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Wood Mackenzie Warns Oil Could Hit $200

Wood Mackenzie highlighted in a  new report from the company, “a prolonged closure of the Strait of Hormuz poses the single greatest threat to global energy markets in decades”. Oil prices could reach $200 per barrel in a worst case scenario as more than 11 million barrels per day of Gulf crude and condensate supply remains curtailed, the statement noted, highlighting that Wood Mackenzie’s report projected three “distinct scenarios – quick peace, summer settlement, and extended disruption”. A summer settlement scenario assumes the ceasefire holds but negotiations extend into late summer, with the Strait remaining largely closed until September, the statement noted. “Oil and LNG supply shortages persist through Q3 2026, driving a shallow global recession in H2 2026,” Wood Mackenzie said. “Global GDP growth falls below two percent in 2026, resulting in modest yet permanent economic scarring compared to the pre-war baseline,” it added. The statement warned that, “under the most severe scenario [extended disruption] the Strait remains largely closed through the end of 2026, with recurring tensions triggering periods of renewed conflict and sustained supply disruption”. In the statement, Wood Mackenzie said its analysis indicates that Brent crude prices could approach $200 per barrel by end-2026, despite global oil demand falling by six million barrels per day year on year in the second half of the year, and that diesel and jet fuel prices could rise towards $300 per barrel in major refining centers by the end of the year. “More than 11 million barrels per day of crude and condensate production remains shut in and global oil inventories continue to decline,” Wood Mackenzie projected in the statement under this scenario. Peter Martin, head of economics at Wood Mackenzie, highlighted in the statement that the Strait of Hormuz “is the most critical chokepoint in global energy markets” and warned that “a prolonged closure would become far more than an energy crisis”. “The longer disruption persists, the greater the impact on energy prices, industrial activity, trade flows and global economic growth,” he added. “The consequences of an extended disruption would extend well beyond energy markets. It would test the resilience of global trade, industrial supply chains and economic growth simultaneously, reinforcing the urgency of achieving a resolution,” he concluded. Wood Mackenzie went on to warn in its statement that a prolonged conflict could accelerate structural changes across global energy markets. “Even after the Strait reopens, intermittent disruption could continue and reinforce the geopolitical risk attached to both oil and LNG trade flows, creating a more volatile pricing environment and increasing pressure on import-dependent economies to strengthen energy security,” it said.

Zaye Capital Markets In a market analysis Naeem Aslam, Chief Investment Officer at Zaye Capital Markets, said crude “is being pulled between two major forces – geopolitical risk and demand uncertainty”. “Prices came under pressure when markets priced lower immediate escalation risk in the Middle East, but the rebound shows traders are not ready to remove the supply-risk premium while the Strait of Hormuz remains central to global energy flows,” he added. Aslam noted in the analysis that U.S. President Donald Trump’s comments are directly influencing the oil ecosystem and said yesterday’s economic data “added another layer to oil sentiment”. “U.S. commercial crude inventories fell by 7.86 million barrels, the Strategic Petroleum Reserve dropped by 9.9 million barrels, and total crude inventories fell by around 17.8 million barrels to 819.2 million barrels, the lowest level in 11 months,” he highlighted. “Refinery utilization stood near 91.6 percent, while crude exports reached around 5.6 million barrels per day, showing physical demand remains active,” he added. “At Zaye Capital Markets, we believe analysts should watch PMI new orders, jobless claims, refinery runs, OPEC supply signals, IEA demand revisions, crude exports, inventory draws and Strait of Hormuz headlines, because oil’s next move depends on whether markets fear tighter supply, weaker demand or renewed inflation more,” Aslam went on to state.

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Rubio: Iran progress shouldn’t be exaggerated

United States Secretary of State Marco Rubio remarked on Friday that there has been “slight” progress in his country’s negotiations with Iran, but stressed that he does not want to “exaggerate” it. Speaking to the press ahead of the meeting of the North Atlantic Treaty Organization’s (NATO) foreign ministers in Helsingborg, Rubio noted that the talks will need to address the issue of Iran’s enriched uranium stockpiles. He also urged the international community not to accept Iran’s decision to charge fees for the passage through the Strait of Hormuz. Moreover, Rubio reiterated that US President Donald Trump is “disappointed” in some of the NATO allies for not stepping up and joining the US and Israel’s campaign against Iran.

NN: This is going nowhere fast!

 

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US raises pressure on Cuba with indictment of former leader as island’s president condemns charges

 

MIAMI (AP) — Federal prosecutors on Wednesday announced criminal charges against former Cuban President Raúl Castro in the 1996 downing of civilian planes flown by Miami-based exiles as the Trump administration escalated pressure on the island’s socialist government. The indictment accuses Castro of ordering the shootdown of two small planes operated by the exile group Brothers to the Rescue. Castro, who turns 95 next month, was Cuba’s defense minister at the time. The charges, which were secretly filed by a grand jury in April, included murder and destruction of an airplane. Five Cuban military pilots were also charged. “For nearly 30 years, the families of four murdered Americans have waited for justice,” acting Attorney General Todd Blanche said in Miami at a ceremony coinciding with Cuban independence day to honor those killed. “They were unarmed civilians and were flying humanitarian missions for the rescue and protection of people fleeing oppression across the Florida straits.” Asked to what lengths American authorities would go to bring Castro to face charges in the U.S., Blanche said: “There was a warrant issued for his arrest. So we expect that he will show up here, by his own will or by another way.” Asked what will happen next for Cuba, President Donald Trump said, “We’re going to see.” He added that the U.S. is ready to provide humanitarian assistance to a “failing nation.” The charges pose a real threat, observers said, following the capture by U.S. forces in January of former Venezuelan President Nicolás Maduro to face drug charges in New York. “He’s going to have to keep his head pretty low from now on,” said Peter Kornbluh, a specialist on the U.S.-Cuba relationship at the National Security Archive at George Washington University Trump has been threatening military action in Cuba ever since U.S. forces captured Maduro, the Cuban government’s longtime patron. After ousting the Venezuelan leader, the White House ordered a blockade that choked off fuel shipments to Cuba, leading to severe blackouts, food shortages and an economic collapse across the island. Since Maduro’s capture, Trump has ratcheted up talk of regime change in Cuba after pledging earlier this year to conduct a “friendly takeover” of the country if its leadership did not open its economy to American investment and kick out U.S. adversaries While Raul formally retired in 2021 as head of the Cuban Communist Party, he is widely believed to wield power behind the scenes, underscored by the prominence of his grandson, Raúl Guillermo Rodríguez Castro, who previously met secretly with Rubio. In 1995, planes flown by members of Brothers to the Rescue buzzed over Havana dropping leaflets urging Cubans to rise up against the Castro government. After Cuban protests, the Federal Aviation Administration also opened an investigation and met with the group’s leaders to urge them to ground the flights, according to declassified government records obtained by the National Security Archive. But those calls went unheeded and on Feb. 24, 1996, missiles fired by Russian-made MiG-29 fighter jets downed two unarmed civilian Cessna planes a short distance north of Havana just beyond Cuba’s airspace. All four men aboard were killed. A third plane, carrying the group’s leader, narrowly escaped. Guy Lewis, who was a federal prosecutor in Miami in the 1990s, first uncovered evidence linking senior Cuban military officials to cocaine trafficking by Colombia’s Medellin cartel. Following the shootdown, the investigation expanded, and prosecutors pursued charges against Raúl Castro for leading a vast racketeering conspiracy by Cuba’s armed forces. In the end, only the head of the Cuban air force and two of the MiG pilots involved in the downing of the planes were indicted but have never been apprehended.

A fourth individual was convicted of leading a Miami-based spy ring called Operation Scorpion that collected intelligence about the flights. He was later swapped for a U.S. intelligence asset imprisoned in Cuba as part of President Barack Obama’s outreach to Cuba.

The shootdown led the U.S. to harden its position against Cuba, even though the Cold War had ended and the Castros’ support for revolution across Latin America was a fading memory. But Castro himself was spared as the Clinton administration raised concerns about such a high-profile indictment.

NN: Pictured below is one of the Skymaster P338  I suppled to the Brothers to the Rescue. After several meetings the Skymaster a unarmed spotter plane used in Viet Nam was selected. The mission was to save life by spotting people in the Florida straights trying to make it to America and freedom. People set out in anything that could float like 55 gallon drums lashed together to make crude rafts, The spotter  planes would find them and direct private rescue boats to rescue them.

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StanChart Says Record SPR Withdrawals Are Tightening U.S. Oil Buffers

  • The IEA and its 32 member countries launched a record 400-million-barrel emergency oil release after Iran’s Strait of Hormuz blockade.
  • The U.S. is contributing 172 million barrels, and SPR inventories are now falling at a record pace.
  • Standard Chartered warns the rapid SPR drawdowns and other emergency measures are only temporary fixes, with physical oil market tightness likely to return once reserve releases end.

Back in March, the 32 member countries of the International Energy Agency (IEA) unanimously pledged a record-breaking release of 400 million barrels of crude oil from their Strategic Petroleum Reserves (SPR) shortly after Iran’s blockade of the Strait of Hormuz triggered oil price spikes, more than double the 182.7 million barrels released during the 2022 response to the Ukraine war. As usual, the United States shouldered the lion’s share of the release, committing to 172 million barrels. For the first batch, the Department of Energy (DOE) awarded contracts to eight companies for the sale of 45.2 million barrels from sites in Texas and Louisiana on March 20. And now commodity analysts at Standard Chartered have reported that the pace of withdrawals from the U.S. Strategic Petroleum Reserve has accelerated sharply, with the latest data revealing the largest weekly decline on record.

According to StanChart, U.S. SPR inventories fell by 9.9 million barrels (mb) in the week ended 15 May, following a decline of 8.6 mb the previous week, taking total SPR volumes down to 374 mb and quickly approaching operational stress limits. The physical infrastructure of the SPR limits withdrawal capacity to a maximum rate of 4.4 mb/d, while the operational minimum is a statutory limit of 150 mb.

The analysts note that the current programme is being executed much more rapidly and alongside a larger global emergency response. However, StanChart says that many of the numerous mechanisms implemented to reduce the near-term supply/demand imbalance are only temporarily viable, implying that near-term dampening of physical oil prices is only temporary with a resumption of the imbalance likely to pull financial contracts higher. Previously, StanChart predicted that the recent dramatic collapse in physical crude oil premiums may be short-lived, with prompt physical barrels likely to regain large premiums. Indeed, StanChart has reported that w/w price escalations in Dated Brent (the primary physical benchmark for crude oil in the North Sea) outpaced the front-month Brent futures contract this week, rising by $9.52/bbl (9.12%) to a weekly settlement high. According to the analysts, physical oil cargo premiums have collapsed–with some grades dropping 90%–due to a combination of intentional buyer restraint, increased reliance on inventory, and increased supplies from non-disrupted regions.As the conflict escalated and Iran blocked the Strait of Hormuz, oil buyers scrambled to secure immediate, non-Middle Eastern “prompt barrels”, driving up the spot price premiums for available cargoes.

 North Sea Forties crude spiked to nearly $150 a barrel by mid-April, exceeding the 2008 peak.

Many commodity experts predicted that oil futures would eventually trade up to the physical; however, we have lately been seeing just the opposite, with the physical trading down to the futures. Whereas physical prices still indicate market tightness, they have recently returned to a more normal range. The sharp fall in the price of physical oil can be chalked up to buyers remaining hopeful the Iran conflict would be resolved rapidly, at least in terms of the Strait of Hormuz blockades, and were dissuaded from purchasing cargoes at extremely elevated prices. High volatility and regular price swings in excess of $10/bbl in a day (front-month Brent traded in a $35/bbl intraday range on 9 March ) have increased the risk of a VaR shock i.e., an acute increase in Value at Risk. Deferring purchases in the near term has also allowed buyers to benefit from strategic reserve and inventory drawdowns, reduced refinery run rates (and adjustments to maintenance schedules), and alternative supply sources, which have cushioned oil price spikes. StanChart says physical prices are likely to rise again once purchases can no longer be deferred, refinery runs pick up, and strategic reserve releases are complete, unless a deal to end the conflict can be agreed.

This will likely eventually pull futures prices up towards elevated physical benchmarks.
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Oil up 3% as Khamenei orders uranium to stay in Iran

Crude oil prices rebounded from yesterday’s losses on Thursday, with West Texas Intermediate (WTI) jumping by more than 3% as hopes for the United States and Iran reaching a peace deal started to fade, following the latest reports claiming that Iranian Supreme Leader Ayatollah Mojtaba Khamenei issued a directive ordering Iran’s uranium to stay in the country. The Iranian leader’s order contradicted Israeli officials, who claimed that Iran’s highly enriched uranium inventories will be transferred out of Iran in order to reach any peace deal, according to Reuters. Meanwhile, Iran is reportedly restoring its military capacity at a faster pace than expected, stoking fears of the military conflict restarting in the Middle East. WTI for deliveries in July surged by 3.01% to go for $101.22 per barrel at 6:53 am ET. Meanwhile, Brent for the same month’s settlements climbed by 2.42% and went for $107.69 per barrel at 6:53 am ET.

NN: Welcome to the chop shop. Despite all the blow and go the world is short 10 million barrels per day. Spot oil for delivery is over $150 a barrel. And paper barrels are $103.
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Oil tumbles 6% as US-Iran peace deal hopes grow

The prices of oil tumbled on Wednesday, deepening even more after midday as reports surfaced that Pakistan may announce a final US-Iran draft agreement within hours.

Investors reacted to the news by moving out of bonds and into equities, sending Treasury yields sharply lower and US stocks surging 520 points higher as the prospect of war faded.

West Texas Intermediate (WTI) for July’s settlements dropped by 5.34% at 12:20 pm ET to sell for $98.81 per barrel. Meanwhile, Brent for the same month’s deliveries plunged by 6.18% to go for $105.17 per barrel.

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Final Iran draft deal may be announced soon

Pakistan is expected to announce the final draft of a peace agreement between the United States and Iran soon, Saudi Arabia’s state news agency Al-Hadath reported on Wednesday, citing unnamed sources. According to the report, intensive work is underway to finalize the text of an agreement between Washington and Tehran. Pakistan’s Chief of Army Staff, Asim Munir, may travel to Tehran tomorrow to announce that the two parties have agreed on a final draft of the deal, the outlet said. In the event that he does not travel to Iran, the final draft agreement could be announced within a few hours, the sources noted.The outlet added that the next round of talks between the US and Iran is expected to take place after the Hajj season, probably in early June.

NN: Here we go again. Another round of endless negotiations. But keep your eye on the money ball. No oil is moving out of the straights. 
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EIA: US crude oil inventories down by 7.9M barrels

 

 

 

 

 

Summary  of Weekly Petroleum Data for the week ending May 15, 2026

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 7.9 million barrels from the previous week. At 445.0 million barrels, U.S. crude oil inventories are about 2% below the five-year average for this time of year. U.S. crude oil refinery inputs averaged 16.3 million barrelper day during the week ending May 15, 2026, which was 80 thousand barrels per day less than the previous week’s average. Refineries operated at 91.6% of their operable capacity last week. Gasoline production decreased last week, averaging 9.3 million barrels per day. Distillate fuel production increased, averaging 5.0 million barrels per day. U.S. crude oil imports averaged 6.0 million barrels per day last week, increased by 116 thousand barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 5.8 million barrels per day, 1.5% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 547 thousand barrels per day, and distillate fuel imports averaged 173 thousand barrels per day. Total motor gasoline inventories decreased by 1.5 million barrels from last week and are 5% below the five-year average for this time of year. Both finished gasoline and blending component inventories decreased last week. Distillate fuel inventories increased by 0.4 million barrels last week and are about 9% below the five-year average for this time of year. Propane/propylene inventories increased by 0.4 million barrels from last week and are 51% above the five-year average for this time of year. Total commercial petroleum inventories decreased by 9.0 million barrels last week.
Total products supplied over the last four-week period averaged 20.2 million barrels per day, up by 3.1% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.9 million barrels per day, up by 0.5% from the same period last year. Distillate fuel product supplied averaged 3.6 million barrels per day over the past four weeks, up by 1.4% from the same period last year.

NN: The numbers speak for themselves. Inventories are crashing.
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Trump Says Holding Off on New Iran Strikes After Gulf Appeal

President Donald Trump said he called off a strike on Iran planned for Tuesday after an appeal by the leaders of Persian Gulf allies, who called for more time to pursue a diplomatic resolution. “I put it off for a little while, hopefully maybe forever, but possibly for a little while, because we’ve had very big discussions with Iran, and we’ll see what they amount to,” Trump said at a White House event on Monday evening, hours after his announcement in a social media post. “I was asked by Saudi Arabia, Qatar, UAE, and some others if we could put it off for two or three days, a short period of time, because they think that they are getting very close to making a deal,” Trump added. “If we can do that, where there’s no nuclear weapon going into the hands of Iran, I think, and if they’re satisfied, we will be probably satisfied also.” The president has repeatedly threatened renewed military action against Iran without following through. There was no immediate confirmation from Tehran of renewed talks. Trump said the US was prepared to attack if an acceptable deal wasn’t reached but didn’t set a deadline. His comments were the latest indication of the bind he’s in with the war, where Tehran has taken a hard line in the absence of credible threats of renewed attacks by the US. Yet escalation would bring further increases in oil prices, something the White House has so far been unwilling to risk. Oil and stocks whipsawed as traders parsed mixed signals about prospects for an accord to end the war and revive energy flows through the key Strait of Hormuz. West Texas Intermediate crude fell 1.4% while the S&P 500 nearly wiped out its losses in a choppy session after Trump’s remarks. With crucial oil exports from the Persian Gulf all but cut off amid the war, Trump has been pushing Iran to make a deal or face a resumption of strikes.

NN:  What the hell is going on? Trump TACO’ed again.  Iran is pushing things to far. Talk about playing a losing hand.
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US said to view Iran’s new proposal as ‘insufficient’

The United States has received Iran’s latest proposal for a deal to resolve the conflict, but the White House sees the new offer as “insufficient” for a peace agreement, Axios reported on Monday, citing a senior US official. According to the report, US President Donald Trump is considering resuming the military operation in Iran because Tehran rejected many of his demands, including the one about making meaningful commitments related to the Iranian nuclear program. The official cited in the report also claimed that the US may continue the negotiations with Iran “through bombs” if Tehran does not change its stance. The US president is reportedly set to hold a meeting with his top national security team in the Situation Room tomorrow to discuss military options, while Israeli Prime Minister Benjamin Netanyahu is expected to hold a security meeting later today. The two leaders also discussed the war in Iran in a call yesterday.