Crude Rises on Tensions; Golden Pass Timeline Firms

Crude moves higher as tensions escalate in the Strait of Hormuz

• The WTI prompt-month contract rose $1.53 to $103.47 on Monday morning (7:30 AM CT)
• Futures jumped following unconfirmed Iranian media reports that two missiles struck a US patrol vessel after it allegedly ignored warnings
• • US officials disputed those claims, with a senior official stating that no American naval asset had been hit
• Tensions in the Strait of Hormuz appear to be rising after President Trump signaled the US would assist vessels attempting to exit the region
• Under what he described as Project Freedom, Trump said Sunday the US would guide ships stranded in the Persian Gulf “safely out of these restricted waterways,” though details remain limited
• The head of Iran’s parliamentary National Security Commission warned that US involvement in Hormuz would violate the already fragile ceasefire established last month
• Semi-official Tasnim News reported Monday that Tehran has “redefined the control zone” in the strait, effectively expanding the area under its authority to regulate maritime traffic

OPEC+ agrees to quota hike following UAE exit

• OPEC+ approved a modest increase to June production quotas, adding 188 MBbl/d
• As with May’s adjustment, the increase is largely symbolic, as Middle Eastern producers remain constrained by restricted flows through the Strait of Hormuz
• While the UAE’s exit from OPEC does not immediately alter supply, it removes quota limits, allowing the country to accelerate production once transit through the strait normalizes

Natural gas stays flat over weekend

• Natural gas is up 0.2c to $2.782/MMBtu (As of 07:30 AM CDT)
• After a weekend period of L48 average temperatures being back below 60°F, temperatures are back at the 10 year average now Criterion
• • Rescom demand plunged since Friday over 6 Bcf/d with the temperatures warming back up
  • The forecast change also looks bearish, however cooling demand is expected to start May 14 and pick up through May 18 (Criterion)
• Golden Pass Train 2 and 3 received more firm dates (Criterion)
• • Train 2 mechanical completion is now targeted for Q4 2026, and Train 3 mechanical completion is now targeted for Q2 2027
  • Trains 2 and 3 are expected to add roughly 1.7 Bcf/d of feedgas demand once fully operational
• Rio Grande LNG ahead of schedule
• • NextDecade now expects feedgas deliveries to begin in 2H26 and first LNG in 1H27
  • This is about six months ahead of schedule
• PJM received over 800 project applications in interconnection process (S&P)
• • Developers proposed a total of 220 GW, led by natural gas-fired resources and energy storage
  • • Roughly 170 GW of the added nameplate capacity is related to natural gas and storage