Crude advances after US dismisses Iran’s latest peace framework
The WTI prompt-month contract gained $1.65 to $97.07/Bbl on Monday morning (7:30 AM CT)
Crude futures moved higher after President Trump rejected Iran’s latest response to US peace terms, extending uncertainty around any meaningful reopening of the Strait of Hormuz
Market concerns are increasingly shifting toward the possibility of a renewed military escalation, with some analysts discussing a limited US-led air and missile campaign targeting Iranian military infrastructure, energy facilities, and export assets while maintaining maritime restrictions in the region
Potential military action involving Kharg Island could further reduce Iranian crude exports, while possible Houthi attacks near Bab el-Mandeb or Iranian strikes targeting Saudi Arabia’s East-West pipeline could pressure alternative export routes that have partially offset lost Hormuz flows
Analysts are increasingly describing the US-Iran conflict as a prolonged geopolitical standoff characterized by intermittent periods of heavier fighting layered on top of sustained low-level disruptions, with the Strait expected to remain restricted or only partially operational for an extended period
A Goldman Sachs market survey showed most respondents expect disruptions to Strait of Hormuz transit to continue beyond the end of June
The Cal 2027 strip is nearing $75/Bbl as the market increasingly prices in a longer-lasting disruption scenario, aligning with comments from Aramco’s CEO that prolonged constraints on Strait of Hormuz transit could postpone a broader rebalancing of global oil markets until 2027
Natural gas moves up as L48 approaches Summer
Natural gas is up 6.8c to $2.825/MMBtu (As of 07:30 AM CDT)
The L48 population weighted average temperatures over the next 14 days gained a combined 11.5°F
The temperature gains were primarily in the 6-10 day range, where we’re expected to average over 70°F for the first time over the weekend (Criterion)
Bossier Formation triples in estimated recoverable natural gas resources (NGI)
USGS assessed the Bossier for the first time since 2016, and the new assessment found 343.5 Tcf in the Bossier
This is much higher than the last assessment, which came in at 108.6 Tcf
Targa expects increased Permian Basin gas volumes after shut-ins end (S&P)
200-400 MMcf/d of Permian gas remains shut in due to weak pricing, but with Blackcomb and Hugh Brinson coming on later this year, targa expects a material recovery
Targa continues expanding Permian infrastructure, signaling confidence in the long-term growth of the basin despite current gas takeaway constraints
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