Energy markets are moving quickly as tensions involving the U.S., Israel, and Iran have increased the risk of disruptions in the Middle East—especially around the Strait of Hormuz, a key shipping lane that typically carries about 20% of global oil trade and significant LNG volumes. Prices reacted immediately. On the supply side, several disruptions are adding to the “risk premium,” including a pause in Qatar LNG liquefaction, reports of a major Saudi refinery outage after a drone strike, and reduced Iraqi exports (around 1.5 million bpd) due to port/logistics constraints. Shipping is also tightening as war‑risk insurance costs rise, some carriers limit bookings, and vessel congestion near Hormuz delays equipment; tanker and LNG freight rates have jumped to record or multi‑year highs. While U.S. crude inventories have been building and additional supply from the U.S. and OPEC+ could help if transit conditions normalize, buyers are already seeing a firmer prompt market for crude and distillates as companies move to secure coverage.
The near-term outlook remains headline driven. If traffic through the Strait of Hormuz continues to move and regional facilities restart, part of the geopolitical premium could fade and prices may retrace; if disruptions persist for weeks, the risk shifts toward tighter physical supply, higher replacement costs, and continued pressure on freight and insurance. Key items to watch are:
(1) shipping flow rates, queueing, and any escort/convoy measures
(2) timing for Qatar LNG and regional refinery restarts
(3) whether Iraq’s export constraints ease or worsen
(4) any policy response (including potential Strategic Petroleum Reserve releases).
If you have any questions or would like current pricing, please contact your Energy Account Manager.
Propane
U.S. propane supplies remain comfortable, with inventories increasing again last week and staying well above typical levels for this time of year. Domestic production continues to run strong, and export activity is steady supporting the view that the U.S. market is well supplied. Internationally, buyers are still watching global trade flows (including potential additional demand from India), but there has been no major impact on U.S. availability so far.
Market outlook:
With plenty of supply and relatively mild demand, propane prices may stay choppy but generally contained in the near term. The biggest wildcard is geopolitical risk in the Middle East, which can lift prices quickly if it threatens production or shipping routes. Overall, our base case is stable supply and steady exports, with price spikes most likely tied to headlines or sudden weather shifts.
If you have any questions or would like current pricing, please contact your Energy Account Manager.
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