Oil prices whipsawed after reports of a possible U.S.-Iran framework deal briefly sent Brent plunging, only for fresh U.S. strikes on Iran to push crude back toward $100.

Probable Super Niño Adds Insult to Injury for LNG Buyers

- The arrival of a powerful El Niño this year, potentially even a 'Super Niño’ with sea surface temperature anomalies exceeding +2°C, could roil commodity markets simultaneously to ongoing shocks from the US-Iran war.

- Hotter weather will boost cooling demand and lift overall consumption of natural gas - signs of this happening can be already seen from China finally catching up with its year-ago pace of LNG imports and generally buying more.

- LNG flows have already started to shift towards Asia as the region's JKM benchmark trends above $18 per MMBtu, whilst Europe's delivered LNG prices are as low as $16.4 per MMBtu.

- The arbitrage to Europe doesn't even work for US LNG exporters, despite the relative geographic proximity, suggesting European prices need to climb higher to attract any seller interest.

- A severe El Niño usually suppresses rainfall over India, weakening its sowing season, whilst bringing extreme heat and droughts to northern China and Japan (which saw a spike for summer power prices in recent weeks).

Market Movers

- UK oil major BP (NYSE:BP) has removed Albert Manifold as its Chairman of Board with immediate effect and appointed Ian Tyler as interim, citing compliance with governance standards.

- Colombia’s national oil company Ecopetrol (NYSE:EC) has launched a tender offer to acquire control of Brazilian offshore producer Brava Energia with a 51% stake, having already purchased 25% earlier this year in April.

- Italian oil major ENI (BIT:ENI) has reached a final investment decision on Phase 3 of its Baleine offshore development in Cote d’Ivoire, seeking to increase production from 60,000 b/d to 150,000 b/d.

- Japan’s INPEX (TYO:1605), the majority project owner of Australian liquefied gas Ichthys LNG, said it managed to avert industrial action planned for Wednesday, with wage negotiations continuing.

Tuesday, May 26, 2026

In a compelling showcase of how unpredictable foreign policy has become under US President Trump, oil prices fell 6% on Monday amid media speculation that a framework agreement is in place between the US and Iran. Hopes for an imminent deal were immediately quashed by US strikes on southern Iran, which the US Central Command called 'defensive', sending ICE Brent futures back to $100 per barrel.

Tit-for-Tat Strikes Sap Ceasefire Hopes. An explosion on a tanker caused an oil spill of bunker fuel in the Gulf of Oman today, as reported by the UK Maritime Trade Operations, with the incident reportedly happening 60 nautical miles east of Muscat, close to where the U.S. operates its naval blockade.

Rubio Wants Hormuz Open Immediately. US Secretary of State Marco Rubio claimed that the US were prepared to enter into serious talks with Iran, saying that the ‘Strait of Hormuz has to be open one way or another’, making it a key US negotiation point along with a 60-day ceasefire extension.

Tehran Needs 30 Days to Open Hormuz. According to the preliminary agreement between the US and Iran, the Strait of Hormuz would reopen 30 days after an official diplomatic deal is reached, with Tehran committing to clearing all naval mines from the Strait to ensure freedom of navigation.

Mining Accident Sends China Coal Soaring. A gas explosion at the Liashenyu coal mine in the northern province of Shaanxi, killing 82 people, has prompted widespread shutdowns and sent Chinese coking coal prices to their highest since 2024, jumping to ¥1,275 per tonne ($188/mt).

Ukraine Continues Russia Drone Strikes. Ukraine hit Russia’s largest Black Sea port of Novorossiysk and the nearby Grushovaya oil depot on May 23, sparking a fire in the industrial zone and prompting the port authorities to temporarily suspend oil loadings after averaging 450,000 b/d in 2026 to date.

Egypt Seeks to Clear Arrears by June. Having reduced its arrears to oil and gas companies to some $440 million from a peak $6.1 billion, the government of Egypt has pledged to clear all debts owed to upstream investors by June 10 to boost the investment appeal of the North African nation.

Qatar Won’t Be Back Until August. QatarEnergy has notified its European customers that it would cancel additional LNG cargoes, extending its force majeure from early July until mid-August, the loss of physical supply could be partly mitigated by volumes from its US-based Golden Pass LNG.

Saudi Aramco Relinquishes Key Malaysia Stake. Saudi state oil firm Saudi Aramco (TADAWUL:2222) has announced that it would transfer its 50% stake in the Pengerang Refining Company and its petrochemical plant to Malaysia’s state oil firm Petronas, ending its 8-year $7 billion venture there.

European Majors Give Up on German Wind. According to media reports, both France’s TotalEnergies (NYSE:TTE) and the UK’s BP (NYSE:BP) are exploring options to relinquish or sell 3 GW of offshore wind concessions in Germany, citing worsening economics and grid connection delays.

Russia Casts a Shadow on Belgian Mining. Russian security services claim to have discovered several magnetic mines attached to the hull of the Arrhenius LPG carrier as it was arriving to the Baltic Sea port of Ust-Luga, presumably after a forced two-day anchorage off the port of Antwerp.

Iran Crisis Nods Bangladesh to Sweeten Terms. Seeking to reduce the impact of the Middle East conflict on its economy, Bangladesh launched an offshore bidding round, offering 26 hydrocarbon blocks and improving terms by extending exploration periods and lowering regulatory contributions.

Pakistan Eyes Strategic Petroleum Storage. Pakistan intends to boost domestic storage for crude oil and refined products after the US-Iran war exposed the country’s supply shortages, sharing the proposed framework with national oil firms Saudi Aramco, ADNOC, QatarEnergy and PetroChina.

Aluminium Keeps on Climbing Higher. The benchmark three-month LME aluminium contract has risen to $3,707 per metric tonne this week, the highest since March 2022, prompted by an earlier surge in Chinese futures contracts on the back of bauxite supply concerns from Guinea.

By Tom Kool for Oilprice.com

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