assets — and then allow ships who want to move, to move through there and get to market, to begin to increase confidence in the ability to do so,” Rubio said.

Violence erupted on Monday after Trump announced Project Freedom, which he described as an effort to guide neutral ships stranded in the Persian Gulf through Hormuz without risking full-scale naval escorts. At least two merchant vessels transited the waterway with US assistance in fending off attacks, while two American warships entered the Gulf.

The UAE said Tuesday it was responding to missile and drone threats, having intercepted almost all of roughly 20 projectiles fired from Iran the previous day. 

US officials played down the Iranian attacks, saying they didn’t constitute a breach of the truce announced just under a month ago.

There’s little sign that Iran and the US are nearing a breakthrough. Tehran insists Washington must lift a naval blockade on its ports for that to happen. The US says the blockade is choking Iran’s oil exports and squeezing its economy, forcing it into concessions.

“We see Project Freedom as an attempt to break the logjam in the strait, which has cast a long shadow over the global economy,” said Becca Wasser, an analyst with Bloomberg Economics. “Still, it carries significant escalation risks, as the outbreak of fighting Monday illustrates.”

Here’s more related to the war:

• At the UN, the US and its allies backed a draft United Nations Security Council resolution that would open the door to sanctions or even military action if Iran doesn’t ease its chokehold over the strait. The proposal would require support from China and Russia to pass.
• Iran cast the US move in Hormuz as “Project Deadlock” and a violation of the ceasefire. It also said talks mediated by Pakistan are making progress.
• Iran again warned all ships against trying to get through Hormuz without its permission. On Tuesday it announced a new protocol for vessels seeking to transit the waterway, requiring ships to receive an official email signaling approval, state-run Press TV reported.

(Updates with Trump announcement, starting in third paragraph.)

©2026 Bloomberg L.P.

A ceasefire between the US and Iran has begun to look increasingly fragile, with the two sides exchanging fire even as the US said it had opened a passage through the waterway and CBS reported two American destroyers had crossed into the Gulf. 

Crew members have reported hearing radio broadcasts warning vessels of new boundaries defended by the Islamic Revolutionary Guard Corps. Attacks on the United Arab Emirates port of Fujairah, meanwhile, underlined an expanded Iranian command zone — and kept the strait largely devoid of traffic in the early hours of the day.

Dubai would fall just outside the new Hormuz control area defined by Tehran, which extends to the south to Umm al-Quwain, along the United Arab Emirates coast.

“The US is attempting to level the power balance in the strait and that’s been reciprocated against by Iran. It’s escalation,” said Anoop Singh, global head of shipping research at Oil Brokerage Ltd. “I’m not expecting a quick reopening of bi-directional flows through the strait.”

Hormuz, a vital energy thoroughfare, has become a flashpoint in the nine-week war. Traffic has dwindled since the start of US and Israeli strikes on Iran, but it oscillates each time one side has tried to adjust levels of control.

The number of daily Hormuz passages is currently at near zero — compared to around 135 each day before the war.

The extended lockdown of Hormuz has already upended global freight markets, with decades-old benchmarks turning irrelevant overnight and at least one trading giant suing the index publisher for losses. If the US succeeds in guiding more ships out of the strait, the prospect of an exit for the hundreds of oil and chemical carriers trapped in the gulf could alleviate pressure on the market, said Singh.

Events so far this week, however, have only encouraged caution from the shipping industry. Abu Dhabi National Oil Corp confirmed on Monday that its supertanker, Barakah, was hit by drones while in Hormuz, and South Korea said that one of its ships was targeted for the first time during the war. 

©2026 Bloomberg L.P.

Where do biofuels fit into the energy mix?

Today, most liquid biofuels are used in road transport where they are blended with petrol or diesel at various concentrations. India aims to achieve an E20 (20% ethanol blend) by 2025, according to the International Energy Agency (IEA).

More than 90% of global biofuels are produced from food crops, mostly corn/maize from the US. Sugarcane, grown particularly in Brazil, is the second-largest source, followed by oil crops such as palm oil, soy oil, and rapeseed. Used cooking oil and animal fats represent about 12%.

Our World in Data says collectively biofuels meet 4% of global transport energy demand. Consultants BMI, part of Fitch, expect that to reach 5% by 2035.

What is driving current demand?

Asia, which buys about 80% of the oil shipped through the Strait of Hormuz, which is currently closed, has sought to increase biofuel use since the war began. Reuters says Vietnam switched fully to ethanol-blended gasoline from April, instead of June, due to energy price surges. Indonesia is raising the mandatory blending rate for palm oil-based biodiesel from 40% to 50%.

US refiners have been ordered to blend a record number of biofuels this year, while Brazil’s government is looking to raise the ethanol blend from 30% to 32% by the end of June.

Why are countries adopting biofuels long term?

Biofuels can bolster energy security by reducing reliance on imports and contribute to achieving emissions-reduction targets. The industry can support economic development and job creation, especially in rural areas, and utilise agricultural residues and organic waste, both of which are abundant in India. The bioenergy model promotes circular economy practices and social inclusion.

State-owned firm Empresa de Pesquisa Energética says the expansion of the biofuel sector saved Brazil about $405 billion in fuel imports over the past few decades.

Global policies such as the Renewable Energy Directive (RED II) and the Renewable Transport Fuel Obligation (RTFO) aim to make biofuels a key part of decarbonising the transport and energy sectors.

Which countries are leading the sector?

Several countries have thriving production agendas, including Brazil (sugarcane ethanol), Indonesia (biodiesel), and India (ethanol blending), according to the Organisation for Economic Co-operation and Development (OECD).

Ethanol and compressed biogas (CBG) are leading the growth in India, where the IEA says biofuel production, including biodiesel, could double by 2030 with suitable policies. Ethanol consumption there has scaled from under 2 billion litres to 11+ billion litres since 2018.

Global production of liquid biofuels has grown sevenfold over 20 years, driven by policies, particularly in the US, Brazil, and the EU, while consumption is projected to grow in Colombia, Argentina, Malaysia, and Thailand.

Planète Énergies cites the US, Brazil, and Indonesia as the top three producers, while China has significantly accelerated since 2023. Along with the EU, those regions produce more than 80% of the world’s total.

Brazil intends to increase biofuel production fourfold by 2035, according to Minister of Mines and Energy, Alexandre Silveira de Oliveira.

Other significant ethanol producers include Paraguay, the Philippines — projected to reach nearly 0.8 billion litres each by 2034 — and Peru, which is also a major biomass based diesel producer, along with Malaysia and the Philippines, says the OECD.

While most countries produce biofuels for domestic use, Singapore’s biomass-based diesel is largely exported. China, the US, the EU, Canada and Malaysia dominate biomass-based diesel exports, with a combined market share of 79% (OECD).

How is policy promoting biofuel adoption?

The International Renewable Energy Agency (IRENA) says decades of strategic policies, including the RenovaBio Initiative and the Fuel of the Future law, have made Brazil a biofuels leader, notably in ethanol and biodiesel. The government says blending anhydrous ethanol in gasoline is set to increase to 27%, targeting 35% by 2030, and the biodiesel blend in diesel rose to 15% in early 2025, with plans to reach 20% by 2030.

The IEA says India operates about 170 CBG plants with almost 300 under construction.

Canada’s Biofuels Production Incentive programme took effect in January. Designed to stabilise and protect domestic biofuel production capacity, it will give CAN$370 million in funding over two years.

In 2005 and 2007, the Renewable Fuel Standard mandated a minimum volume of US transport fuel to be sourced from biofuels. In Argentina, the 2021 Biofuels Law mandated a 5% blending rate for biomass-based diesel, according to the IEA.

Are there barriers to bioenergy production?

Yes, it can be highly dependent on changes in public regulations.

Relying on food-based feedstock carries risks such as harvest disruption, and critics have highlighted the impact of rapidly expanding monocultures, such as soy and sugar, on ecosystem health, water resources, and food security. Palm oil has courted controversy over massive land needs and biodiversity loss.

Currently, at least 90% of world biofuels come from food crops, rather than waste oils or fats. Consultancy Cerulogy estimated that 32 million hectares of global land are dedicated to biofuels.

OECD says interest in advanced biofuels is rising. But expanding production capacities remains challenging due to higher development costs than for fossil fuels, and government support will remain necessary.

ScienceDirect said Brazil’s biodiesel industry has experienced considerable growth, but technological goals in feedstock diversification, production processes, storage and stability, and quality control have largely not been achieved.

Are there downsides to biofuels?

Critics say they can raise food prices; already higher because of the war-fuelled surge in energy, transport and fertiliser costs.

Last year, Brussels thinktank Transport and Environment suggested biofuels were responsible for 16% more global CO₂ emissions than fossil fuels they replace “due to the indirect impacts of farming and deforestation”. For example, Semafor says Indonesia is planning a 560,000-hectare bioethanol estate in a sensitive forested region of Papua, while Brazil is expanding sugarcane cultivation in the Cerrado, home to many endemic and threatened species.

More positively, Empresa de Pesquisa Energética says Brazil is embracing “land-sparing” techniques, promoting the conversion of degraded pasture to meet rising demand without deforestation.

The Biofuture Industry Council argues that biofuels can be produced sustainably, and that certification and verification are improving.

How else is the sector evolving?

Growth is shifting from first-generation biofuels to technologies such as cellulosic ethanol and advanced biodiesel. These use non-food biomass, such as agricultural residues, forestry waste, and municipal solid waste, for a more sustainable approach without impacting the food supply.

Emerging options include algae-based biofuels (biodiesel, bioethanol, jet fuel), produced from photosynthetic microorganisms and utilising wastewater, and biohydrogen generated primarily from water using biological or electrochemical processes.

Produced from biomass with low-intensity harvesting, biomethanol can improve fuel efficiency when blended with gasoline or used in fuel cells, while fourth-generation synthetic biology-based fuels use engineered microbes to convert CO₂ and organic waste into liquid fuels.

IRENA says Brazil is exploring a link between bioenergy and hydrogen, aiming to use waste-to-hydrogen technologies for green hydrogen production in refineries.

Electric vehicle sales and solar panel imports have surged since the conflict in the Middle East began in late February, early signs that higher fuel costs and supply risks are reshaping behavior. 

Seoul — which imports the majority of its energy, including 70% of its crude oil via the Strait of Hormuz — has rolled out a supplementary budget with 540 billion won ($365 million) for solar and wind projects, energy storage systems and EV subsidies.

The shifting consumer demand and increased fiscal support suggests the crisis is influencing both markets and policy. But core targets — expanding clean power, phasing out coal and reducing gas dependence — predate the conflict, raising questions over the depth of the structural change.

“The government has set the right direction and framing, but it’s not yet doing enough to turn this into a real opportunity to accelerate the transition,” said BloombergNEF analyst David Kang. “The biggest missed opportunity is Korea’s long-delayed power market reform, especially on the retail side.” 

Liberalizing retail electricity markets, which are still dominated by Korea Electric Power Corp., would allow the state-backed utility to focus on grid upgrades needed to integrate renewables and EVs, said Kang. 

The climate ministry said reforms are underway and pledged to deliver tangible results from the transition.

President Lee has repeatedly framed the Iran War as a catalyst for faster change.

“The Republic of Korea as a whole must move very swiftly toward renewable energy,” he said last month. “Our future will be at a serious risk if were continue to rely on fossil fuels.”

South Korea gets about 80% of its energy from fossil fuels, of which 93% is imported, highlighting the nation’s high external dependence. Meanwhile, demand is rising from AI data centers, electrification and advanced industries.

Lee’s strategy, laid out before the crisis, centers on a state-led transition. He has pledged to phase out coal by 2040, cut gas use and expand renewables, while his government also set tougher emissions targets.

An April roadmap targets a 20% share of renewables in power generation and 100 gigawatts of capacity by 2030, as well as grid upgrades.

Consumers are already responding. Domestic EV sales more than doubled in March from a year earlier, while solar panel imports rose 137% to a record $76.6 million. 

The trend mirrors global shifts toward EVs, rooftop solar and other low-carbon technologies as energy security concerns grow.

Still, gaps remain. South Korea was among the few countries to see a significant increase in coal-fired generation following disruptions to oil flows through the Strait of Hormuz, according to the Centre for Research on Energy and Clean Air. The group said the rise was mainly because of weaker nuclear output.

Nevertheless, it illustrates how the nation still falls back on fossil fuels under stress. Coal and gas continue to account for the bulk of power generation, while renewables make up only about a 10th, with projects slowed by permitting and grid constraints.

South Korea’s transition lags industrial peers by about 15 years, but recent policy signals point to a stronger push to accelerate the shift, according to Paige Nguyen, Asia Director at the Institute for Energy Economics and Financial Analysis.

“Although South Korea’s renewable installation costs remain relatively high by global standards, they are becoming increasingly competitive and, in many cases, are already on par with or below the marginal costs of LNG-fired power generation,” Nguyen said.

Nuclear remains a key variable. Lee has backed continued reliance “for the time being,” maintaining plans to build two reactors and one small modular reactor, while saying any further expansion will be reviewed in line with the energy mix and public consensus.

Whether momentum leads to faster permitting, grid investment and new capacity will determine if the shift goes beyond plans.

“The current crisis has created a powerful momentum,” said Katherine Hasan, an analyst at the Centre for Research on Energy and Clean Air. “But to ensure this isn’t just a temporary shield, the government needs to take a leap.”

©2026 Bloomberg L.P.

 Scientists in China and the US found that tiny, colored plastic particles absorb sunlight as winds blow them around the world, trapping heat and contributing to temperature rise, according to the peer-reviewed paper published Monday in the journal . 

“The plastic problem is not just in our blue oceans, it is also in the invisible skies above us,” Hongbo Fu, a co-author of the study and an atmospheric scientist at Fudan University in Shanghai, said at a press conference. “Climate models need to be updated.” 

The researchers’ laboratory experiments and atmospheric modeling indicate that airborne plastic pollution has 16.2% of the heat-trapping impact of black carbon, the second biggest contributor to global warming after carbon dioxide. That effect is small on a global scale, according to the scientists, but can be significant in areas with high volumes of plastic, such as parts of the Pacific Ocean. There, plastic particles had 4.7 times the impact of black carbon. 

Scientists had previously detected the presence of nanoplastics and microplastics, which range in size from a billionth to a millionth of a meter, in the atmosphere. As plastic waste washes into the ocean and litters the landscape, it breaks down into smaller and smaller pieces when exposed to sunlight until winds sweep the particles into the atmosphere, where they become suspended in air currents. 

The planet is awash in plastic trash and its deleterious consequences for the environment, wildlife and human health is the subject of ongoing study. But past research suggested that microscopic plastic has a negligible impact on global warming, as white-colored plastic particles reflect sunlight. 

The scientists at Fudan University, however, found that the majority of plastic particles in the atmosphere are colored and trap heat. Drew Shindell, a climate scientist at Duke University and a co-author of the paper, said their experiments break new ground by precisely measuring the rate at which different-colored particles absorb sunlight. 

He said atmospheric plastic particles either are already dark, or lighter ones darken as they age. “The net effect is warming,” said Shindell. 

Those impacts are maximized in regions of the world where plastic pollution is concentrated, such as in the Texas-sized Great Pacific Garbage Patch that lies between California and Japan, the researchers said. Typhoons and tropical cyclones can also create atmospheric hotspots and affect regional climate patterns as strong winds suspend more plastic particles in the air. A super typhoon in 2023, for instance, caused a nearly 51% increase in the atmospheric concentration of nanoplastics, according to the paper. 

The scientists said the effects from such extreme weather would likely be strong but short-lived in the immediate area. 

Exactly how much warming is attributable to plastic remains to be determined due to the difficulty of measuring the concentration of particles in the global atmosphere and the rates at which they enter the air from the ocean or land. That means the researchers could be underestimating or overestimating the impact on climate change. 

“We need more measurements from all around the world to really characterize more precisely how much of the stuff is in the atmosphere,” said Shindell. 

©2026 Bloomberg L.P.

The new company, which hasn’t been named yet, aims to build a fleet of reactors in the US, and will use designs from Westinghouse Electric Co., which is majority-owned by Brookfield Renewable Partners, Brookfield Asset said in a statement on Monday.

The initiative is expected to capitalize on the resurgence of the US nuclear industry, especially a $80 billion plan by the White House to buy reactors from Westinghouse. The new development company has been selected as project manager for Brookfield’s potential effort to revive the VC Summer project in South Carolina, a two-reactor plan that was abandoned in 2017. 

“We believe this platform has the potential to accelerate the American nuclear resurgence,” Wyatt Hartley, a Brookfield managing partner, said in the statement. 

VC Summer is considered a low point for the US nuclear industry. South Carolina utility Santee Cooper and the plant’s former co-owner, Scana Corp., halted construction on two AP1000 reactors in 2017 after costs climbed above $20 billion and Westinghouse, a contractor on the project, filed for bankruptcy. It was one of two US efforts to build the Westinghouse AP1000 reactors; the other, at the Vogtle plant in Georgia, was completed in 2024, seven years behind schedule and more than $20 billion over budget. 

But demand is now surging for electricity, especially to power artificial intelligence systems, and that’s prompted renewed interest in nuclear energy. Plant owners are working to restart three mothballed reactors, in Michigan, Iowa and Pennsylvania, and the partially built VC Summer plant is seen as a relatively fast way to connect more fission power to the grid. The Nuclear Company team includes veterans of both Vogtle and VC Summer, who would contribute valuable experience in building AP1000 systems. 

Brookfield has been evaluating whether to complete the South Carolina project since last year. It said in December it expects to make a final investment decision by late 2027, under a deal that would call for the company to pay Santee Cooper $2.7 billion to acquire the assets, and the utility also receiving a targeted 25% ownership share. 

©2026 Bloomberg L.P.

“It serves our national interests and long-term strategic objectives, aligns with our industrial, economic, and developmental ambitions, and gives us greater ability to accelerate investment, expand, and create value,” Sultan Al Jaber, chief executive officer of Abu Dhabi National Oil Co. said in a speech.

Adnoc touted its plans on Sunday, saying it’s planning to accelerate a growth push with 200 billion dirhams ($55 billion) in oil-project awards as part of an already-announced $150 billion program. The latest statement came the same day as a meeting of the Organization of Petroleum Exporting Countries, which agreed on a modest and symbolic increase in their June production quota levels.

OPEC’s control over production levels was a sticking point in the UAE’s participation in the group going back years. UAE Energy Minister Suhail Al Mazrouei has said that the disruption caused by the war in the Middle East created an opportune time for country’s decision to quit the group.

Adnoc has put UAE’s oil production capacity at 4.85 million barrels a day, which is higher than assessments by some other agencies. The country is increasing its capability to 5 million a day by 2027.

Leaving OPEC “is part of a broader effort to reshape our economy and industrial base through a vision that connects energy, technology, and industry, aligning our resources with national priorities to build a stronger, more resilient economy,” Al Jaber said on Monday.

©2026 Bloomberg L.P.

During the May online meeting, seven OPEC+ countries agreed to hike oil output targets by 188,000 bpd next month. The third consecutive monthly increase equals that agreed for this month, minus the share of the UAE, which quit OPEC and OPEC+ on 1 May.

Hike viewed as symbolic

The Iran war ceasefire remains in place, but Gulf oil supplies are still prevented from passing through the Strait.

Analysts said the latest OPEC+ “on paper” increase signals a business-as-usual approach, illustrating the cartel is poised to boost supplies once the conflict ends.

Jorge Leon, analyst at Rystad, said: “OPEC+ is sending a two-layer message to the market: continuity despite the UAE’s exit, and control despite limited physical impact.

“This is less about adding barrels and more about signalling that OPEC+ still calls the shots.”

First post-UAE agreement

Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman met on Sunday. With the UAE now out, OPEC+ has 21 members, including Iran, although in recent years only those seven nations plus the UAE — the world’s seventh-largest oil producer — have been involved in monthly production decisions.

Crude oil output from all OPEC+ members averaged 35.06 mbpd in March, down 7.70 mbpd from February, OPEC said previously, with Iraq and Saudi Arabia cutting most due to constrained exports.

UAE also leaves OAPEC alliance

The Organisation of Arab Petroleum Exporting Countries (OAPEC) announced on Sunday that the UAE had also exited the intergovernmental alliance. Formed in 1968 to boost cooperation among Arab oil exporters, it does not set production policies for its members.

UAE state news agency WAM said the UAE’s earlier decision to leave OPEC would enhance its “flexibility to respond to market dynamics while continuing to contribute to stability in a measured and responsible manner.” The UAE reassured it would “continue to act responsibly, bringing additional production to market in a gradual and measured manner, aligned with demand and market conditions”.

Independent oil strategy

Vandana Hari, Founder of Vanda Insights and Energy Connects columnist, suggested that a UAE OPEC exit could hasten post-Hormuz market normalisation, combining the ability to ramp up with export flexibility.

She said it was pumping about 3.4 mbpd before the war began on 28 February and claims a maximum capacity of 4.85 mbpd. Further expansion to 5 mbpd is 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 following a reopening of Hormuz,” Hari added.

Amena Bakr, Head of Middle East Energy and Opec+ Insights at Kpler, expects the UAE to produce oil well above pre-war levels.

“They want the flexibility of not having a quota … producing whatever quantity they want,” she commented.

“The United Arab Emirates sovereign decision to reposition itself within the global energy landscape, and to exit OPEC and OPEC+, is not a decision directed against anyone,” H.E. Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, and ADNOC Managing Director and Group CEO, said in his keynote address at the Make it in the Emirates forum in Abu Dhabi. “It is a carefully considered strategic decision that reflects our confidence in our capabilities, and our ambition for a more diversified economy and a better future”, he said.

“The United Arab Emirates’ sovereign decision to reposition itself within the global energy landscape, and to exit OPEC and OPEC+, is not a decision directed against anyone. It is a carefully considered strategic decision that reflects our confidence in our capabilities, and our ambition for a more diversified economy and a better future.”
- H.E. Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, and ADNOC Managing Director and Group CEO

Supporting stable global markets

Speaking at the same forum, H.E. Suhail Al Mazrouei, UAE Minister of Energy and Infrastructure, said the UAE’s exit from OPEC and OPEC+ was a strategic imperative in line with its future ambitions and the country would continue to be a provider of reliable, responsible, and lower-carbon energy supply while supporting stable global markets.

“We are a responsible producer … We're dealing with many of the world class industrial countries that are dependent on us, and we owe it to those partners who elected to invest the UAE to produce what the world requires, without restrictions, with collaboration, of course, with all other producers”, he said. “We are not new to this market. We understand that we will always be acting responsibly. Hopefully, we will contribute as well to world stability between supply and demand”, he added.

“We are not new to this market. We are a responsible producer … We're dealing with many of the world class industrial countries that are dependent on us, and we owe it to those partners who elected to invest the UAE to produce what the world requires, without restrictions, with collaboration, of course, with all other producers.”
- H.E. Suhail Al Mazrouei, UAE Minister of Energy and Infrastructure

'Reopen Hormuz without any restrictions'

Both the ministers were categorical in their view that the Strait of Hormuz must remain open without any restrictions for the benefit of the global economy. “The Strait of Hormuz must never be used as a tool of coercion. Freedom of navigation is non-negotiable”, H.E. Dr Al Jaber said. Highlighting that the continued closure of the Strait was a security issue rather than a supply issue, the ministers observed that opening the waterway was the only way to stabilise global markets.

A bulk of the global energy supplies and maritime traffic that uses the strategic chokepoint has come to a standstill following the Middle East conflict that started on 28 February, revealing a key vulnerability for global trade.

Highlighting how the industrial sector plays a key role in accelerating the UAE economy, with its contribution leapfrogging by 70% to reach Dh200 billion ($55 billion), H.E. Dr Al Jaber identified energy, technology and industry as the key pillars of the economy. “Those who manufacture, own their decisions. Those who build, own their future. And those who combine both, secure their sovereignty and resilience”, he said.

ADNOC announces $55b investment

The comments came a day after ADNOC announced plans to award AED200 billion ($55 billion) in projects between 2026 and 2028, marking the next phase of its five year AED550 billion ($150 billion) capital expenditure plan and reinforcing its focus on domestic supply chains.

ADNOC said the planned awards – announced at the Make it with ADNOC forum – will reinforce delivery of the capital expenditure plan its board approved last year, which it described as an execution phase across large-scale developments.

Addressing the forum, H.E. Dr Al Jaber said ADNOC was entering a defining phase focused on pace, scale, and delivery. “As we deliver on this phase of growth, we are bringing together leading EPC contractors with 70 top UAE manufacturers to enhance accountability, maximise in country value and ensure Made in the Emirates products are first choice across our projects, and are at the core of how we procure, build, and execute”, he said.

Scaling industrial participation

Central to the announcement is ADNOC’s Local+ initiative — part of its ICV programme — which prioritises Made in the Emirates products that meet the company’s technical standards across project procurement.

The forum connected EPC contractors with 70 UAE based manufacturers that meet the required technical and qualification standards. According to ADNOC, the approach is intended to strengthen domestic supply chains and embed qualified local manufacturers more systematically into its project execution model.

By outlining awards through 2028, ADNOC has given suppliers a clearer view of upcoming opportunities. The awards are expected to span the company’s value chain, including upstream, downstream, and supporting infrastructure.

The $55 billion outlay, part of $150 billion the company had earmarked in capital expenditure through 2030, is planned for the period 2026 to 2028 and will help Adnoc meet rising global energy demand, the government-owned company said in a statement on Sunday.

The announcement coincided with a meeting of OPEC+ nations to decide on June production quota levels. Major members agreed via video conference to a modest and symbolic increase, delegates said, as the group sends a business-as-usual message following the UAE’s surprise exit.

“Adnoc is entering a defining execution phase in its strategy, driven by scale, pace and a laser-focus on delivery,” UAE Minister of Industry and Advanced Technology and Adnoc Chief Executive Officer Sultan Al Jaber said in the statement.

The UAE announced its departure from the oil cartel as of this month, saying the shortages caused by the Iran war will require agility to respond to market demands without being constrained by the collective decision-making process of the wider group.

The UAE’s OPEC departure deals a significant blow to the group, and comes after years of tension with its leader Saudi Arabia.

(Updates with broader spending plan, OPEC+ move from second paragraph)

©2026 Bloomberg L.P.

Hopes of an early easing of the twin blockades by Tehran and Washington faded after Trump said he’d review the plan, but cast doubts on whether it would satisfy him, saying Iran has “not yet paid a big enough price for what they have done to Humanity, and the World, over the last 47 years.”

A very large crude carrier that appeared to have made an outbound crossing several days ago, one of only a dozen such vessels to leave the Persian Gulf since the beginning of March, appears to be continuing its voyage with its cargo of Iraqi crude.

The Kin A, has left its anchorage at Duqm and is heading for the Suez Canal, according to vessel tracking data compiled by Bloomberg. 

The vessel popped up on tracking screens on Saturday off Duqm on the Omani coast, having previously been seen more than three days earlier heading toward Hormuz after loading at Iraq’s Basra terminal. It would likely have crossed the strait on Wednesday.

Observed commercial traffic in Hormuz between Saturday morning and Sunday afternoon was limited to the usual mix of small China-linked or Iran-affiliated ships, vessel-tracking data show.

The constrained movement highlights that access to the strait appears to be restricted to select vessels with regional alignment or approval.

Ship Movements

Outbound transits remained limited on Sunday morning. A single Iran-linked bulk carrier was the only ship observed leaving the Persian Gulf. It follows five ships making the outbound transit on Saturday, the most significant of which was the Sarv Shakti, carrying liquefied petroleum gas to India.

Vessels transiting Hormuz with active Automatic Identification System signals during the past day were confined to the narrow northern lane approved by Tehran.

Recent Iran-linked departures have largely stalled in the Gulf of Oman, though it’s unclear whether the ships are following regional itineraries or are being trapped by the US Navy blockade stationed further east outside the gulf.

Observed inbound transits on Sunday morning were limited to a single, small, Iran-linked cargo carrier. That follows two bulk carriers, a fuel tanker and an LPG carrier making the inward transit on Saturday.

The US blockade may encourage Iran-linked ships entering or leaving the Persian Gulf to switch off their signals to avoid detection, making it harder to get an accurate picture of traffic. That means transit figures may sometimes be revised higher when vessels reappear far away from the riskiest waters.

Even before the US imposed its latest restrictions, it was common for Iran-linked ships to stop sending signals as they headed into Hormuz to exit the Persian Gulf. They generally didn’t enable them again until well into the Strait of Malacca in Southeast Asia, about 13 days’ sailing from Iran’s Kharg Island.

NOTES: 

Because vessels can move without transmitting their location until they’re well away from Hormuz, automated positioning signals were compiled over a large area covering the Gulf of Oman, the Arabian Sea and the Red Sea to detect those that may have departed or entered the Persian Gulf.

When potential transits are identified, signal histories are examined to determine whether the movement appears genuine or is the result of spoofing — where electronic interference can falsify the apparent position of a ship. 

Some transits may not have been detected if vessels’ transponders haven’t been switched back on. Iran-linked oil tankers often steam from the Persian Gulf without broadcasting signals until they reach the Strait of Malacca about 10 days after passing Fujairah in the UAE. Other ships may be adopting similar tactics and won’t show up on tracking screens for many days.

This tracker will be published during heightened tensions involving Iran, and aims to capture traffic for all classes of commercial shipping.

©2026 Bloomberg L.P.

The Treasury Department announced on Friday that it blacklisted firms helping launder billions of dollars in foreign currencies, including converting oil sales made primarily with Chinese yuan into other legal tender. In a separate statement, Treasury unveiled sanctions on China-based Qingdao Haiye Oil Terminal Co. China is the biggest buyer of Iranian oil. 

“We will relentlessly target the regime’s ability to generate, move, and repatriate funds, and pursue anyone enabling Tehran’s attempts to evade sanctions,” said Treasury Secretary Scott Bessent in a statement. 

The US is ramping up economic pressure on Iran with a naval blockade in the Strait of Hormuz, through which about a fifth of the world’s oil and liquefied natural gas flowed before the war. President Donald Trump is pushing Iran to capitulate to US demands as the strait’s closure sharply raises global energy prices.

As part of the US effort to pressure Iran into a deal, Treasury has issued a regular cadence of sanctions including some targeted at Chinese entities. 

The US also sanctioned Qingdao Haiye, a China-based petroleum terminal operator, for allegedly trading Iranian oil. The Chinese firm is accused of using deceptive shipping practices to import tens of millions of barrels of sanctioned Iranian crude, the Treasury Department said in a statement.

Targeting China highlights how Washington’s escalating pressure campaign has extended beyond Iran to those that purchase its oil. The US naval blockade has curbed Tehran’s ability to export crude, cutting the major OPEC producer from a major source of revenue. As a result, the country is rapidly running out of storage capacity, raising the risk of accelerated production cuts, according to Kpler.

On Tuesday, the US Treasury had warned banks they were at risk of secondary sanctions if they supported independent Chinese refiners that purchase Iranian oil, and last week announced sanctions on one of China’s largest private refiners over ties to Tehran.

©2026 Bloomberg L.P.

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.