2026.05.01

Oil Pulls Back from $126 Peak Amid Extreme Volatility

Oil prices retreated after hitting a four-year high, with Brent crude peaking at $126.41 before settling at $114.01 (-3.41%), while WTI closed at $105.07 after touching $110.93. Despite the pullback, prices have surged sharply since the Iran war began, with Brent roughly doubling and WTI up about 90%. The disruption is driven by the near-closure of the Strait of Hormuz, where traffic has dropped to just ~7 ships daily versus 125–140 normally, choking about 20% of global oil and LNG flows. Ongoing geopolitical tensions and market volatility continue to fuel uncertainty, with little sign of a near-term resolution.

Only Iran-Linked Ships Navigate Blockaded Waterway

Traffic through the Strait of Hormuz has dropped to near zero, with only a few Iran-linked vessels still moving amid overlapping US and Iranian blockades. On Thursday, just one Iran-linked fuel tanker entered the Persian Gulf, while no outbound transits were recorded, following minimal movement of only 3 outbound and 2 inbound ships the previous day. Widespread signal jamming and ships turning off tracking systems further obscure real traffic levels, making the true scale of the blockade difficult to verify.

Rare Pakistani Fuel Tanker Exits Blockaded Hormuz

A Pakistani tanker, the Khairpur, carrying about 511,000 barrels of diesel loaded in Kuwait, attempted a rare exit from the heavily disrupted Strait of Hormuz. The vessel navigated the northern route near Qeshm and Larak islands after multiple failed attempts, heading toward Karachi with arrival expected on May 4. The passage comes as shipping through the strait has collapsed to only a handful of vessels due to the ongoing Iran war and widespread navigational disruptions.

Trump Courts Iraq PM-Designate

Donald Trump invited Iraq’s prime minister–designate Ali al-Zaidi to Washington to strengthen bilateral ties and reduce Iranian influence in the region. The call comes as Iraq, OPEC’s second-largest oil producer, forms a new government amid ongoing instability linked to the Iran war. Trump emphasized cooperation for “stability and prosperity,” while warning against leadership figures with close ties to Iran, such as former PM Nouri al-Maliki. The nominee has one month to form a government approved by Iraq’s parliament under the country’s power-sharing system.

US Offers 92.5M Barrels from SPR as Oil Prices Top $126

The U.S. plans to loan up to 92.5 million barrels of crude from its Strategic Petroleum Reserve, part of a broader 172 million barrel commitment within a 400 million barrel global release coordinated with the International Energy Agency. Despite earlier offers of 126 million barrels, companies borrowed less than 80 million (63%), highlighting limited uptake. Oil prices remain elevated, briefly exceeding $126 per barrel, while U.S. gasoline reached $4.30 per gallon, reflecting ongoing impacts from the Iran war. The reserve currently holds about 398 million barrels, with loans to be repaid with up to a 24% premium by 2029.

Trump Revives Keystone-Style Pipeline Plan to Boost Canada–US Oil Flow

Donald Trump approved a permit for the Bridger Pipeline expansion, enabling transport of up to 550,000 barrels per day of Canadian crude to the U.S. via Montana and Wyoming. The project mirrors the canceled Keystone XL pipeline, which was previously blocked under the Obama and Biden administrations after years of political dispute. The new route would connect near the original Keystone border crossing, potentially reusing existing infrastructure left from the abandoned project. Canadian officials and energy stakeholders, including Alberta Premier Danielle Smith, welcomed the move as strengthening North American energy supply and cross-border trade.

Ukraine Strikes Key Russian Refinery and Pumping Station, Disrupting Urals Oil Infrastructure

Ukrainian drones hit Lukoil’s Perm refinery (~260,000 bpd capacity) and a nearby Transneft pumping station in Russia’s Urals region, causing fires and damaging a primary processing unit that Ukraine says is now largely out of operation. The same oil transport hub had already been attacked a day earlier, with additional strikes also reported on the Orsknefeorgsintez refinery (<strong>120,000 bpd</strong>). Kyiv says the campaign aims to reduce Russia’s oil revenues amid high global prices driven by the Iran-related energy disruption. Satellite fire data and reported output declines suggest Russia’s refining rates have fallen to the lowest since early 2022.

Urals Crude Rebounds Above $100 as Brent Rally Boosts Russian Prices

Russia’s Urals crude prices rose above $100 per barrel, with Primorsk at about $104 (+$6.50) and Novorossiisk near $106, supported by stronger Brent crude. The rebound follows a broader oil rally of over 6%, driven by supply concerns linked to the Iran war. Despite higher freight costs, elevated global prices have boosted exporter revenues, with Russia’s tax benchmark running 46% above budget assumptions in early April. This contrasts with Russia’s $59 per barrel budget baseline for 2026, highlighting the impact of current market conditions.

Repsol to Lift Jet Fuel Output by Up to 20% as Iran War Tightens Supply

Spain’s Repsol plans to increase jet fuel production by 15–20% to counter shortages caused by the Iran conflict, as Q1 adjusted profit rose 57% to €873 million ($1.02 billion) on strong refining margins. Refining margins more than doubled to $10.9 per barrel, while EBITDA jumped 110% to €2.61 billion, supported by market volatility. The company also invested €1.2 billion to build crude inventories and secure feedstock, aiming to maintain supply stability. Despite slightly missing its €897 million forecast, Repsol is leveraging higher prices and refining strength to expand output and margins.

Petrobras Hits Record Output as Brazil Expands Role in Volatile Oil Market

Petrobras reported record oil and gas production of 3.23 million barrels of oil equivalent per day, up 16% year-on-year, while running refineries at 95% capacity. The surge strengthens Brazil’s role in global energy markets amid disruptions from the Iran war. The state-run producer shipped about 62% of its crude exports to China in the first quarter—roughly double the share from a year earlier—highlighting China’s growing role as the primary destination for Brazil’s increasing oil output. Increased refining output has also reduced Brazil’s fuel import needs while helping stabilize domestic supply.

Pemex Posts Third Straight Quarterly Loss as $16.5 Billion Debt Payments Weigh on Finances

Pemex reported a $2.63 billion loss in Q1, its third straight quarterly deficit, as $16.5 billion in debt repayments weighed on results despite improved production. Total debt fell to about $79 billion, the lowest in 12 years, with financing costs down 15%, helped by government support and cash injections. Crude output rose slightly to 1.65 million bpd, while gas production increased about 12%, but structural challenges and high leverage continue to limit recovery despite oil prices above $100.

Shenghong Plans Two-Month Shutdown of 320,000 b/d Refinery in June

China’s Shenghong Petrochemical is set to shut its entire refining complex for about two months starting June, marking its first major turnaround since launching in 2022. The maintenance will include its 320,000 barrels-per-day crude unit along with secondary processing units, according to sources. The complex also includes a 2.8 million tpy aromatics unit and a 1.1 million tpy ethylene plant, indicating a significant temporary reduction in refining and petrochemical output.

US Sanctions on Hengli Refinery Raise Spillover Questions for Major Chinese Shipyard

US sanctions on Hengli Petrochemical’s refinery unit for allegedly buying sanctioned Iranian oil have triggered uncertainty over potential spillover effects on its sister company, Hengli Shipbuilding Dalian, though the yard insists it remains legally separate and unaffected. The shipyard, which holds a massive orderbook of 277 vessels (ranked 4th globally) including contracts for major owners like MSC, Capital Tankers, and Dynacom, says its operations continue normally and that “US sanctions do not apply” to its business. Industry participants and compliance experts note that while current contracts appear safe, concerns remain over long-term financing, refund guarantees, and how US regulators may interpret “indirect exposure.”

Mercuria Sues Baltic Exchange Over Distorted Oil Shipping Benchmark During Iran War

Mercuria Energy has filed a lawsuit against the Baltic Exchange in London, alleging distortion of the key Middle East–China shipping benchmark TD3C. The trader claims the mispricing—driven by disruptions in the Strait of Hormuz during the Iran war—has caused losses estimated in the “hundreds of millions of dollars.” Freight rates for the route surged to over $600,000 per day, up roughly tenfold since the start of the year, as limited vessel traffic skewed benchmarks. The dispute highlights how extreme volatility in global oil shipping markets has undermined traditional pricing mechanisms during the crisis.