Conversations with traders confirm, the Oilholic's own modelling in that eventuality - a baking in of a minimum 10% premium for the remainder of 2026. That's because even if peace arrives to the region tomorrow, it will take months to restore production.
Which, for a market that was staring at a pre-war surplus, will now see supply constriction last for much of the year. The premium of that dynamic would be reflected in Brent prices till the end of the year.
Speaking at the event, US Energy Secretary Chris Wright admitted Asia would be worse off, but said the Trump administration would increase the volume of its crude supplies heading to the region. Chevron CEO Mike Wirth reflected what many have been saying here in Houston that the Iran War has not been fully priced into the oil market.
Meanwhile, addressing the event via video link, Dr Sultan Ahmed Al Jaber, Group CEO of ADNOC, said weaponizing the Strait of Hormuz was "economic terrorism" against every nation and this sentiment is being reflected across the global economy. Here's yours truly's full report on the morning's proceedings from day one of CERAWeek for Forbes.
As part of the agreement, TotalEnergies has committed to investing approximately $1 billion - the value of its renounced offshore wind leases - in oil and natural gas and LNG production in the United States. Following the French major's "new" investment, the US will subsequently reimburse the company dollar-for-dollar, up to the amount they paid in lease purchases for offshore wind. Additionally, TotalEnergies has pledged not to develop any new US offshore wind projects.
“This agreement is yet another win for President Donald Trump’s commitment to affordable and reliable energy for all Americans,” said US Secretary of the Interior Doug Burgum.
“Offshore wind is one of the most expensive, unreliable, environmentally disruptive, and subsidy-dependent schemes ever forced on American ratepayers and taxpayers. We welcome TotalEnergies’ commitment to developing projects that produce dependable, affordable power to lower Americans' monthly bills while providing secure US baseload power today—and in the future.”
For his part, Patrick Pouyanné, CEO of TotalEnergies, said: "We are pleased to sign this settlement agreements with the DOI and to support the Administration’s Energy Policy. Considering that the development of offshore wind projects is not in the country’s interest, we have decided to renounce offshore wind development in the US, in exchange for the reimbursement of the lease fees.
"Furthermore, these agreements, under which we will reinvest the refunded lease fees to finance the construction of the 29 Mt Rio Grande LNG plant and the development of our oil and gas activities, allows us to support the development of US gas production and export. These investments will contribute to supplying Europe with much-needed LNG from the U.S. and provide gas for US data center development. We believe this is a more efficient use of capital in the US."
It's started off with a bang folks, but that's all for now. More musings from Houston to follow soon. Keep reading, keep it here, keep it 'crude'!
