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Week of May 25-31, 2026

The IEA’s World Energy Investment 2026 report confirmed that three months of Hormuz closure and ongoing tech sector demand are reshaping global energy investment, with natural gas spending hitting a 10-year high at $330 bn, coal reaching a 14-year high at $180 bn, and oil investment falling for a third consecutive year below $500 bn. Germany signed a 20-year LNG deal with Canada to help with efforts to diversify away from both US and Gulf dependence, while non-Gulf producers from Argentina to Brunei are graduating from stopgaps to structural suppliers.

The damage continues to extend well beyond energy markets and stretch implications into 2027; sulphur prices surging from $180 to nearly $1,000 per tonne are cascading into fertiliser production with warnings of famine, while in India’s Firozabad, gas supply cuts have knocked glass output by 30%, threatening exports. A tentative US-Iran ceasefire extension emerged Friday, but shut-in fields need up to seven months to restart, US distillate stocks are at a 23-year low, and the IMF, World Bank, IEA and WTO jointly warned that inventory depletion threatens fuel security.

The crisis is helping make the case for faster energy transition and undermining it simultaneously: the SEC proposed scrapping climate disclosure, the EU waived methane law penalties for three years, and South Africa is extending coal. The Bundesbank’s first deputy governor advanced the message that fossil fuel dependence is a strategic vulnerability, citing cost and inflation as the consequences, and accelerated transition as the solution. This same point has already been made by institutional voices. European solar hit record output during a heat wave.

Meanwhile, Exxon’s CCS expansion faces Republican opposition as experimental and subsidy-dependent, rare earth mining draws environmental scrutiny from Madagascar to Myanmar, and European wind manufacturers are joining the domestic protection sentiments, calling for Chinese components to be blocked from publicly funded initiatives on the EU grids.

Part 1: The Gulf Crisis

Between war and deal

The week opened with two LNG tankers carrying Qatari gas bound for China and Pakistan passing through the Strait of Hormuz alongside a crude carrier, the largest volume of energy shipments to exit the Gulf in a single day since the war began. By Tuesday, two more supertankers carrying Saudi and Emirati crude had crossed, pushing outbound flows to four million barrels in a day for the first time in a week. But the trickle remains just that: vessels leave in bunches, then volumes drop for days, and widespread AIS signal interference makes independent verification difficult.

Diplomatic momentum built in parallel. A tentative memorandum of understanding emerged: a 60-day ceasefire extension, unrestricted shipping with no Iranian tolls, mine removal within 30 days, and the start of nuclear programme talks. President Trump said Friday he would make a “final determination” from the Situation Room. Major sticking points remain: the fate of Iran’s 440kg stockpile of highly enriched uranium, $24 billion in frozen Iranian assets, and Tehran’s insistence on retaining permanent influence over the strait.

The US Treasury sanctioned Iran’s newly created Persian Gulf Strait Authority, which has been requesting as much as $2 million per vessel for safe passage. The fragility of the process was exposed mid-week. US forces shot down five Iranian attack drones near the strait and struck southern Iran, prompting Tehran to fire a ballistic missile at Kuwait in what US Central Command called an “egregious ceasefire violation.” Both sides accused the other of breaking the truce. The Pentagon’s defence secretary said Saturday at the Shangri-La Dialogue that the US is “more than capable” of resuming strikes. Oil prices swung accordingly: Brent fell from near $100 to $92 across the week, on track for its biggest monthly decline since 2020, while WTI hit a six-week low near $87. Markets are pricing in a deal. The physical system tells a different story.

Reopening won't happen quickly

Even an agreement would not restore energy flows quickly. Shut-in oilfields could take seven months to restart. LNG facilities have sustained damage requiring repair. The UAE’s ADNOC chief has said traffic volumes will take at least four months to reach 80% of prewar levels, with full normalisation unlikely before the first half of 2027. Roughly 2,000 ships remain stranded in the Gulf. Only a quarter of non-Iranian large tankers trapped at the outbreak of war have managed to escape. The physical strain is visible in the data. US distillate stocks have fallen to their lowest level in 23 years. Crude holdings at the Cushing, Oklahoma, hub are approaching the 20-million-barrel minimum operating level. The Fed’s Lorie Logan warned from Tokyo that US production cannot fill the global supply gap, and if shipping does not return to prewar levels soon, “world oil and natural gas consumption could need to fall more meaningfully.” The IMF, World Bank, IEA and WTO issued a joint statement warning that continued rapid depletion of oil inventories ahead of peak summer demand presents increasing risks for fuel security. The market’s sanguine pricing sits uneasily against this reality. Chevron’s CEO observed that traders appear to be betting the conflict is nearing resolution, but cautioned that “kinetic activity” continues and risks remain “very real” for shipowners. Insurance, ship-owner confidence, and Iranian fee structures all remain unresolved.

Monday, May 25

• Two LNG tankers pass through Strait of Hormuz (Financial Times)

• The energy shock is not over yet (Financial Times)

Tuesday, May 26

• US and Iran: the art of the possible (Financial Times)

• Oil Rebounds as Strikes Near Strait Muddy Outlook for Iran Deal (Bloomberg)

• Two More Oil Supertankers Exit Hormuz to Help Push Up Flows (Bloomberg)

Wednesday, May 27

• Donald Trump says rising economic costs will not force him into Iran deal (Financial Times)

• Fed’s Logan Warns US Oil Production Won’t Fill Global Supply Gap (Bloomberg)

• Oil Steadies as US Sees Progress in Iran Deal Despite Tensions (Bloomberg)

Thursday, May 28

• US and Iran exchange fire amid increasingly strained truce (Financial Times)

• Oil Spikes as Renewed Gulf Attacks Threaten Fragile Ceasefire (Bloomberg)

• IMF, World Bank, others warn Middle East war is straining energy supplies (Reuters)

Friday, May 29

• Oil Edges Lower at Open on Tentative Deal to Extend Iran Truce (Bloomberg)

• US, Iran Reach Deal on Extended Ceasefire Pending Trump Approval (Bloomberg)

Saturday, May 30

• Pentagon chief says U.S. ready to restart strikes on Iran if no deal (Reuters)

Part 2: Key Stories Beyond the Gulf

The new energy map

Three months of Hormuz closure have accelerated a redrawing of global energy maps and actors. Germany signed a 20-year agreement to buy up to 1 mt of LNG from Canada’s future C$10 billion facility in British Columbia backed by Blackstone. The deal is a direct diversification play: 94% of Germany’s LNG currently comes from the US, and its chancellor had been courting Middle Eastern suppliers before the war exposed the fragility of Gulf flows.

Non-Gulf producers are cashing in. Argentina’s crude exports hit a record 9.89 million barrels in May, more than doubling since February, with 7.21 million barrels shipped to Asia in three months. Brunei’s oil exports rose 51% year-on-year. Oman’s refined product exports reached record highs.

The IEA’s World Energy Investment report shows the capital following: natural gas spending is hitting a 10-year high at $330 billion, upstream investment in Africa, Central and South America will jump more than 10%, while Middle East oil and gas spending will decline 1%.

On the demand side, China’s structural oil decline is laid bare. Crude imports could fall to 10.9 million barrels per day, the weakest since 2022. Transport is increasingly electric, refining capacity exceeds demand, and seaborne crude imports have collapsed to 6.5 million barrels per day, the lowest since 2016. In Mozambique, a $2 billion cost dispute between the government and TotalEnergies over the project stoppage threatens to further delay a facility viewed as vital to the country’s ambitions as a strategic alternative LNG supplier, with first exports not expected until 2029.

• Germany, Canada to Sign Major LNG Deal as Europe Seeks Energy Security (Bloomberg)

• The new oil order that could emerge from an Iran deal (Axios)

• Australia’s Santos plans to boost LNG, oil production while lowering debt (Reuters)

• Mozambique Disputes $2 Billion Claims for Total LNG Project (Bloomberg)

• China’s Declining Appetite for Oil Laid Bare by Iran War (Bloomberg)

• Not everybody is a loser from the Iran war. Just ask Brunei (Reuters)

• Chevron files request to acquire offshore Greek block, energy ministry says (Reuters)

• Norway Presses EU to Drop Ban on Arctic Drilling of Oil and Gas (Bloomberg)

Supply chains breaking beyond fuel

The damage from Hormuz has penetrated the material economy far beyond energy. Half the world’s sulphur trade passed through the strait before the war. Sulphur prices have surged from $150–180 per tonne to $850–900, with some delivered prices approaching $1,000. The phosphate market was already constrained before the war by rising sulphur demand from battery metals processing; the Hormuz closure has turned a tight market into a crisis. The market is splitting along income lines. Wealthier countries can still secure supplies; farmers in Sub-Saharan Africa and Southeast Asia are already reducing how much phosphate they apply. Harvests could be hit as early as next year. Some regions face risk of potential famine.

In Firozabad, India’s “city of glass,” gas supply cuts have knocked output by an average of 30%. Factories that should now be making Halloween and Christmas ornaments for US export are going cold. Some producers have switched to LPG cooking cylinders, whose prices have also jumped 50%. Across India, 26% of the country’s 30 million-plus small manufacturers are described as being on life support. The UN Development Programme has warned the conflict could push 2.5 million Indians into poverty.

• Fertiliser groups cut production as Iran war squeezes sulphur supplies (Financial Times)

• India’s ‘city of glass’ under pressure as Gulf crisis chokes off energy (Financial Times)

Winds of protectionism and regulatory revisions

European wind manufacturers are adding a protectionist layer. Nordex’s CEO called for all non-western turbine makers to be blocked from new wind capacity connecting to European grids, framing the issue as supply chain independence and technology sovereignty. European companies still control over 90% of the regional market, but fear a repeat of the solar panel collapse that left Europe dependent on Chinese imports.

The EU will ask member countries to waive penalties for three years for oil and gas companies that breach its methane emissions law, responding to pressure from the US government and industry groups who warned the rules could hamper fuel supply security. The waiver applies to existing contracts and those signed before January 2028. Environmental campaigners say it reduces the world-first legislation to a “paper tiger.”

In Washington, the SEC proposed rescinding its climate risk disclosure rule entirely, calling it a “dramatic overreach.” The rule, adopted in 2024, required virtually all public companies to report on direct emissions. It never took effect after lawsuits from Republican-led states. Companies operating in California and the EU may still face separate disclosure requirements. The EU is also considering extending its emissions trading system to flights departing the bloc, exposing major carriers to significant additional costs: €1.8 billion for Lufthansa, €1.7 billion for IAG, and €1.5 billion for Air France-KLM in 2027, according to projections at a carbon price of €120 per tonne.

• Top European wind turbine maker calls ‘non-western’ rivals a security threat (Financial Times)

• Lufthansa, IAG and Air France-KLM each exposed to €1.5bn-plus in EU carbon costs, analysis shows (Financial Times)

• EU plans three-year waiver on penalties for oil and gas firms that breach methane law (Reuters)

• US securities regulator seeks to end corporate disclosures on climate risk (Financial Times)

The transition as panacea

The Bundesbank’s first deputy governor published an opinion piece in the FT, calling for urgent policy clarity on the transition and echoing the previously made argument that fossil fuel dependence is “not merely an environmental liability” but “an economic and strategic vulnerability.” The pace of transition is outrunning political narratives, she wrote: investment in renewables outpaced fossil fuels five to one last year, global EV sales rose more than 20%, and the cost of solar has fallen more than 99% since 1979. Spain is cited as a role model, with rapid renewables deployment reducing the bad influence of gas on electricity prices. Caution about competitiveness, the argument goes, should not become a pretext for obstructing faster progress.

• Urgent clarity on policy needed on the energy transition (Financial Times)

The transition under pressure

Evidence from the week supports both sides. A European heat wave broke May temperature records. At peak, solar met nearly half of UK electricity demand, the highest on record, pushing French hourly power prices below zero. But the UK’s biggest utility, SSE, announced it is unlikely to meet its 2030 renewable energy target, citing grid connection delays, policy uncertainty, and local opposition. It took £156 million in charges on delayed Scottish wind farms. Grid capacity is emerging as one of the biggest obstacles to the transition; the ambition exists, but the physical infrastructure to deliver it does not.

South Africa is extending coal plants that generate 80% of its electricity after gas replacement projects stalled. A government adviser noted that with wars ongoing, coal plants cannot be shut down. A coal supply contract signed recently runs to 2043 for a plant commissioned in 1979. Meanwhile, Eni and Seri Industrial signed an agreement to develop a lithium iron phosphate battery supply chain in Italy, targeting more than 10% of the European stationary battery market with a gigafactory producing over 8 GWh per year by 2029.

And Exxon’s world’s largest carbon capture and storage business on the US Gulf Coast is facing opposition. The company is developing a $5 billion-plus pipeline network across Texas, Louisiana and Mississippi, but depends on climate regulations, carbon tariffs and subsidies the oil industry once fiercely opposed. But in Louisiana, the leading US hub for CCS, a Republican state treasurer and Senate candidate has called it “experimental technology” reliant on taxpayer subsidies that tramples property rights. Environmental groups label it a Trojan horse to justify continued extraction, noting that most CO₂ collected by Exxon is currently used for enhanced oil recovery. The backlash threatens $75 billion in proposed capital spending.

• Can Exxon build the world’s biggest carbon capture business? (Financial Times)

• Europe Heat Wave Boosts Solar, Sends Power Prices Negative (Bloomberg)

• ExxonMobil wins decisive backing to move corporate domicile to Texas (Financial Times)

• Tech giants back new data center climate initiative (Axios)

• UK’s Biggest Utility Set to Miss Its 2030 Green Power Target (Bloomberg)

• South Africa Set to Run Coal Stations Longer as Gas Projects Lag (Bloomberg)

• Eni and Seri Industrial to jointly develop stationary battery supply chain (Reuters)

The transition’s messy underside

The environmental impact of transition supply chains are drawing scrutiny from another direction. BHP, the world’s biggest miner, delayed and downgraded plans to switch to electric vehicles at its Pilbara iron ore mines, purchasing 62 diesel trucks. BHP’s Australian operations consume 1.5 billion litres of diesel per year. In Madagascar, more than 6,000 people are in dispute with Rio Tinto over alleged contamination from rare earth mineral extraction. In Myanmar, chemicals are injected into mountainsides to leach rare earths from clays. Insufficient alternatives to Chinese and Myanmar production mean many buyers are not scrutinising how materials are produced. These are the minerals that go into EVs, wind turbines and defence systems.

• BHP’s Diesel Addiction Is Becoming Expensive (Bloomberg)

• Activists protest French state’s surprise major stake in TotalEnergies outside AGM (Reuters)

• Race for rare earths sparks concern about environmental damage (Financial Times)

Energy security and the summer squeeze

Across Asia, temperatures have climbed well above long-term averages weeks ahead of the usual summer peak. Seoul readings are 13% above normal; Shanghai 12%; Tokyo 10%. Several Indian towns have recorded temperatures above 40°C. The heat is driving widespread air conditioner use across a region where the share of dwellings with cooling systems is expected to jump from 36% to 60% by 2050.

Over 60% of utility-supplied electricity in Asia comes from coal and gas plants. Authorities in Vietnam, the Philippines and India have issued power output warnings. With the gas crisis now coming more in focus, LNG prices could rise a further 50% through August if the strait remains largely closed, as summer demand collides with constrained supply. Chinese LNG imports, which slumped after the war began, are recovering; Japan faces a blistering summer forecast with spot electricity prices near 2022 highs. The IEA notes that coal investment will reach a 14-year high at $180 billion, and some Asian countries may keep existing coal plants operating longer to bolster energy security.

• A Scorching Asian Summer Will Add to Risk of Surging Gas Prices (Bloomberg)

• Asia’s early heat wave signals potential summer squeeze for coal and gas (Reuters)

• Natural gas spending to hit 10-year high in 2026 as oil investment falls, IEA says (Reuters)

• Mitsui Seeks LNG Investments as Data Centers Boost Power Demand (Bloomberg)

• More than half of shadow fleet oil tankers pose environmental disaster risk (Financial Times)

• EU Weighs Temporary Freeze on Russia Oil Price Cap Over Iran War (Bloomberg)

• A Rare ‘Super’ El Niño Is Looking More Likely. Here’s What to Expect (Bloomberg)

Other energy context stories

• Investors race to get exposure to SpaceX ahead of IPO (Financial Times)

• US agrees ‘perpetual’ futures trading after offshore Hyperliquid’s huge growth (Financial Times)

Research bank

• World Energy Investment 2026 – Analysis (IEA)

SOURCES Financial Times, Bloomberg, Reuters, Axios, IEA

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