It’s not unusual for an oil-price shock to become an existential crisis for some carriers. The Iran war is no different, with the forecast hit to profits so far in the billions of dollars. But there’s a stark difference between those that hedged well, those that hedged poorly and those that didn’t hedge at all.

While airlines including Ryanair Holdings Plc and Air France-KLM have reported that hedging offset some of the price increases, other carriers from US giant United Airlines Holdings Inc. to smaller AirAsia X Bhd are more exposed.

The sticking point for some airlines is that, just like buying home or auto insurance, hedging costs money. Airlines buy derivative contracts that will in theory rise in value, offsetting the increased price of jet fuel. Most of the time, that money goes down the drain when the market is calm, just like a homeowner’s fire insurance. For an industry that often runs on relatively thin margins, that extra cost counts.

It’s only when supply is squeezed and prices shoot upward that the hedges pay off. Like now, as the war in Iran has jet fuel now trading around $160 a barrel, more than 60% higher than before the war. 

While many European and Asian airlines use derivatives to lock in their jet fuel costs, peers in the US have been historically reticent to do so. The level of coverage typically varies among carriers, ranging at the end of last year from 30% to 80% and potentially even higher. Also, the instruments they use for the hedge make a huge difference in how well-protected they are.

“We continue to be well-hedged for the rest of the year,” Luis Gallego, chief executive of International Consolidated Airlines Group, which includes British Airways and Iberia, said on a recent earnings call. “This allows us to protect customers to some extent from the volatility and allows us to take, considered decisions on pricing and capacity.” 

So far, the fuel crunch hasn’t been as bad as feared. That’s in part because refineries, particularly in the US, have ramped up output and shipped record volumes overseas, helping fill the supply gap from the Middle East. But while there may be enough barrels to go around, they don’t come cheap. 

Ryanair said last week that it currently holds jet fuel and carbon derivatives contracts worth €2.1 billion ($2.4 billion) that are partly a result of a hedging program that locked in 80% of its fuel needs at $67 a barrel. Air France-KLM said late last month that while its fuel bill is likely to rise by $2.4 billion this year at current prices, that’s expected to be about $1.5 billion lower than it would otherwise have been. 

The amount of money on the table is enormous. Facing mountainous fuel bills, carriers are passing on higher costs to consumers. Cathay Pacific Airways Ltd. said in late March that hedges on 30% of its fuel haven’t been enough to cover rising costs. The carrier imposed fuel surcharges, some of which have been partly rolled back.

On the other end of the spectrum is AirAsia, which doesn’t hedge. It’s shares have fallen 42% since the war began, the worst-performing member of the Bloomberg World Airlines Large, Mid & Small Cap Index.

Brent Hedging

Some in Europe and Asia hedge using Brent crude oil as a proxy for jet fuel. Typically, oil and its byproducts move largely in tandem as long as the market is relatively balanced between supply and demand. 

Brent crude is a market full of buyers and sellers on an exchange — it’s liquid, in market parlance — reducing the costs related to hedging. Hedging using gasoil or even jet fuel itself, sometimes in over-the-counter markets that are far less liquid, tends to cost more.

The problem is when there’s a shock. In March and April, the closure of the Strait of Hormuz cut off supply of jet fuel to the market from Middle East refineries, as well as the types crude oil popular with Asian refiners. That forced some to reduce operating rates, further curbing fuel supply. 

“The real killer was crack spreads,” said Zameer Yusof, head of clean petroleum products analytics at Kpler. “Brent crude hedging wouldn’t have protected you from Singapore jet fuel margins blowing out past $100 a barrel — and that’s where Asian carriers’ exposure was concentrated.”

Since jet fuel is a relatively small market, the supply crunch drove prices up as much as 150% in Singapore, for example, compared with the 63% rally in Brent crude futures. As that gap, known as the crack spread, blew out, the gains on the crude contracts bought as a hedge failed to keep pace with the higher physical jet fuel prices that the airlines were having to pay every day.

“If they hedge Brent, they’re not hedging jet fuel,” Michael Leskinen, Executive VP and CFO at United Airlines, said in an earnings call last month, referring to non-US carriers. “The biggest portion of the move in jet fuel has been crack spreads. So I think this experience has proven once again that hedging is a poor policy.”

The crisis has already claimed Spirit Airlines, which wound down operations due to the soaring prices after a government bailout fell through. It might not be the last one, with Ryanair CEO Michael O’Leary warning there may be more corporate “casualties” to come among European airlines if the war continues. 

For Southwest Airlines Co., the last major US airline to buy protection, it’s the first fuel crunch they’ve entered into without a hedge for decades. The carrier ended its hedging program last year after deciding that it was too costly to run over the long term.

Southwest said the policy, which began in the 1990s, saved it over $3.5 billion from 1998 to 2008 but that higher levels of market volatility in general meant that the cost of doing so no longer outweighed the benefit. 

“Hedging had become very expensive,” Chief Executive Officer Bob Jordan said on an earnings call late last month. “You can’t predict an extraordinary circumstance like a war. If we all could, you’d hedge and then you wouldn’t, and it’s unreasonable to think you could do something like that.”

Delta’s Refinery

To be sure, one airline without a hedging program is arguably doing better than anyone else. Delta Air Lines is the best-performing carrier in the airline index, with shares up 13% since the war began. The edge: A refinery outside Philadelphia that it purchased 14 years ago. It supplies about 15% of Delta’s jet fuel needs while selling or swapping gasoline and diesel in the market.

“The refinery directly supplies a portion of our jet fuel needs, and its economics partially offset higher cracks, reducing the all-in price we pay for jet fuel,” Dan Janki, Delta’s chief operating officer, said in April on an earnings call, adding that that the refinery would save the company about $300 million on fuel in the second quarter.

If prices remain high and volatile, it’s likely to remain unattractive for many carriers to add to their hedges. 

“We’ll monitor the market closely, and when we see an opportunity, we include some new contracts,” Murat Seker, chairman of Turkish Airlines, said on the company’s most recent earnings call. “But overall, we are not continuing our regular hedge policy as the jet price and then the Brent price are very high.”

(Corrects speaker’s title in final paragraph of story published May 21)

©2026 Bloomberg L.P.

The company is working with advisers to sell the interest in 1.2 gigawatts of solar and wind farms in France, Germany, Poland and Spain, said the people, who asked not to be identified discussing confidential information. Any deal could fetch several hundred million euros, the people said.

A spokesperson for TotalEnergies declined to comment.

The potential sale is part of the oil major’s strategy of offloading 50% portions in renewable projects once they’re built to boost returns on such investments. While peers Shell Plc and BP Plc have pared back clean energy ambitions amid disappointing returns, TotalEnergies is pressing ahead with its diversification strategy in which power will represent about 20% of its energy output by 2030.

TotalEnergies last year agreed to sell a 50% stake in 1.4 gigawatts of North American solar assets in a deal valuing the portfolio at $1.25 billion including debt. It also sold 50% stakes in smaller portfolios of renewable assets in places including France, Greece and Portugal, and in some European electric car-charging networks.

This year, it agreed to sell a stake in a portfolio of German battery projects, and agreed with Abu Dhabi’s Masdar to pool onshore renewable energy assets in nine Asian countries that aren’t priority markets for the French firm.  

TotalEnergies plans to focus the growth of its power business in key markets such as Europe, the US and Brazil, as well as in countries where it produces oil and gas. It also wants to expand in select renewable markets, such as India and South Africa.

The French company bought German renewable project developer VSB Group last year, and completed the acquisition of a stake in European gas-fired power and biomass plants last month. 

©2026 Bloomberg L.P.

The vote will be held Oct. 19 and is a response to a bid by separatist activists to break away from Canada.

A group called Stay Free Alberta tried to force a referendum on secession, using a provincial law that allows citizens to petition the government for one. But last week, an Alberta court blocked that effort, finding the government failed to meet its duty to consult with Indigenous peoples on a major constitutional change. 

Instead, Smith’s government will call a new vote with the question: “Should Alberta remain a province of Canada or should the Government of Alberta commence the legal process required under the Canadian Constitution to hold a binding provincial referendum on whether or not Alberta should separate from Canada?”

Smith said in a televised address to the province that her position and that of her United Conservative Party is to remain in Canada, but she was “deeply troubled by an erroneous court decision that interferes with the democratic rights of hundreds of thousands of Albertans.” She said this new question avoids the legal problems the petition process faced because it doesn’t bind the government to move to separate from Canada.

Longstanding disputes between Alberta and the federal government have led to a sovereignty movement that’s seeking to reap the rewards of the region’s vast natural resources. Stay Free Alberta said its petition, which asked for an independence vote, garnered more than 301,000 signatures.

Jeffrey Rath, one of the leaders of the separatist movement, said there would be a lot of people upset at Smith’s new question and he would be campaigning to have her ousted as leader of the UCP at the next opportunity.

“There’s going to be 301,000 people in Alberta who stood in the cold, who stood in blizzards that did exactly what she asked them to do in order to get their question on a referendum ballot,” he said in an interview. “And she literally stabbed 301,000 people in the back.”

Surveys also suggest separatism lacks broad appeal and is particularly opposed by women and residents of Alberta’s largest cities. A poll last month of 1,200 residents by Janet Brown Opinion Research found support for the separatist cause at 27%, with 67% saying they would vote against it.

A rival petition from a group called Forever Canada, led by former Deputy Premier Thomas Lukaszuk, garnered more than 400,000 signatures supporting the province staying within Canada.

The premier has been threading a political needle on the issue of separation, knowing that a significant portion of her United Conservative Party membership favors leaving the country, while also saying she believes in staying within Canada. Smith’s said she understands separatists’ concerns, and she lowered the threshold for a citizen petition to trigger a referendum.

“If you wanted to put something on the ballot that would keep the separatist question in play in Alberta, I think this is as far as you can go inside the legal parameters that have been set out by these court decisions,” Lisa Young, a political scientist at the University of Calgary, said in an interview.

Smith has previously announced that voters would get to weigh in on nine other questions on Oct. 19, largely to do with immigration measures and provincial powers within Canada.

Alberta, a province of about 5 million people, holds most of the country’s known oil reserves and exports millions of barrels daily to the US. Smith recently signed an agreement with Prime Minister Mark Carney’s government to advance a new pipeline to Canada’s west coast that would aim to start construction in September 2027.

Sheldon Sunshine, chief of Sturgeon Lake Cree Nation, one of the groups who successfully challenged the separation petition, said in an interview the potential breakup of the province was a uniting cause among Indigenous groups and they would continue to campaign to stay in government.

“We’re going to challenge them legally. We’re going to use every means that we have available to us,” he said. “We’re organized, we got teams put together, we’re preparing for anything.”

Ahead of Smith’s announcement, a group of 22 First Nations issued a statement saying despite submitting documents to cabinet and a special legislative committee that they had not yet heard back from the government on their concerns about a possible new question on separation.

Federal Intergovernmental Affairs Minister Dominic LeBlanc said on X that the government remains “focused on building a stronger Canada for all, in full partnership with Alberta and to the benefit of all Albertans and all Canadians.”

Pierre Poilievre, leader of the federal Conservative Party, earlier on Thursday said his party would be supporting the remain movement.

“I will be campaigning across the province of Alberta, encouraging Albertans to stay as part of the Canadian family, and encouraging nationwide unity for all Canadians,” he said.

The independence movement was embroiled in controversy earlier this month when police began investigating the unauthorized use of about 3 million citizens’ personal data in Alberta.

An activist group called the Centurion Project was accused of unauthorized possession of Alberta’s list of electors, which contains names, addresses and other personal information of voters. The dataset comprises about three-fifths of the province’s population, according to Elections Alberta.

(Updates with reaction starting from seventh paragraph.)

©2026 Bloomberg L.P.

The signing of two co-operation agreements between ADNOC and Indian companies will see the Abu Dhabi-based major seek future opportunities in crude oil, gas storage, and strategic reserves, in collaboration with the Indian Strategic Petroleum Reserves.

One agreement could raise ADNOC’s crude oil storage in India by up to 30 million barrels, using facilities in Mangalore and exploring options at Vishakhapatnam and Chandikol.

Storing millions of barrels of crude oil in India’s domestic petroleum reserves could give the country a critical buffer against future global supply chain disruptions.

The agreements, signed during a recent official UAE visit by Indian Prime Minister Narendra Modi, also examined the option of crude storage in the UAE port city of Fujairah as part of India’s strategic petroleum reserve, alongside storage opportunities for LNG and LPG in India.

ADNOC also has an agreement with Indian Oil Corporation for LPG supply and trading, including through ADNOC Global Trading, which builds on their existing 2023 LPG contract.

Growing existing ties

The strategic alliances advance bilateral collaboration in the energy sector and fortify the UAE-India bond, further strengthening their already robust energy relationship.

ADNOC’s partnerships with Indian companies meet growing energy demand, support economic growth, and diversify the energy mix. 

These agreements boost energy security as global shipping faces challenges stemming from the Iran conflict and the closure of the Strait of Hormuz. They strengthen the resilience of UAE-India energy supply chains and enable ADNOC to play a greater role in India’s growth story and energy needs.

Mutual opportunities

The UAE is the country’s third-largest trading partner after the US and China, while India is its largest export destination and trading partner.

H.E. Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, and ADNOC Managing Director and Group CEO, commented that India’s scale and growth trajectory make it “one of the defining energy markets of our time”.

He said: “As demand accelerates alongside a rapidly expanding population, the strength of the UAE-India energy partnership becomes ever more critical.

“These agreements reinforce supply security, deepen our strategic ties, and underscore ADNOC’s role as a dependable and reliable partner in powering India’s long-term economic growth.”

Building on historic trade

The UAE region and India have a trading legacy dating back centuries. Their energy relationship formally began in the mid-1970s — shortly after the formation of the Emirates — with crude oil exports from Abu Dhabi.

The relationship expanded to a multidimensional partnership when the UAE-India Comprehensive Economic Partnership Agreement (CEPA) went into force on 1 May, 2022.

With both countries targeting $200 billion in trade by 2032, they have further strengthened bilateral economic ties, including in energy and defence. Government data shows trade activity increased 14.7% in 2025.

The UAE is expected to boost oil output following the 1 May announcement to leave OPEC, enabling greater freedom to increase production and supply to importers such as India, potentially at lower prices. The country already imports more than 85% of its crude requirements — about 11% of that, or up to 450,000 bpd — from the UAE.

Fuelling India’s growth

In January, the two countries also signed a $3 billion deal for India to buy LNG from the UAE.

New Delhi aims to raise natural gas's share of its energy mix to 15% by 2030, while ADNOC Gas has pledged to broaden its customer base and expand its presence in India and other key Asian growth markets.

The ADNOC subsidiary made a 10-year sales and purchase agreement (SPA) with Hindustan Petroleum Corporation Limited (HPCL), a unit of state-owned Oil & Natural Gas Corporation (ONGC).

This was announced during the January visit by UAE President Sheikh Mohamed bin Zayed Al Nahyan to India’s Prime Minister. At the time, Dr Al Jaber and Vikas Kaushal, Chairman and Managing Director of HPCL, reiterated the importance of the growing relationship between ADNOC and its Indian partners and customers.

ADNOC Gas has signed LNG contracts and agreements totalling more than $20 billion with Indian energy firms, making India the UAE’s largest LNG customer.

By 2029, it will operate at least 15.6 mtpa of LNG, with 3.2 mtpa contracted to Indian firms.

ADNOC previously said: “As one of the world’s fastest-growing major economies and a key driver of global energy demand, India continues to be a strategic priority for ADNOC and sits at the centre of key global energy growth trends.”

“Iran and Oman must mobilize all their resources both to provide security services and to manage navigation in the most appropriate manner,” the Iranian ambassador to France, Mohammad Amin-Nejad, said in an interview with Bloomberg in Paris on Wednesday.

“This will entail costs, and it goes without saying that those who wish to benefit from this traffic must also pay their share,” he said in Farsi, through an interpreter, adding that the system will be transparent. “And if today there is any desire for the situation to improve, a solution must be found to tackle the root of the problem.”

Asked about the plan, US President Donald Trump rejected it.  

“We want it open, we want it free, we don’t want tolls,” Trump told reporters at the White House on Thursday, referring to the Strait of Hormuz. Oman’s government didn’t immediately respond to a request for comment.

Interview transcript: Iran’s Ambassador to France Discusses Hormuz and Gulf Relations

Iran effectively closed the waterway in response to US-Israeli airstrikes that triggered the war in late February by firing missiles at Washington’s Arab allies across the energy-rich Persian Gulf. 

The subsequent security crisis has all but paralyzed shipping in one of the world’s most important trade routes. US-Israeli attacks on Iran have killed thousands of people and caused significant damage to infrastructure. 

Situated between Iran to its north and Oman to the south, the strait connects the Persian Gulf to the Indian Ocean and normally handles a fifth of the world’s oil and liquefied natural gas supplies, as well as other commodities such as aluminum and fertilizers. 

Iran has been letting through few vessels while the US navy has been blockading Iranian ports since April 13. That’s caused energy prices to soar and sparked a global selloff of government bonds as inflationary pressures mount.

Amin-Nejad insisted that traffic hasn’t been completely interrupted and Iran has claimed, without giving evidence, that 26 tankers and other ships transited between Tuesday and Wednesday with the help of the Islamic Revolutionary Guard Corps.

That would be an unusually high number for recent weeks, but still far below pre-war levels of roughly 135 ships a day.

Amin-Nejad blamed exorbitant insurance costs for the decline, though shipping companies say the risk of missile and drone attacks, as well as hitting sea mines, is the main problem. Most say they won’t send vessels through the strait until the war’s over.

Iran and the US agreed to a fragile ceasefire on April 8 and are exchanging messages via Pakistan about a peace deal. The warring sides still seem far apart and have both said in recent days they’re prepared to resume hostilities.

The Hormuz strait is a key sticking point, with Europe and Gulf Arab states such as Saudi Arabia also saying Iran cannot have control over a chokepoint that has always been treated like international waters.

Now, Iran has expanded its claimed area of jurisdiction and set out new rules for vessels seeking to transit the waterway, which is roughly 24 miles (39 kilometers) wide at the narrowest point. That involves seafarers dealing with a new body called the Persian Gulf Strait Authority and sometimes getting payment requests of as much as $2 million for safe passage.

Iran says countries including China and South Korea have coordinated with the IRGC’s navy to get their vessels through. Neither country has confirmed that and Iran hasn’t said if they were charged.

Tehran has signaled it will keep control over Hormuz even after the war, to deter future attacks from the US and Israel. It could also be a means of raising revenue for the war-ravaged economy.

Trump has gone from suggesting the US itself could start charging fees to telling Iran it “better not be” thinking of tolls. At one point, he even said there could be a US-Iran joint venture for the strait.

The head of the United Arab Emirates’ main oil company underscored the concerns of Iran’s Arab neighbors when he said a “dangerous precedent” was being set with Hormuz.

“Once you accept that a single country can hold the world’s most important waterway hostage, freedom of navigation as we know it is finished,” Sultan Al Jaber said on Wednesday. “If we do not defend this principle today, we will spend the next decade defending against the consequences.”

Amin-Nejad downplayed tensions with the UAE and Saudi Arabia. The countries conducted separate, covert attacks against Iran before the ceasefire, Bloomberg reported. Those were in response to Iran firing thousands of drones and missiles at them and other states such as Qatar and Bahrain.

“The most painful or difficult moments for us were those when we had no choice but to attack military bases located on the soil of those countries, from which Iranian territory was being attacked,” Amin-Nejad said, adding that “accumulated misunderstandings” could be easily solved once the war stops.

Many of Iran’s projectiles targeted civilian areas and non-military sites such as ports and oil refineries.

The ambassador said the US underestimated Iran’s resilience.

“Their analysis was based on the belief that by putting pressure on the Iranian people, through sanctions and a sort of total embargo, they would be able to completely resolve the issue within three or four days,” he said. “They imagined that Iran was a second Venezuela,” a reference to the capture of Venezuelan President Nicolas Maduro in January.

(Updates with comments from US President Donald Trump in fourth paragraph.)

©2026 Bloomberg L.P.

In a letter to a global shipping watchdog, Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates said commercial and merchant vessels shouldn’t engage with the PGSA or cross the waterway using a route designated by Iran. The letter was issued earlier this week and distributed by the International Maritime Organization.

Earlier in May, Iran laid out an updated process for transiting the strait in which vessel owners needed to email the PGSA. The waterway has been largely blocked since the US and Israel began bombing Iran in late February, though a handful of ships have crossed by following a route approved by Tehran. 

“Iran’s purported route should be seen for what it is, an attempt to control traffic through the Strait by forcing vessels to use a route within its territorial waters, which can be exploited for monetary gain through the imposition of toll fees,” the letter said. “Any understanding or recognition of Iran’s proposed route and PGSA as an alternative would set a dangerous precedent.”

The view of those countries matters because in normal times they are exporters of significant volumes of energy, meaning shipowners willing to engage with Iran would risk irking other major regional producers. The IMO, which is the UN agency for shipping, has previously said charging for tolls for crossing Hormuz would be unacceptable, a view echoed by two of the world’s biggest commodity traders last month. 

©2026 Bloomberg L.P.

Inpex reached an agreement in principle with BP Plc, PT Perusahaan Gas Negara Tbk, PT PLN Energi Primer Indonesia and Shell Eastern Trading (Pte) Ltd. for LNG offtake from the Abadi LNG Project in eastern Indonesia, the company said in a statement on Wednesday. Inpex will work with the potential customers toward finalizing sale and purchase agreements. 

In a separate statement on Thursday, Perusahaan Gas Negara said it signed a preliminary agreement to buy LNG from the project for 15 years starting in 2033. 

The announcement signifies a step forward for the project, which is expected to have an annual production volume of 9.5 million tons, or about 10% of Japan’s imports. The Japanese firm aims to take a final investment decision in 2027. Inpex’s local subsidiary will be the operator, while Pertamina Hulu Energi PT and Petronas Masela Sdn. Bhd. hold stakes. 

Inpex also reached an agreement in principle with fertilizer maker PT Pupuk Indonesia (Persero) for pipeline gas supply from Abadi LNG Project, the firm said in its statement. 

©2026 Bloomberg L.P.

Brent neared $106 a barrel after sliding 5.6% on Wednesday, while West Texas Intermediate was around $99. Trump’s comments to reporters stoked hopes for a deal between Washington and Tehran that would see a near-term restart of energy flows through the critical Strait of Hormuz.

Conflicting headlines about the status of negotiations have buffeted oil this week, and prices are still more than 40% higher than when the war started at the end of February. Still, traders have consistently priced in the possibility of an abrupt deescalation, including a deal under which Iran reopens the key shipping lane and unlocks millions of barrels stuck in the Persian Gulf.

Though a peace deal with Iran stands to sink prices, “the physical markets are still in disarray,” said Joe DeLaura, global energy strategist at Rabobank. “It takes up to 55 days to get oil from the Persian Gulf to its destination, which means inventories will still be drawing during that period.”

Even if the Iran conflict ended immediately, Middle East oil flows would not fully recover until well into 2027, Abu Dhabi National Oil Co. Chief Executive Officer Sultan Al Jaber said Wednesday. The Strait of Hormuz closure was the most severe supply disruption on record, he said.

Already, global stockpiles of crude oil and products are being drawn down at a record pace this month as the war drags on, curtailing supplies, according to Goldman Sachs Group Inc.

US crude inventories slid by about 7.9 million barrels last week, broadly in-line with earlier estimates from a widely followed industry group. Exports were shy of recent record-high levels, as overseas buyers stock up on American oil to offset disruptions to Middle East supply.

Some nascent signs of higher flows through the strait are also siphoning risk premium out of crude prices. Three oil supertankers appeared to attempt to cross the waterway, the latest in a small uptick in traffic after a relative lull in recent days. Iran claimed 26 ships passed in the last 24 hours, though it has previously suggested far larger transit numbers than ship-tracking indicates.

Trump said on Wednesday “we’ll see what happens” with Iran, adding that a deal will be made or “we’re going to do some things that are a little bit nasty, but hopefully that won’t happen.” He has repeatedly threatened to restart strikes on Iran if it doesn’t agree to his peace terms.

Iran is reviewing the US’s new draft in response to Tehran’s 14-point proposal and is yet to give a response, the semi-official Tasnim news agency reported, citing a source close to the country’s negotiating team. Earlier in the day, Iran warned it would retaliate beyond the Middle East if the US or Israel attacks it again.

©2026 Bloomberg L.P.

SB Energy, based in Redwood City, California, is looking to capture investor demand for firms building out power infrastructure for artificial intelligence data centers. The company has raised more than $1.8 billion to fulfill its data center ambitions from SoftBank, OpenAI and Ares Management over the past year.

In February, SB Energy unveiled plans for a 9.2-gigawatt natural gas power plant with an estimated cost of $33 billion. That plant would power SB Energy’s massive AI data center project being developed on a former uranium enrichment site in Piketon, Ohio. (One gigawatt is equivalent to a traditional nuclear reactor.)

Founded as a solar and battery storage developer, SB Energy has expanded its portfolio to include natural gas and building digital infrastructure for data centers.

That pivot has helped the firm tap into the data center boom. In January, OpenAI and SoftBank each committed $500 million to SB Energy and tapped the company to build and operate OpenAI’s 1.2 gigawatt data center in Milam County, Texas.

(Updates with context on the planned capacity of the Ohio project mentioned in the third paragraph. A prior version corrected the entity developing that project.)

©2026 Bloomberg L.P.

Brent traded below $111 a barrel, after losing 0.7% on Tuesday, while West Texas Intermediate was below $104. Trump said that the Iran war is going to end “very quickly” and that Iran “wants to make a deal badly” at the White House Congressional Picnic. 

Trump’s remarks followed earlier comments that the US “may have to give them another big hit” if Tehran rejects American peace terms, less than a day after he said he had called off an attack. The comments renewed concerns over a return to hostilities, though traders remain cautious after repeated threats of military action since the April 8 ceasefire failed to materialize.

When asked how long he would wait, Trump said: “I’m saying two or three days, maybe Friday, Saturday, Sunday. Something maybe early next week — a limited period of time.”

“Markets need the threat to be a lot more imminent,” said Vishnu Varathan, head of macro research, Asia ex-Japan at Mizuho Securities. 

Oil also fell alongside broader markets, as mounting inflation concerns fueled a rise in global bond yields. With US 10-year bond yields rising well above 4.5%, markets may have a greater incentive to bet on Trump backpedaling, Varathan said.

Now in its 12th week, the war has choked traffic through the Strait of Hormuz, driving global energy prices and inflation higher. The US also seized an Iran-linked tanker in the Indian Ocean overnight — at least the third such seizure targeting Tehran’s shadow fleet, the Wall Street Journal reported.

With no resolution in sight, news that NATO is discussing escorting ships through the strait should the route remain closed past early July also weighed on futures. Investors have increasingly priced in a prolonged closure, according to a Goldman Sachs Group Inc. poll earlier this month — meaning a NATO-led effort could return supply to market faster than expected.

At a meeting in Beijing on Wednesday, Chinese President Xi Jinping renewed calls for a ceasefire in the Middle East during talks with Russian counterpart Vladimir Putin, state news agency Xinhua reported, as the two leaders sought to reinforce ties amid the wars in Iran and Ukraine.

Meanwhile, White House officials are holding firm against restricting oil exports even as domestic inventories dwindle. An industry report indicated US crude stockpiles dropped by 9.1 million barrels last week, which would be the biggest decline since September if confirmed by official data due later Wednesday.

On Tuesday, a massive Brent crude put options bet equivalent to 134 million barrels traded in a single block. That rattled a market already on high alert for unusual flows.

©2026 Bloomberg L.P.

According to a landmark report by AVEVA and IMD, while 74% of leaders in such companies consider digital ecosystems a top strategic priority, only 27% report sharing data substantially with ecosystem partners. According to the report, the gap between ambition and execution leaves trillions in potential industrial intelligence untapped just as companies need it most.

Building and scaling business ecosystems

The inaugural report, jointly produced by AVEVA, a global leader in industrial software,  and IMD, the global business school, is titled Industrial Intelligence Report on Digital Ecosystems and the Future of Connected Industries, and was launched at AVEVA World 2026 in Milan on Tuesday.

In a fireside chat during the opening ceremony, Caspar Herzberg, AVEVA CEO, spoke with IMD Professor Mike Wade about the findings from over 275 interviews with leaders across 12 different sectors worldwide. Encompassing both quantitative analysis and detailed interviews with experts from the Port of Rotterdam, Kwinana in Australia and many others, the report distils how organisations can harness their industrial intelligence to build, orchestrate and scale business ecosystems.

The report reveals that while 74% of leaders consider digital ecosystems a top strategic priority, only 27% report sharing data substantially or extensively with ecosystem partners. Several illustrative case studies also emphasize the gap between ambition and execution: integration complexity, legacy systems and weak governance.

Industrial intelligence in action

The report found that organisations are increasingly seeking to construct digital ecosystems to confront higher-order business challenges - whether that is innovating faster, navigating supply volatility, or decarbonising complex global operations.

Yet, the gap between digital ecosystem ambition and execution remains wide. “With this collaboration with IMD, our ambition is not merely to understand the motivations behind the move to digital ecosystems, but to define the frameworks, competencies and leadership practices that will concretely enable companies to transcend silos and build more adaptive, ecosystem driven operating models,” Herzberg said.

AVEVA and AWS announce collaboration

During AVEVA World, the company also announced a multi-year strategic collaboration agreement (SCA) with Amazon Web Services (AWS) to accelerate the delivery of industrial intelligence in the cloud. The agreement deepens the companies’ existing relationship and establishes a framework for joint technology development, go-to-market execution, and customer migration support across the global industrial sector.

Under the terms of the agreement, AVEVA will expand its CONNECT industrial intelligence platform on AWS, as part of its broader move to a multi-cloud architecture. By bringing CONNECT and the broader AVEVA portfolio to AWS, the two companies aim to give industrial customers a faster, more scalable path to cloud-native operations, reducing the complexity and cost of managing on-premises infrastructure while enabling new AI-driven capabilities that were previously impractical at scale.

AVEVA and IFS to advance AI-powered asset intelligence

AVEVA also announced a technology partnership with IFS to enable complex industrial organisations to connect operational intelligence, enterprise execution and strategic capital planning. CEOs Caspar Herzberg and Mark Moffat shared the first wave of the collaboration at AVEVA World in Milan: Continuous Asset Decision Intelligence. This new solution is designed to turn real-time operational and asset data into smarter maintenance, investment and execution decisions across the integrated asset lifecycle. The benefit for customers is simple: less guesswork and timelier, evidence-based decisions.

AVEVA and Snowflake to unify IT/OT data ecosystems

As a part of the event, AVEVA also announced a collaboration with Snowflake, the AI data cloud company, to transform how industrial organisations unify, govern, and activate data across IT and OT environments. The collaboration establishes a direct, zero-copy integration between CONNECT, AVEVA’s industrial intelligence platform, and Snowflake’s AI Data Cloud, enabling customers to securely access, analyse, and activate industrial and enterprise data without the need for complex data pipelines or costly integration projects.

“Industrial customers need fast, secure access to trusted data across operational, engineering, and enterprise domains to support decision-making at scale,” said Rob McGreevy, Chief Product Officer at AVEVA. “Through this collaboration, we are extending our cloud-scale intelligence capabilities and enabling data to be accessed and used without duplication, helping bring operational intelligence into enterprise-wide decision within an open, partner-led ecosystem.”

These are the reasons why the UAE is doubling down across the value chain and building partnerships to drive an energy secure, prosperous future, H.E. Dr Al Jaber told the Atlantic Council on Wednesday during a virtual interview on the state of global energy markets amid geopolitical disruption, and how to achieve energy security, stability, and resilience in an era of volatility and uncertainty.

In a wide-ranging conversation with Helima Croft, Managing Director and the Head of Global Commodity Strategy and MENA Research at RBC Capital Markets, H.E. Dr Al Jaber also laid out the staggering macroeconomic toll of the closure of the Strait of Hormuz – from soaring inflation to severe energy under-investment, and described the ensuing energy crisis as an “everything story” that threatens the entire modern supply chain.

Despite these unprecedented challenges, H.E. Dr Al Jaber highlighted ADNOC’s operational resilience and explained the strategic rationale behind the UAE’s historic decision to exit OPEC and OPEC+. He also invited the energy industry to convene in Abu Dhabi in November to participate in ENACT and ADIPEC to better understand the lessons from the energy crisis and develop new avenues of long-term collaboration. 

Here are edited excerpts from the conversation:

You have been extremely vocal about the cost to the global economy of the closure of the Strait of Hormuz. Can you give us your latest thoughts on the cumulative impact of this crisis?

The closure of [the Strait of] Hormuz is the most severe supply disruption on record. So far, the world has lost over a billion barrels of oil. And that number goes up by almost 100 million barrels every single week. Brent is trading at 40% above pre-closure levels. And Hormuz, as we all know it, is not just an oil story. It is, in fact, an everything story. Think about it. We're talking LNG, jet fuel, fertilisers, ammonia, urea, aluminium, helium, critical minerals, plastics, consumer goods, and other general cargo products. In other words, the entire supply chain of the modern global economy from the food on your table to the planes in the sky to the chips in your phone. Fuel prices are up 30%, fertilisers are up 50%, airfares are up 25% – every farm, every factory, every family is paying the price and the ones who are most vulnerable end up carrying the heaviest load.

And this is now flowing into the macro numbers.

Global growth outlook has been cut to 3.1% for 2026. Inflation is already pushing past 4%. One stat really stands out. Just over 80 days into this conflict and almost 80 countries have now taken emergency measures to support their own economies. Even if this conflict ends tomorrow, it will take at least four months to get back to 80% of pre-conflict flows. And full flows will not return before the first or even second quarter of 2027.

"When it comes to ADNOC, as you know, some of our facilities were directly targeted and our infrastructure was directly hit. But this is exactly the kind of scenario our systems have been tested to withstand. We kept supplies flowing and worked closely with our partners and with our customers, shipment by shipment, to meet demand wherever we could. We redirected volumes through the East Coast and used our global trading network to secure additional supplies for our customers across Asia."

This is not just an economic problem. In fact, this sets a dangerous precedent. Once you accept that a single country can hold the world's most important waterway hostage, freedom of navigation as we know it is just finished. If we don't defend this principle today, we will spend the next decade defending against the consequences.

The costs you've laid out are absolutely stunning and I would argue still underappreciated by many watchers of this war. I want to ask you specifically about the impact on the UAE.

I'm sure everyone here knows how well we managed the situation. But yes, and of course, we were affected. And I am sure you will agree that this was an illegal, erratic, unhinged and unprovoked attack. We never called for this. In fact, we did everything to prevent it from happening.

The UAE was targeted by more than 3,000 missiles and drones, more than any other country in this conflict. Every single target was civilian, airports, terminals, refineries, gas-processing plants, residential areas, shopping malls, and most recently, the Barakah nuclear power plant. Now, whether carried out directly or through proxies, this was a terrorist act and a dangerous escalation. It showed a criminal disregard for civilian lives in the UAE and across the region.

And what we will remember from these months is not the missiles or the drones. It is in fact the millions of small acts of courage by people, nationals and residents, who kept our country running. And I am sure that you would agree this is a testament to the UAE's leadership that put people above everything else.

Could you talk more specifically about ADNOC operations? Can you talk about how your company has been resilient through this crisis?

When it comes to ADNOC, as you know, some of our facilities were directly targeted and our infrastructure was directly hit. But this is exactly the kind of scenario our systems have been tested to withstand.

We kept supplies flowing and worked closely with our partners and with our customers, shipment by shipment, to meet demand wherever we could. We redirected volumes through the East Coast and used our global trading network to secure additional supplies for our customers across Asia.

We are also working with our partners, in particular our partners in Asia to expand and restock strategic storage to strengthen resilience against future shocks. And we continue to adapt our commercial strategy to ensure our products remain very competitive, reliable, and attractive to customers around the world.

The best proof of how we have adapted to the situation is in our financial results. Even in this environment, every one of our listed companies has achieved strong returns, many of them outperforming market expectations and analysts. That tells you something important about the robustness of our business, the strength of our strategy, and the strength of our nation.

In March, you talked about the lessons that we need to learn from this experience. Can you talk about how we come back from this better?

A few things have really stayed with me from the last few months. First, resilience matters a great deal. In fact, it is a critical success factor. It may seem expensive until the day you need it. And when you need it, it becomes priceless.

Second, AI must be built in, not bolted on. In a crisis, the speed of insight and the speed of decision-making is the difference between continuity and disruption.

Third, energy security is no longer just about the ability to continue to produce. It is about routes, access, storage and redundancy. Right now, too much of the world's energy still moves through too few choke points. That is exactly why the UAE made the decision more than a decade ago to invest in infrastructure that bypasses the Strait of Hormuz. And it is why we moved ahead with our second pipeline in 2025. Today it's already almost 50% complete and we are accelerating its delivery toward 2027.

And that leads me to one of the biggest lessons, investment. As a sector and as an industry, we are dangerously under-invested. Upstream investment is sitting at around $400 billion a year, which barely offsets natural decline rates. Global spare capacity is around three million barrels a day. It should be closer to five. And in just two months, the world drew down around 250 million barrels from storage. We have 30 to 35 days of effective cover. We need to at least double that.

And one final lesson this period revealed is who our real and true partners are. When the pressure rises, you quickly see who stands firm, who stands with you, who actually steps up and shows up. In a crisis, partnerships are your real strategic reserves. A lot of lessons were learned, and I am very much counting on all of you coming to Abu Dhabi in November to participate in ENACT and ADIPEC in order for us to be able to drill down and get an engagement that will allow us to better understand these lessons learned and develop new avenues of developing long term solutions.

There has been a lot of conversation about the UAE's decision to exit OPEC and OPEC+. Can you walk us through the sort of rationale behind that decision and what you hope will be the benefits of taking that choice?

The UAE is entering a new chapter of growth. This was a sovereign strategic decision made with clarity, passion, conviction and full confidence. We want greater flexibility to invest. We want greater flexibility to grow, to expand, to partner, and to create long-term value. Because ultimately, real strength is not measured by the abundance of resources, but by how they are harnessed to serve the nation. It is about how you use them to build industries, create opportunities, and safeguard the economy for future generations.

The bottom line is we didn't move away from something. We moved toward something. We are moving toward a world that needs more energy. With demand for oil staying well above 100 million barrels into 2040s, the world needs more of what the UAE produces. And that is the lowest cost, lowest carbon barrels out there. And now we will have the flexibility to place more crude with customers everywhere.

"And one final lesson this period revealed is who our real and true partners are. When the pressure rises, you quickly see who stands firm, who stands with you, who actually steps up and shows up. In a crisis, partnerships are your real strategic reserves. A lot of lessons were learned, and I am very much counting on all of you coming to Abu Dhabi in November to participate in ENACT and ADIPEC in order for us to be able to drill down and get an engagement that will allow us to better understand these lessons learned and develop new avenues of developing long term solutions."

At the same time, we in the UAE need more energy to move at the speed of our ambition. In particular, natural gas is increasingly strategic, not only for our business, but for power generation, AI infrastructure, manufacturing, advanced industries and economic growth.

Ultimately, this was not a reaction or a rupture and not directed against anyone or any institution. For us, responsibility does not end with membership. Outside OPEC, the UAE will remain what it has always been, a disciplined, responsible, credible reliable and a stabilising force in the global energy markets. We will keep engaging, we will keep talking, and we will keep showing up for our friends and partners when and wherever they need us.

Can you talk about the relationship with the United States? How has it evolved and where do you see it going? And how does it encompass all the things you've talked about in terms of AI, investment, security?

The relationship between the United Arab Emirates and the United States is becoming more integrated, more ambitious, and more consequential every year. We have a strategic partnership across technology, investment, industry, infrastructure, energy, defence, and much more.

Last year, bilateral trade reached a record of $39 billion. And the UAE remained America's largest export market in the Middle East for the 17th consecutive year. The investment story is even more impressive. We have invested more than $1 trillion in the United States, with more to come over the next decade. Our energy investments, for example, through ADNOC, XRG and Masdar now total more than $85 billion across 19 states.

The US remains a top investment priority for us simply because of its unique infrastructure, its unique combination of rich energy resources, deep capital markets, and pro-investment regulation. Through XRG, we already have significant assets from the Rio Grande LNG terminal to 18 chemical sites across the US through Nova Chemicals, Covestro, and Borouge. And we are currently proactively and actively exploring opportunities with many of our partners. Some of them do exist as partners and some new partners.

Our approach is simply across the whole energy value chain, with special emphasis on the gas value chain from upstream shale to regasification terminals and the distribution network. And of course, our relationship extends beyond energy. This includes AI and AI infrastructure, data centres, semiconductors, advanced manufacturing, critical minerals, financial services, and much more.

We invest in America because we believe in America. We believe its energy resources, its capital markets, its innovation ecosystem, and its people, and the quality of the ecosystem that has been created that helps attract investments. The UAE and the United States are not just trading partners. We are co-investors in the economy of the next century. And that is a partnership built on trust, not on transactions. 

According to the agreements, QatarEnergy has acquired an 18% interest in block OFF-4, while Shell holds 32%, and APA Corporation retains the remaining 50%.

QatarEnergy has also acquired a 30% interest in block OFF-2, which is operated by Shell with a 70% interest. 

For the third exploration block, OFF-7, QatarEnergy has acquired a 30% interest, with Shell retaining 40%, and Chevron holding the remaining 30%. 

Expansion into Uruguay’s upstream sector

His Excellency Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, President and CEO of QatarEnergy, said: “We are pleased to strengthen our relations with our strategic partner Shell through these agreements, which mark our first entry into Uruguay’s upstream sector while further expanding our footprint in South America.”

H. E. Minister Al-Kaabi added, “We would like to thank the Uruguayan authorities for their support, and we look forward to working with our partners on this opportunity and to achieve positive results for the benefit of all parties.”

Blocks OFF-2, OFF-4, and OFF-7 are offshore along Uruguay’s Atlantic coast. They cover areas between 11,155 and 18,227 square kilometres, with water depths from 40 to 4,000 metres.

According to the EIA's Short-Term Energy Outlook, power demand set a second consecutive annual record at 4,195 billion kWh in 2025, with projected rises to 4,248 billion kWh in 2026 and 4,379 billion kWh in 2027.

As well as data centre demand, the EIA says the increase is also driven by homes and businesses using more electricity and less fossil fuels for heat and transportation. However, it says power demand growth is led by the commercial sector, which is expected to outpace residential demand in 2027 for the first time.

Data centre energy appetite

The International Energy Agency (IEA) says data centres globally currently consume 485-500 TWh of power annually, accounting for about 2% of global electricity demand.

This rise in global demand reflects a rapidly increasing trajectory, primarily driven by the AI boom. As a result, projections indicate AI-specific hardware consumption will triple by 2030, nearly doubling overall data centre power use in that period.

The IEA says the AI-energy nexus is continuing to evolve rapidly, with capital expenditure by the largest technology companies exceeding $400 billion in 2025 and anticipated to rise a further 75% this year, fuelling data centre growth.

“Capital expenditure of just five technology companies is now larger than global investment in oil and natural gas production,” said the agency. 

IEA satellite tracking found cutting-edge AI data centres more than tripled capacity in the past 18 months.

AI efficiencies in context

The IEA said worldwide data centre electricity demand rose by 17% in 2025, in line with its projections. 

AI energy efficiency per task is improving at a rate "unprecedented in energy history," due to software and hardware advances.

However, this is offset by the increasing use of new energy-intensive AI applications, such as video generation, reasoning, and agentic tasks, which the IEA says can consume thousands of times more energy than simple text generation.

Managing bottlenecks

The agency said bottlenecks across energy supply chains have tightened since its last report amid a wave of data centre applications and a broader trend of rapid load growth and electrification, as the AI ecosystem scrambles for electricity and grid connections.

“An individual server rack within an advanced data centre is only the size of a large refrigerator, but by 2027 it could have peak power demand equivalent to that of 65 households,” the report noted.

The IEA suggested a possible upside in its mid- to longer-term outlook for data centre power demand, driven by investments to relieve bottlenecks across energy equipment and chip manufacturing.

On-site gas power is emerging in the US as developers bypass slow grid connections, with 15–27 GW expected by 2030, though the IEA cites uncertainties, such as a global gas turbine supply crunch.

Driving power innovation

Scaled battery storage could be critical to ensuring reliable supply to AI training and model-use data centres that induce large, rapid power swings.

The IEA predicts that 20-25 GW of global battery storage could be installed by 2030. With the right incentives, this could become a grid asset in the broader AI-driven acceleration of electricity sector deployment and innovation.

The agency cautioned that data centres could be a prominent flashpoint for concerns around energy prices.

But the IEA report also highlighted that AI has potential as an important tool in enhancing energy security and sustainability, such as optimising existing grid capacity.

However, it warned that the energy sector is yet to fully seize these opportunities.

An IEA survey of companies found that a lack of digital skills was the single largest barrier to greater AI adoption in the energy sector, while globally, less than half of energy demand was covered by policy frameworks promoting AI uptake in the sector.

The idea has support from several members of the North Atlantic Treaty Organization, but doesn’t yet have the necessary unanimous support, said a diplomat from a NATO country. Both officials spoke on the condition of anonymity. Leaders from NATO countries will meet in Ankara July 7-8.

“The political direction comes first, and then the formal planning happens after that,” said Alexus Grynkewich, NATO’s supreme allied commander Europe, when asked about the possibility at a Tuesday press conference. “Am I thinking about it? Absolutely.”

Such a move would represent a shift in the military alliance’s strategy toward the US-Israeli war in Iran. Thus far, allies have insisted they would only be involved in the strait once fighting has stopped and they can form a broad coalition that includes many non-NATO countries. 

But economic woes are deepening, with the strait’s closure sending energy prices soaring and growth forecasts tumbling. 

It’s unclear exactly how NATO countries could guarantee safe passage for commercial vessels through the strait. A recent US attempt to do that was halted within days of being launched, despite Washington’s considerable military capabilities.

A spokesperson for the North Atlantic Treaty Organization didn’t immediately reply to a request for comment.

Iran initially blocked the Strait of Hormuz — which transits roughly a fifth of global oil and liquefied natural gas supplies — after the US and Israel began bombing the country in late February. 

The passageway has since become a source of tension between the US and its European allies in NATO, who refused to heed President Donald Trump’s demands that they help reopen the strait. 

Trump has repeatedly fumed about the reaction and Washington recently announced it would withdraw 5,000 troops from Germany. 

The senior NATO official said that while some allies still oppose authorizing an alliance mission for the strait, they would rally around the idea if the blockage persists. 

The NATO diplomat said that several allies do support intervening to help reopen the strait, but cautioned that others are still reluctant to be dragged into the conflict.

Some NATO members like Spain have been unequivocal in their opposition to the war. Madrid even barred the US from using its airspace and bases to attack Iran. 

Most allies, however, have quietly granted access to their bases to provide logistical support. 

A coalition led by France and the UK is also developing a plan to help secure navigation in the Strait of Hormuz once the fighting abates. Some countries have even positioned assets in the area in preparation.

That hasn’t been enough to placate Trump, whose anger has been specifically targeted at Germany. So far, however, the US has made no formal request for NATO involvement in the strait, Bloomberg previously reported.

(Updates with Alexus Grynkewich comment and additional context starting in the third paragraph.)

©2026 Bloomberg L.P.

The SunZia wind farm in New Mexico, providing 3.5 gigawatts of power capacity — enough to power one million homes annually — will be operational as soon as June 15, according to people familiar with the matter. The project includes a 550-mile transmission line carrying electricity to Arizona, and has been in the works for two decades.

The Pattern Energy Group LLC development is likely to be one of the last in a shrinking pool of blockbuster deals to reach fruition, with President Donald Trump’s government ending lucrative federal tax incentives and delaying permitting for renewables. The Pentagon is also sitting on a growing backlog of dozens of proposed US wind farms and withholding authorizations key for developing the power projects.

A spokesperson for Pattern Energy declined to comment.

Roughly 5,000 wind turbines are awaiting final approval from the US administration, according to a research last month from consultant Wood Mackenzie. Failure to clear projects currently held by the Department of Defense may reduce installations by 17% through the end of the decade, or by about 7 gigawatts, the report said.

SunZia will provide a key source of power ahead of what is forecast to be another hot summer across California and Western US states that will strain the grid. Drought and a moderate snow pack over the winter is set to reduce the amount of hydropower in the region, so wind could help provide a key source of relief.

US clean-energy installations are forecast to hit another record this year, despite facing policy opposition from the federal government. SunZia lined up $11 billion of funding in the last days of 2023.

©2026 Bloomberg L.P.

Surging demand from data centers, population growth, rising incomes and more battery-powered vehicles are all boosting demand for electricity, researchers wrote in BNEF’s annual New Energy Outlook on Tuesday. The report concludes that rapid electrification is set to accelerate the transition to clean energy.

“So far this decade, the world has suffered three substantial shocks to the energy system: the Covid-19 pandemic, the war in Ukraine and, most recently, the conflict in the Persian Gulf,” the analysts wrote. “Successive energy market shocks could be a boon for the energy transition as some countries look to decouple from imported fossil fuels and bolster their energy security.”

BNEF’s analysis is based on two potential future outcomes. The Economic Transition Scenario (ETS) is based on what is most likely to happen based on prevailing economic forces. The Net-Zero Scenarios (NZS) assumes climate policies are the main driver — in other words, it is underpinned by what governments have said they committed to at the Paris Agreement to lower emissions. 

In the ETS, where green policies exist but governments aren’t prioritizing them, solar and wind power both continue to increase their share of the global power mix. Solar becomes the largest contributor in 2032, while wind becomes the second largest in 2034, both displacing coal which is currently at the top spot.

This increase in renewable energy is supported by the deployment of batteries, which will be needed to store clean electricity for times when the sun doesn’t shine and the wind doesn’t blow. BNEF increased its projection for global energy storage from 220 gigawatts in 2025 to 2,000 gigawatts by 2035. While China is expected to see the biggest share of battery deployment for the next few decades, the ETS scenario also forecasts huge demand in India and Europe starting in the 2030s. 

BNEF’s analysis, based on recent carbon emission trends, shows that the world is on track to miss the most ambitious goal of the Paris Agreement to keep global temperature rise below 1.5C from pre-industrial levels. Under the ETS, the planet will heat up 2.4C by 2050, with emissions from two of the three biggest polluters — India, Southeast Asia and Latin America — continuing to rise. China, the world’s biggest emitter, will see its emissions fall, after having peaked in 2025. 

Even if the world reaches net-zero emissions by 2050, the projected warming by the end of the century is likely to be above 1.8C, higher than the 1.75C BNEF projected in 2024. 

Other major takeaways from the report:

• Both scenarios will see increasing spend on the energy transition. In the ETS, investments are set to rise 34% from $2.3 trillion in 2025 to $3.1 trillion average annually for the rest of this decade. The NZS requires a doubling to $4.8 trillion in the same period.

• In the ETS, oil demand peaks around 2029, driven by electrification of road transport. Gas demand continues to rise through 2050 and becomes the biggest source of primary energy by the 2040s, displacing oil.

• Despite almost $500 billion of equity investments in next-generation climate technologies, such as carbon removal, advanced batteries and geothermal, none have yet to mature to the commercial stage.

©2026 Bloomberg L.P.

The government is considering several options for the state-rescued company, including an initial public offering or a sale, according to a notice published in the Financial Times. No final decision has been made on the scope, timing or structure of a potential transaction.

Uniper was nationalized during Europe’s energy crisis after Russia cut gas supplies to the continent, leaving Germany’s largest importer of the fuel facing massive losses and forcing Berlin into a multibillion-euro bailout. 

Privatizing the company could allow the government to recover part of those costs, though it’s uncertain whether taxpayers would recover the full amount.

A sale may face objections from labor representatives. Employees favor a re-listing and “we continue to categorically reject an off-market sale,” Martin Geilhorn, head of Uniper’s workers council, said by email.

Germany began preparing Uniper’s return to private ownership last year, saying it preferred an IPO while also evaluating alternative options. Potential bidders that have shown early interest include Equinor ASA, Czech billionaire Daniel Kretinsky’s EPH and Brookfield Asset Management Ltd.

Before its 2022 nationalization, Uniper was owned by Fortum Oyj. The Finnish utility told Bloomberg that it would be “interested in assessing the opportunity” to buy its Swedish hydro and nuclear assets. Fortum has a so-called right of first offer for these plants until the end of this year that was secured during the sale, it said. 

The German government and its advisers have also spent months examining a potential merger with Securing Energy for Europe GmbH, another energy company nationalized during the crisis, producing multiple reports as the review process dragged on.

Time is increasingly becoming a factor. Under European Union rules, Germany must cut its stake in Uniper to no more than 25% plus one share by the end of 2028. A similar divestment process is expected for SEFE.

Interested parties have until June 12 to declare their interest to advisers JPMorgan Chase & Co. and UBS Group AG.

(Updated with Fortum comment in seventh paragraph.)

©2026 Bloomberg L.P.

The Bay Area university town of 120,000 is the first in the US to require sellers and buyers of single-family homes to replace fossil-fuel appliances or make other green upgrades as a condition of sale. It’s one of several cities leveraging real estate transactions to achieve carbon-emissions reduction targets as the Trump administration eliminates climate action. Austin, Minneapolis and Portland, Oregon, are among municipalities that require home sellers to obtain and disclose the results of energy audits to encourage voluntary efficiency improvements. 

Berkeley, though, is mandating that such upgrades happen. “What Berkeley is doing holds a lot of promise in terms of being a very effective way to increase the rate of retrofits as homes are sold and turn over to new owners,” said David Ribeiro, director of local policy for the American Council for an Energy-Efficient Economy (ACEEE), a nonprofit research organization. 

The city has long pioneered environmental policies that have later been adopted across the country, from curbside recycling in the 1970s to a ban on polystyrene-foam takeout food containers in the 1980s. Berkeley voters in 2006 set a target of reducing greenhouse gas emissions 80% by 2050 and buildings are the city’s second-largest source of carbon pollution after transportation, according to Ammon Reagan, the sustainability program coordinator for the city’s energy office. 

“Natural gas is the biggest source of building emissions and the biggest emission savings are from heat pumps,” he said. 

A 2024 report from RMI found that single-family homes account for 58% of US building emissions. “The evidence that we have is that just energy disclosure requirements prompt some behavioral change,” said Erin Sherman, a buildings policy expert at nonprofit RMI, which promotes decarbonization. 

Berkeley’s Building Emissions Saving Ordinance (BESO) took effect in January and gives credits for a home’s low-carbon systems with a minimum score of six credits needed. Home sellers must disclose their score and make any needed changes before a sale or the buyer must do so within two years. 

A heat pump is worth six credits, as is upgrading a home’s electrical system to make it heat-pump ready. Solar panels and batteries achieve three credits a piece if they’ve been installed within five years. An EV charger, induction stove and heat pump clothes dryer score two credits each. Homeowners also must also obtain and disclose an energy audit and a high score from the assessment gets two credits.

Electric-powered heat pumps don’t burn fuel to warm a home. Instead, they extract heat from the outside air and then circulate it through the home. They cool homes by reversing the process, removing hot air from inside the house and venting it outside. 

While they’re highly efficient, they aren’t cheap. Replacing a gas furnace with a heat pump in the Bay Area can run about $25,000. A heat pump water heater costs around $7,500. And rewiring an older house and upgrading the electrical panel so heat pumps can be installed can set homeowners back more than $40,000. 

Sellers can opt to defer such work to the buyer and each party puts $2,500 in a city escrow account to be used by the purchaser to come into compliance. If upgrades aren’t made in two years, the deposit is forfeited.

Reagan said that since January the city has received 80 escrow deposits, while 57 homeowners certified their prior compliance with BESO. Only nine applications for certification were for heat pumps installed this year in preparation of a sale.

Brokers said the emissions mandate is starting to change the dynamics of the market as BESO scores appear on listings. 

“Homes that are already electrified will be perceived as more move-in ready,” Berkeley broker Megan Micco said in an email. “Homes that defer everything effectively carry a hidden cost that informed buyers will factor into their offers.”

Micco listed the $1.25 million Mediterranean Revival whose upgrades let her highlight the house as “fully BESO compliant.” A mile away, agents recently held an open house at another 1930s Mediterranean bungalow, a smaller dwelling with a low BESO score priced at $898,000.

“Sellers typically aren’t going to do anything on that BESO list unless it’s related to being able to get insurance as they’re thinking about aesthetic improvements,” said broker Jen Wolan as she stood in the foyer of the home.  “

She noted that potential purchasers of her nearly million-dollar listing would be “one of the more budget buyers in Berkeley” and unlikely to have extra funds to electrify the house. So the sellers are considering spending as much as $9,000 to replace some older wiring to increase the home’s BESO score. 

“We're really excited any time we get listings that already have these upgrades because then we do advertise that,” she said.

©2026 Bloomberg L.P.

The Middle East conflict, which has disrupted gas supplies and lifted prices, is pushing buyers to “refocus” on alternative providers like Australia, said Sheffield, managing partner at Formentera Partners LP, which is helping develop wells in the country’s Northern Territory.

“They’re not going to want to rely on the products coming out of the Gulf,” he told Bloomberg at the Australian Energy Producers Conference in Adelaide on Tuesday. “Australia is sitting on a massive resource and I think a lot of buyers are going to rethink and think about diversification.”

While most of Australia’s production comes from conventional gas assets, the country also holds vast shale resources — trapped in more complex geology — that could be unlocked with the right technology.

Formentera received an investment commitment of up to $619 million in March from Japan’s Inpex Corp. to expand shale-gas exploration across Australia. Inpex will acquire 68,000 acres within Formentera’s 1.9 millon net-acre position in the Beetaloo Basin in the country’s north.

Local gas prices are currently “in the sweet spot” to make the venture viable and the firm will need to drill a few more wells for mid-stream companies to have the confidence to build a pipeline linking the Beetaloo project to processing plants, Sheffield said. He added Australia is an attractive investment destination for international investors, including Americans.

Australia remains one of the biggest exporters of gas globally. It “has a strategic geographical advantage” to supply Asia, where strong liquefied natural gas demand growth is expected through 2050-2060, according to Cecile Wake, the head of the Australian arm of Shell PLC, who spoke at the same conference.

©2026 Bloomberg L.P.

More than 70 days into the 2026 Middle East conflict, global energy markets have moved from acute disruption into a stabilised crisis regime, one in which disruption is managed but not resolved.

At the centre of the disruption lies the Strait of Hormuz, through which approximately 20 million barrels per day (mbpd) — close to 20% of global oil consumption, and around 20% of global LNG trade — typically transits. This disruption — described by experts as the largest oil supply disruption in history by affected volumes — has acted as a real-time systemic stress test, triggering immediate shocks across oil and gas markets, freight and insurance costs, and industrial supply chains.

Despite the scale of the shock, the system has largely stabilised through a combination of rerouting (approximately 6 mbpd of bypass capacity), strategic stock releases, and demand adjustment, offsetting much of the estimated 6.7 mbpd of disrupted flows. However, 65–70% of Hormuz-dependent volumes remain non-divertible in the short term, which underscores persistent structural vulnerability.

Market dynamics have been driven by expectations rather than actual shortages. Brent crude experienced sharp price swings, including increases of over 40% during the initial phase, while European gas benchmarks, particularly Dutch TTF, rose by approximately 15-25% in the initial shock phase, driven by LNG rerouting toward Asia, before stabilising. At the same time, freight rates and insurance premiums surged, reinforcing logistics as a key constraint.

The shock has propagated beyond energy into the wider economy, with uneven impacts across petrochemicals, fertilisers, aviation, and manufacturing. Overall, the crisis is accelerating a structural shift from efficiency-led optimisation toward resilience-led system design. Energy security is increasingly defined not by access alone, but by the ability to manage disruption across molecules, electrons, and data in real time.

The Hormuz factor: the systemic fault line

The Strait of Hormuz remains the single most critical chokepoint in the global energy system. Approximately 20 mbpd of crude oil, condensates, and petroleum products transit the Strait daily, representing close to one-fifth of global oil consumption, alongside roughly 20% of global LNG trade.

This creates extreme concentration risk: a single maritime corridor, less than 40km wide at its narrowest navigable point, effectively functions as a global macroeconomic lever. Its partial disruption immediately propagated across Asian and European markets, with Asian LNG importers in Japan, South Korea, China, and India experiencing spot market tightening, while European gas markets reacted through upward pressure on Dutch TTF pricing.

The impact extended beyond hydrocarbons. Delays and rerouting affected petrochemical feedstocks, fertilisers, food supply chains, and critical mineral logistics. Rising ammonia and fertiliser costs increased agricultural inflation risks, while petrochemical volatility disrupted plastics, industrial materials, and manufacturing inputs globally.

The Strait’s closure demonstrated that maritime chokepoints are no longer transport corridors only, but strategic nodes through which energy, food, industrial production, and inflation shocks are transmitted simultaneously.

Market volatility and pricing the war premium

As the crisis deepened, Brent crude markets rapidly embedded a geopolitical war premium, with sharp price swings, including increases of over 40% during the initial phase. Price formation reflected uncertainty over the magnitude and duration of the disruption and its impact on transport reliability, rather than over immediate production shortages. Historical precedent reinforces this dynamic.

During the 2019 attacks on Saudi Arabia’s Abqaiq facilities, a disruption of approximately 5.7 mbpd triggered a 15-20% surge in Brent crude prices, one of the largest single-day increases in decades, showing the non-linear sensitivity of oil markets to perceived supply risk. In 2026, Brent pricing similarly reacted to three overlapping uncertainties: the magnitude of supply disruptions, route uncertainty, and conflict duration.

European gas markets, particularly Dutch TTF, recorded forward pricing increases of approximately 15-25% in the initial shock phase, driven by anticipated LNG diversion away from Europe toward Asian demand centres. Even in the absence of immediate shortages, TTF pricing reflected tightening marginal LNG availability and increased competition for Atlantic basic cargoes.

Freight markets reinforced this effect, with LNG shipping rates rising significantly and crude tanker spot rates increasing materially, reflecting reduced effective fleet capacity due to longer voyage cycles and rerouting constraints.

This illustrates a defining characteristic of modern energy markets: expectations move faster than molecules. In tightly interconnected systems, anticipated scarcity is priced before physical shortages materialise.

Pipeline bypass and logistical agility of the Gulf

Despite severe disruption, global supply systems remained operational due to the Gulf’s redundancy infrastructure. Saudi Arabia’s East-West Pipeline (approximately 5 mbpd capacity, with technical capacity up to 7 mbpd) enabled partial Gulf-to-Red Sea rerouting, while the UAE Abu Dhabi- Fujairah pipeline added approximately 1.5 mbpd of export capacity outside Hormuz.

Together, this provides approximately 6 mbpd of bypass capacity under stress conditions, which arguably marked the first major live test of Gulf bypass infrastructure at scale under real crisis conditions.

However, even at full utilisation, 65-70% of Hormuz-dependent flows remain structurally constrained, reinforcing the persistent vulnerability to single-node disruption in global energy logistics.

Supply chain fragmentation: the force majeure era

Disruptions from the Strait of Hormuz closure rapidly cascaded far beyond energy markets into global industrial supply chains, triggering widespread force majeure declarations across energy, petrochemicals, LNG shipping, and downstream manufacturing. Kpler vessel tracking and industry reports indicate that the disruption led to widespread congestion across LNG and tanker flows, with significant cargo delays and vessel backlogs forming within the Gulf and at key downstream hubs such as Fujairah, Singapore, and Rotterdam. These delays reflected not only rerouting but also systemic congestion across tanker fleets, port operations, and extended voyage cycles.

Petrochemical markets experienced immediate feedstock volatility, with prices increasing by up to 40% due to inventory tightening and delivery uncertainty. Global fertiliser markets rose in parallel by 15-30% in the initial disruption phase, driven by ammonia and gas feedstock constraints, with sharper spikes in urea during peak stress periods, reinforcing downstream agricultural inflation pressures.

A particularly sensitive transmission channel emerged in aviation. Jet fuel prices more than doubled, reflecting refinery rebalancing between diesel and jet production and tighter Gulf-linked supply logistics. Airlines faced dual pressure from higher fuel costs and operational inefficiencies caused by rerouted flight paths and constrained refuelling hubs. Given aviation’s limited storage capacity and just-in-time fuel procurement model, cost increases were rapidly transmitted into operating costs, increasing the cost per available seat kilometre (CASK), particularly for long-haul carriers dependent on Gulf and Asian hubs.

Manufacturing sectors exposed to energy-intensive inputs saw mid-single- to low-double-digit increases in input costs, depending on energy intensity and supply chain exposure. Disruptions to delivery schedules and feedstock availability further amplified inefficiencies in industrial production cycles across chemicals, metals, and industrial materials.

Overall, the force majeure environment evolved into a multi-sector transmission shock, in which energy disruption propagated simultaneously across petrochemicals, agriculture, aviation, and manufacturing, with stranded cargoes serving as a physical indicator of global supply chain desynchronisation.

The strategic pivot: building resilience

The first 60 days of the Middle East conflict reinforced a structural lesson: systems optimised for efficiency under stable conditions are not inherently resilient under stress. As a result, a strategic pivot toward resilience is underway as a core organising principle of global energy systems.

This is increasingly expressed through geopatriation, as governments and companies seek greater strategic control over energy, technology and industrial assets. This is driving localisation of supply chains and expansion of domestic industrial capacity in critical sectors. Energy infrastructure itself is evolving away from rigid centralised models toward more adaptive architectures, including districted energy systems, battery storage, flexible load management, and AI-managed microgrids that reduce reliance on single points of failure and improve overall system responsiveness under disruption.

These adjustments reflect a system shifting from supply adequacy to transport and insurance scarcity.

Beyond distributed systems, AI has also emerged as an operational resilience tool in constrained infrastructure during routine operations. In hydrocarbon systems, ADNOC’s AI-enabled platforms (ENERGYai and Neuron 5) integrate predictive maintenance, upstream optimisation, production forecasting, and digital twins to reduce unplanned shutdowns, improve asset utilisation, and strengthen operational reliability under routine stress. ADNOC reports that these tools have halved unplanned shutdowns and cut planned maintenance by approximately 20%, illustrating how digital intelligence can improve efficiency and system reliability under normal operating conditions. While there is no evidence that these systems directly mitigated the Strait of Hormuz crisis, their predictive and optimisation capabilities could help preserve operational continuity during disruptions.

Global grid investment is projected to exceed US$600 billion annually by 2030 as countries modernise energy systems to accommodate electrification, digitalisation, and growing resilience requirements.

More fundamentally, the system is moving from reactive crisis management toward proactive system design. Energy security is increasingly defined by the ability to respond dynamically to physical and digital disruptions across interconnected infrastructure, market and information systems.

The 2026 conflict, therefore, has not simply exposed vulnerabilities within the global energy system but accelerated its redesign. Energy security is no longer defined solely by access to resources, but by the capacity to manage disruption across molecules, electrons, and data.

• This Market Outlook report was produced as a part of ADIPEC’s Energy & Geopolitics series. For more information and coverage, visit: https://www.adipec.com/press-media/insights/

The Danish company will provide Hive Hydrogen, a joint venture between the UK’s Hive Energy Ltd. and South Africa’s BuiltAfrica Group, with electrolyzer and ammonia synthesizing equipment, Hive said in a statement. The project, scheduled to start up in 2030 and to produce a million tons of green ammonia a year, is expected to cost more than $5 billion.

South Africa, with ample solar and wind power potential, is vying with competitors including neighboring Namibia to become a leading producer of green hydrogen, which is being touted as a way to decarbonize heavy industry and shipping. It’s generated by using renewable energy to split water molecules, yielding hydrogen, which is then synthesized into a clean-energy source. Hive’s project at the port of Coega is the most advanced of major investment plans using the technology in the country. 

The efficiency of the equipment “means we can reduce capital expenditure on renewables by over €0.5 billion ($583 million),” Giles Redpath, Hive Energy’s chief executive officer, said in the statement. 

Still, critics are skeptical about whether production costs can fall sufficiently for green hydrogen to viably compete with conventional, carbon-intensive fuels like diesel.

The plan is to install an 850-megawatt electrolyzer using Topsoe’s Solid Oxide Electrolyzer Cell technology. Hive expects to produce green ammonia at a sales price at its export port of $650 a ton. It has previously said the plant is intended to serve export markets such as Japan and South Korea. 

Hive said it’s seeking additional investors and lenders for the project.

©2026 Bloomberg L.P.

The Treasury Department’s Office of Foreign Assets Control issued a so-called general license waiver, which now extends to June 17. The release confirmed an earlier Bloomberg report. Treasury Secretary Scott Bessent said in a post on X that the new general license “will help stabilize the physical crude market.”

The decision underscores the pressure President Donald Trump’s administration faces to rein in higher fuel costs and address a global supply crunch caused by the war.

Bessent also said the move will “provide the most vulnerable nations with the ability to temporarily access Russian oil currently stranded at sea.” He added that “we will work with these nations to provide specific licenses as needed.”

The Treasury previously issued two general license waivers covering the same activity. The initial waiver, issued in March, expired after 30 days. Bessent had said it would not be renewed, only to reverse the decision a few days later. The second waiver expired on May 16.

The decision may frustrate European allies, which see sanctions against Moscow as essential to starving it of the revenue it needs to continue the war in Ukraine. 

But Asian nations that import large amounts of crude have lobbied for extended relief from sanctions. 

©2026 Bloomberg L.P.

“India should prioritize control over technology and resources, even if domestic options are 5-10% costlier at initial stage, to avoid the supply chain vulnerabilities currently seen globally,” the state-run company’s Chairman Gurdeep Singh said at a workshop organized by the Power Ministry, according to an official note.

Calls for self-reliance and supply diversification are once again gathering pace in India, as the major importer of oil, gas and fertilizers reels from the energy and commodity disruptions caused by the Iran war. The South Asian nation is among the worst-hit from the squeeze, its pain compounded by a sliding currency, and has taken a series of measures to cushion its economy.

The comments also come after India overhauled its nuclear law to attract investment into a sector that it counts as crucial to meeting its net zero goal by 2070. The country has about 9 gigawatts of nuclear power projects and aims to expand it to 100 gigawatts by 2047, as the new law paves the way for fresh financing from both state-run and private firms. 

Most of India’s existing fleet uses locally designed reactors, while the 2-gigawatt Kudankulam plant in the country’s south that’s powered by Russian reactors is the only one using foreign technology. 

Talks with other foreign suppliers, including Electricite de France and Westinghouse Electric have continued for years without reaching any final agreement to start project construction.

NTPC’s Singh also pointed to hesitation at provincial levels over nuclear safety as another potential hurdle for expansion. 

Companies need states’ consent to acquire land as well as get various local government clearances to start projects. Acceptance of nuclear energy remains inconsistent among the 14 states that NTPC is actively engaging with, necessitating greater public outreach to bring the states on board, the note said, citing Singh.  

©2026 Bloomberg L.P.

The Kosmos docked over the weekend alongside the blacklisted Saam floating storage unit near Murmansk in western Russia before later departing with a deeper draft, a sign that it had taken on a cargo, according to ship-tracking data. Three other former Omani vessels — Merkuriy, Orion and Luch — have also picked up from Saam or are positioning to dock there, ship data shows.

Saam stores fuel produced by the US-sanctioned Arctic LNG 2 plant, which is only accessible to vessels with ice-breaking capability for most of the year. Shipping is the key bottleneck for Russia’s fuel trapped in its northern region, and the extra tankers could allow the nation to expand its exports. 

Kosmos earlier this year switched to the Russian flag, changed its name and shifted ownership to a little-known company. Merkuriy picked up fuel from Saam earlier this month, and is currently in the Atlantic likely heading to Asia, Orion is heading to the project, while Luch is also nearby, ship data shows.

The developments mean that there are now at least 20 tankers being used to ferry LNG from sanctioned Russian projects, according to Bloomberg analysis of tracking data. One of those was attacked in March, and is out of service.

That comes as Moscow tries to capitalize on high LNG demand across Asia as the closure of the Strait of Hormuz chokes off a fifth of global supply and sends fuel prices higher.

The four vessels display hallmarks of dark fleet vessels: they’re older than typical LNG carriers still in service and had recently been transferred to companies not well known in the industry.

The Kosmos changed ownership to Hong Kong-based Mighty Ocean Shipping Ltd. in February, the Luch to Russia-based Abakan LLC in April, and the Orion and Merkuriy to Celtic Maritime & Trading SA in February, according to Equasis. The four ships were previously owned or managed by Oman Ship Management Co.

Mighty Ocean didn’t immediately respond to a request for comment, while contact information for Celtic Maritime & Trading and Abakan weren’t promptly available.

©2026 Bloomberg L.P.

Thermal power rose 3.1% in April from the year before to help meet growing demand while output from wind turbines and nuclear reactors fell. Coal production declined 1% during a month typically associated with seasonal maintenance.

China entered the year with coal stockpiles ample enough to be considered a glut, but the war in Iran is shifting those calculations. The de facto shutdown of the Strait of Hormuz has choked off about a fifth of the world’s liquefied natural gas supply, and China has sharply reduced imports of the fuel given the resulting rise in prices. That’s put more pressure on coal to make up the bulk of thermal power generation.

Domestic benchmark thermal coal prices have risen 23% since the start of the year. Power plants have been instructed to stock up on the fuel ahead of summer demand season, according to the China Coal Transportation and Distribution Association. Still, the rally has lost steam recently as utilities push back against rising costs, and traders said they’re concerned about the possibility of government price caps if levels get too high. 

At the same time, clean power is failing to show the same steady growth that helped China lower fossil fuel power output last year for the first time in a decade. The country simply hasn’t been windy enough this year, and wind power output was 5% lower in April than it was the year before despite record additions of new turbines in the ensuing period. Nuclear generation was also lower as plants were shut for maintenance, while utility-scale solar and hydropower output grew. 

The poor performance of renewables is especially alarming because additions of new turbines and panels are down sharply from last year’s record growth. Curtailment is also on the rise, and grid operators are racing to build power lines and battery storage plants to spread out the clean electricity over more hours of the day. 

©2026 Bloomberg L.P.

Trump signaled his patience was wearing thin, posting on social media Sunday that “For Iran, the Clock is Ticking, and they better get moving, FAST, or there won’t be anything left of them. TIME IS OF THE ESSENCE!”

Iran’s semi-official Fars news agency said the US had set five main conditions for a peace deal, including transferring uranium tied to Iran’s nuclear program to the US, providing no reparations to Tehran and unfreezing less than a quarter of Iran’s frozen assets. Fars cited no source, and the US hasn’t publicly commented on the reported terms.

Meanwhile, the semi-official Mehr news agency said Washington offered “no tangible concessions” while seeking demands it failed to secure during the war, a stance the agency said was leading to an impasse in negotiations. 

A drone attack sparked a fire at a United Arab Emirates nuclear plant, underscoring the fragility of the ceasefire. It was one of three launched from west of the emirate, the UAE defense ministry said in a social media post, adding that the other two were intercepted. 

A global bond rout intensified as the US and Iran remained at loggerheads over a deal to end the conflict. Treasuries declined across the curve, with the 30-year yield rising to the highest in almost three years on investor fears of accelerating inflation. Japan’s 10-year yield jumped 10 basis points on Monday to levels last seen in 1996, while bonds also dropped in Australia and New Zealand.

The latest market turmoil followed sharp declines in stocks and bonds Friday as fears grew that disruptions to shipping through the Strait of Hormuz would keep oil prices elevated. Markets now see a US Federal Reserve interest-rate hike by March as almost certain, underscoring how the Iran war has upended expectations since late February, when investors were pricing in two quarter-point cuts in 2026.

Brent rose 2% to over $111 a barrel, after adding almost 8% last week. Brent has jumped about 50% since the start of the war. 

Make a Deal

Trump met Saturday with Vice President JD Vance, White House envoy Steve Witkoff, Secretary of State Marco Rubio and CIA Director John Ratcliffe to discuss the war, Axios reported. He is expected to meet again with his national security team Tuesday.

“We want to make a deal,” Trump told Axios, adding he’s waiting for an updated Iranian proposal. “They are not where we want them to be. They will have to get there or they will be hit badly, and they don’t want that.”

Since the ceasefire began on April 8, Trump has repeatedly threatened to resume the bombing campaign that began on Feb. 28.

Iranian threats to shipping in the Gulf have brought the region’s energy exports to a near standstill, sending prices soaring and giving Tehran leverage in talks with the US.

The US-Israeli war on Iran has claimed thousands of lives, mainly in the Islamic Republic. Retaliatory attacks by Tehran targeted US allies across the Gulf, including the UAE, which has carried out intermittent strikes on Iran in response, Bloomberg has reported.

In Jerusalem, Israeli Prime Minister Benjamin Netanyahu told his cabinet he would speak with Trump later Sunday following the US president’s visit to China. Security Cabinet member Zev Elkin said Israel was prepared to resume strikes on Iran if Trump chose to do so.

Iranian President Masoud Pezeshkian has said his country is committed to a diplomatic resolution to the conflict. Several energy shipments have managed to clear the Strait of Hormuz in recent weeks, and an Iranian official said authorities were drafting rules to allow passage for some vessels.

The US and China, the world’s two largest economies, sought to emphasize points of agreement on the Middle East conflict when Trump met last week with China’s Xi Jinping, an ally of Iran.

Returning from Asia, Trump told reporters he discussed potentially lifting sanctions on Chinese oil companies that buy Iranian crude with Xi. The Treasury Department has escalated the penalties in recent weeks as the US tries to pressure Tehran on talks, while Beijing has ordered its companies to ignore the sanctions.

Trump said in an interview with Fox News that three Chinese tankers carrying Iranian oil through Hormuz during the week of his visit to Beijing did so because the US allowed it. Iranian state TV had previously said more than 30 ships were allowed passage through the strait since Wednesday night, citing an official from the Islamic Revolutionary Guard Corps’ navy. 

Here’s more related to the war:

• Russian President Vladimir Putin is due to visit China on Tuesday and Wednesday, where he is expected to discuss the Iran war with Xi.
• Sunday’s drone attack in the UAE sparked a fire in an electrical generator outside the inner perimeter of the Barakah power plant but had no impact on radiological safety, Abu Dhabi’s media office said. No injuries were reported.
• Pakistan’s Interior Minister Mohsin Naqvi arrived in Tehran on Saturday and met his Iranian counterpart. The two discussed bilateral relations and the prospects for resuming US-Iran peace negotiations, for which Pakistan has been the main mediator, the semi-official Tasnim news agency reported.
• Israel’s economy slumped in the first quarter of the year when the fallout of the war with Iran imposed security-related shutdowns on businesses for more than a month.
• Iranian Parliament Speaker Mohammad Bagher Ghalibaf was named Iran’s special envoy for China affairs, according to Fars.

(Updates and recasts with global bond market turmoil.)

©2026 Bloomberg L.P.

Refiners are feeling the pinch after the near-halt to shipments through the Strait of Hormuz choked a vital channel for crude. The country processed 54.65 million tons of oil in April, 11% less than March and 5.8% lower than the previous year, the statistics bureau said on Monday. 

State firms cut run rates to below 67% of capacity, a record low in Mysteel Oilchem data going back to 2021, to maintain profitability. The contribution from smaller, privately owned plants stemmed the overall decline after the government told them to keep production at 2025 levels at all costs to stabilize the supply of fuels like gasoline and diesel. 

Higher crude costs and tepid fuel consumption are likely to keep margins and runs under pressure in May, as well. Although China remains the world’s biggest importer, the rapid electrification of its transport sector is weakening oil’s grip on the economy.

On the power side of China’s energy mix, utility-scale electricity generation rose 2.6% year-on-year, due to hotter weather and export-led strength in the factory sector, although the gain lagged the broader 4.1% increase in industrial production. 

The price of coal, China’s mainstay power fuel, has also climbed in recent weeks as domestic conditions tighten and the market responds to disruptions to international gas supplies. Chinese production, however, fell 1% in April after seasonal maintenance affected mines. Other fossil fuel output rose as the country continues to build resilience in oil and gas.

Among metals, aluminum output increased 3.1% to 3.87 million tons, a record on a daily basis, as smelters took advantage of elevated margins and the opportunity to plug a global shortfall of the metal caused by the Iran war. Steel output, more heavily affected by the ongoing property crisis, fell 2.8%.

On the Wire

China’s economy slowed across the board in April with investment resuming declines while retail sales and industrial output fell short of forecasts, underscoring the economy’s vulnerability in the face of a global energy crisis. New home price declines abated for a third month, reinforcing hopes that the multiyear property downturn may finally be nearing a bottom. 

Australia’s government has ordered the biggest shareholders in rare earths firm Northern Minerals Ltd. to sell their stakes, the second such intervention in two years as Canberra seeks to protect the company from China-linked investors on national security grounds.

China has agreed to purchase at least $17 billion of agricultural products from the US annually through 2028, the White House said in a fact sheet detailing President Donald Trump’s two-day summit in China. Grain futures in Chicago jumped.

China signaled that Australian beef imports are nearing a key safeguard threshold, with shipments reaching 80% of an annual quota that caps imports at current tariff rates.

China’s large-scale data centers have joined electricity spot trading as virtual power plants for the first time, marking a shift in how computing demand interacts with the grid.

This Week’s Diary

(All times Beijing)

Monday, May 18

• China home prices, 09:30
• China’s industrial output for April, including steel & aluminum; coal, gas & power generation; and crude oil & refining, 10:00
  • Retail sales, fixed assets investment, property investment, residential sales, jobless rate
• China’s 2nd batch of April trade data
  • Grains, sugar, cotton, palm oil, pork & beef imports
  • Oil products imports & exports breakdown; LNG & pipeline gas imports
  • Bauxite, steel and aluminum imports; rare-earth product, alumina and copper exports
  • Clean-tech exports including EVs, batteries and solar
• Tongwei earnings webcast at 15:00

Tuesday, May 19

• Russian President Vladimir Putin visits China
• China Energy Week in Beijing, day 1

Wednesday, May 20 

• Russian President Vladimir Putin visits China
• China sets monthly Loan Prime Rates, 09:00
• China’s April output data for base metals and oil products
• China’s 3rd batch of April trade data, including country breakdowns for energy and commodities
• CCTD’s weekly online briefing on coal markets, 15:00
• China Green Aluminum Summit in Shanghai, day 1
• China Energy Week in Beijing, day 2

Thursday, May 21

• China Green Aluminum Summit in Shanghai, day 2
• China Energy Week in Beijing, day 3

Friday, May 22

• China’s weekly iron ore port stockpiles
• SHFE’s weekly commodities inventory, ~15:30
• China Energy Week in Beijing, day 4

(Updates with other data from fifth paragraph)

©2026 Bloomberg L.P.

The existing west-east connection has proven crucial to the energy major's oil exports as the Israel/US conflict with Iran has kept the Strait of Hormuz essentially closed to seaborne cargoes.

The Abu Dhabi Crude Oil Pipeline (ADCOP) began operating in 2012, and confirmation of its expansion, aimed at reinforcing the UAE’s role as a reliable global energy supplier, has been confirmed as the country pledges a broader strategy to bolster infrastructure capacity.

Future capacity

The initial 360km Habshan–Fujairah pipeline reportedly cost $4.2 billion.

It has the capacity to transport 1.5-1.8 million barrels of crude oil daily — a substantial share of the UAE’s total oil exports. It has gained greater importance in recent weeks by enabling the continuation of crude exports without the UAE relying entirely on Hormuz, the route for a fifth of annual global oil supplies, through which ~80 tankers pass daily.

Expanding the pipeline will further establish Fujairah as a leading bunkering and oil storage hub on the Gulf of Oman.

Large-scale investments in storage terminals, refining facilities, and maritime services, including ADNOC's investments in crude storage and export infrastructure, have increased Fujairah’s significance in global energy supply chains.

The effectiveness of ADCOP has underscored the need to expand capacity to support future production growth following the UAE’s exit from OPEC on 1 May. The country plans to increase oil production capacity to 5 mbpd by 2027 through continued investment in upstream and export infrastructure. 

Energy security

ADNOC is part of a consortium of global investors committing $30 billion to infrastructure projects across the Gulf and Central Asia, as announced last week.

The group, which includes Abu Dhabi’s sovereign wealth fund L’imad, BlackRock’s Global Infrastructure Partners (GIP), and Singapore’s Temasek, stated it will consider opportunities in sectors such as energy, transport, water, and waste management.

The statement added that the aim would be to accelerate the development and expansion of critical infrastructure assets.

Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and ADNOC Managing Director and Group Chief Executive, said the initiative targets “disciplined investments” across a diversified pipeline of “high-quality opportunities”.

He continued: “ADNOC is focused on strengthening long-term energy security, supporting economic resilience, and enabling sustainable value creation.”

Dr Al Jaber added on social media platform X that the strategic partnership “will advance the infrastructure that supports sustainable economic development in high-growth markets across Asia”.

The UAE and Jordan recently signed an agreement to build and operate a $2.3 billion railway linking Jordan’s mining areas to Aqaba port. The 360km project is the first step in building a Jordanian national rail network connecting Aqaba with neighbouring Arab countries, including ports in Syria and the Mediterranean.

Disciplined investments

The consortium’s announcement comes as many governments around the world are stepping up domestic actions amid an historic energy crisis, as oil and LNG from Gulf suppliers remain largely trapped.

The International Energy Agency (IEA) estimates that 76 nations have now implemented emergency measures, up from 55 at the end of March, as oil stockpiles decline due to the conflict.

Analysts and commodity traders have warned that oil prices could jump again sharply unless more fuel blockaded in the Gulf can be exported. This, along with supply shortages, could prompt greater fuel rationing and cripple global growth.

Paul Diggle, Chief Economist at fund manager Aberdeen, told the Financial Times that his company is examining a scenario in which Brent crude rockets to $180 a barrel, causing surging inflation and recessions in European and Asian countries.

Hormuz must reopen

Dr Al Jaber said Iran’s blockade of the Strait amounts to an “arithmetic of extortion” and demanded unconditional restoration of free navigation as the cumulative toll on global oil supply crosses one billion barrels.

Posting on X, he said: “Every day the Strait is held hostage, the costs go up — for families, farms, factories and economies around the world.

“The world is already 1 billion barrels short because of the closure of Hormuz. That is the arithmetic of extortion.”

Dr Al Jaber’s post added: “Return freedom of navigation. No conditions. No delay.”

The IEA estimated global oil consumption in Q2 to be about 6 mbpd above production levels. That is 2-3 mbpd less than the shortfall suggested by some analysts, and a massive swing from the surplus originally forecast before the Middle East conflict.

ADNOC Gas said in early May that it aims to restore 80% of processing capacity at its Habshan complex by the end of this year.

As one of the world's largest gas processing sites, the complex sustained significant damage during Iran's attacks on the UAE in April.