Crude Rises as Gulf Countries Push Back on Iran's Authority

Crude rises as Gulf countries push back on Iran’s Hormuz authority

The WTI prompt-month contract rose $0.18 to $96.53/Bbl on Friday morning (7:30 AM CT)
In a letter distributed by the International Maritime Organization, five Middle Eastern countries formally rejected Iran’s proposed Persian Gulf Authority, which would seek greater control over traffic through the Strait of Hormuz
The UAE, Qatar, and Saudi Arabia are also urging President Trump to end the war with Iran amid concerns the conflict could trigger further economic disruption across the region
On Friday, Secretary of State Marco Rubio said there was “slight progress” in negotiations, though comments from Iran’s Supreme Leader regarding Tehran’s uranium stockpile, along with disputes over control of Hormuz, continue to cloud prospects for a breakthrough
Goldman Sachs said the conflict has contributed to visible inventory draws of 8.7 MMBbl/d so far in May, marking a record pace of depletion
- Faith Birol said the International Energy Agency is prepared to release additional barrels if necessary

Natural gas falls as weather forecast looks mild into early June

Natural gas is down -3.8c to $2.98/MMBtu. (As of 07:30 AM CDT)

Temperatures are forecasted to run 1-2°F below average in the next two weeks

Production rebounded slightly this morning, up around 600 MMcf/d in the L48

The mild production rebound is offset by Canadian imports, which fell around 600 MMcf/d (Criterion)

Alberta is under high-extreme threat of wildfire this summer, which could shut in dry gas production (AccuWeather)

This could potentially impact Canadian imports, acting as a bullish catalyst for prices

National Weather Service is calling for a below-normal Hurricane season this year

The NWS labels a 55% chance of the 2026 Hurricane season to be below normal
- LNG Growth amplifies the bearish risk posed by Hurricanes as the gulf becomes an increasing demand center for natural gas