Strait Control Freaks. The Energy Report 05/07/2026

Iran still clings desperately to dreams of control of the Strait of Hormuz—an international waterway that the regime views as its last pathetic bid for relevance after squandering every genuine economic opportunity over the last 47 years. With nothing left but the ability to hold global energy flows hostage, Tehran is now trying to formalize its extortion through bureaucratic theater. The Islamic Revolutionary Guard Corps announced Wednesday that “safe, stable passage” will be possible under “new protocols.” Oh, sure it will. This came shortly after reports that the U.S. offered a peace deal now under consideration in Tehran. In practice, Iran is demanding that shipowners email the so-called Persian Gulf Strait Authority with extensive details: ship destination, origin country, cargo description, current and previous flag registration, cargo value, and crew nationalities.

 

 

 

 

China is frosted and while it values the cheap Iranian barrels, is tired of Tehran’s actions jeopardizing much larger stakes in regional stability and its own imports. China carries roughly one-third of its crude imports — have raised costs, stranded vessels, and forced China to rely on their oil reserves hurting its broader Gulf relationships and Belt & Road projects. In fact, Bloomberg news reports, “China is quietly pulling back where it matters most: money.

 

Regulators have told the country’s biggest banks to halt new lending to five refiners hit by fresh US sanctions over Iranian oil links, people familiar with the matter said, signaling a cautious financial retreat even as Beijing publicly pushes back against Washington. The directive stops short of a full clampdown (existing loans stay intact), but it draws a clear line around new exposure.”

 

This comes after US officials including Trade Rep Jamieson Greer and Treasury Secretary Scott Bessent signaled that they plan to press Beijing to curb Iranian oil purchases — which they say fund regional instability — and use its leverage to help reopen the Strait and stabilize flows.

This tougher stance by China on Iran comes ahead of the high-stakes US-China meetings, capped by President Trump’s summit with Xi Jinping in Beijing on May 14-15.  But China is getting tired of Iran. And so are we.

 

I                            Is Europe getting tired of the green energy madness that has hurt them geopolitically and economically?

Oil Price and Reuters reports that the European Union has suspended enforcement of its stringent methane emission reporting regulation for oil and gas suppliers, citing an ongoing energy crunch that has driven prices higher and triggered a scramble for scarce supplies. According to a draft document from the European Commission to national governments, reported by Reuters, EU capitals have been told they can delay planned penalties for non-compliance. “Sanctioning should be delayed until the situation is stable and resumed if the infringement persists and the risk to the security of supply is no longer present,” the document states.

 

This regulation, adopted two years ago and effective this year, aimed to slash methane emissions both inside the EU and from foreign suppliers by imposing expensive tracking, monitoring, verifying, and reporting requirements across entire supply chains. Major exporters were never on board.

 

The United States — now the EU’s largest LNG supplier since 2022 — pushed back hard, as did others. President Trump’s administration last year negotiated a major trade deal with EU Commission President Ursula von der Leyen, committing the bloc to purchase $750 billion of U.S. energy commodities over three years. That agreement was always at risk under the heavy compliance burden of the methane directive. U.S. Energy Secretary Chris Wright and American exporters repeatedly warned that the rules threatened reliable supply, while QatarEnergy stated plainly it would not sell LNG to the EU if the directive remained in force.

 

As we have noted repeatedly in these reports, Europe’s aggressive green energy mandates have repeatedly backfired, exacerbating energy insecurity and economic vulnerability rather than solving it. This latest climb-down is another clear “I told you so” moment — when ideology collides with cold-weather reality and supply chain math, security of supply wins.

 

The suspension should ease near-term compliance costs for U.S. and other exporters, support steadier flows into Europe, and remove a key regulatory overhang that had been discouraging investment and trade. Energy Report readers should view this as bullish for near-term supply availability and price stability, though it underscores how fragile Europe’s energy position remains when green ambitions outpace practical realities.

 

At the same time,  the real story is US energy dominance . I can’t help but reflect on when people thought I was crazy when I predicted the United States could achieve energy independence and the that the world was not running out of oil. Back then, the world was gripped by peak oil doom and gloom. Yet I urged people to watch the shale breakthroughs, saying they would ultimately deliver U.S. energy independence. Today, shale oil and fracking are not only powering America — they’re feeding the world.  Twilight in the Desert.. my camel. For more discussion, call me at 888-264-5665.

 

Now, even though U.S. exports dipped yesterday, it’s still stunning to see America serving as the reliable supplier of last resort. The latest Energy Information Admintation (EIA data) underscores this strength. The EIA reported that total U.S. petroleum exports averaged 12.974 million barrels per day.

 

While this was down from the prior week’s record breaking 14.179 mb/d, it remains strong and well above year-ago levels in several categories. Crude oil exports stood at 4.750 mb/d, down from 6.438 mb/d the previous week but still demonstrating America’s ability to swing supply globally. Even with the weekly dip, the United States continues to act as the reliable supplier of last resort to the world. The shale revolution didn’t just make us energy independent — it made us the indispensable energy supplier on the planet.

 

The EIA  data also shows the US economy is humming; in line with record highs in the stock market The EIA put total U.S. petroleum demand based on product supplied averaged 19.484 million barrels per day, down 1.647 mb/d from the prior week’s 21.131 mb/d .

Despite the weekly pullback, U.S. product supplied remains robust, and America continues to export significant volumes, reinforcing our position as the world’s swing supplier. The shale revolution delivered exactly what I forecasted — and then some.

 

Can the Iran thaw bring down gas prices? Yesterday front-month RBOB gasoline futures sharply, down around 4.4-4.5% or ~16 cents on the day with the settlement price: $3.4593 per gallon even as AAA reported another rise in gasoline prices at the pump, while diesel prices are also up but diesel futures were down sharply.  AAA’s national average for regular gasoline rose to $4.558 today (up from $4.536 yesterday and $4.300 a week ago). Mid-grade sits at $5.044, premium at $5.415, diesel at $5.674, and E85 at $3.678. These pump prices reflect lagged retail adjustments from earlier crude spikes.

 

Natural gas futures stayed in a soft shoulder season slumber range overnight, with the front-month June contract  trading near $2.71–$2.72/MMBtu. We’re still feeling the pressure from strong production, which is making some producers angry asking why they do not stop adding solid storage builds, and typical shoulder-season demand. Prices are running about 24% lower than this time last year, which tells you the market is well-supplied heading into summer. Yesterday the complex saw some modest follow-through selling. The market is  expecting another healthy injection today in the 70–85 Bcf range for the. Last week we saw +79 Bcf, pushing stocks to 2,142 Bcf — that’s 116 Bcf above last year and 153 Bcf above the 5-year average. Inventories look comfortable as we move deeper into refill season.

 

A bigger-than-expected build could keep near-term pressure on prices, while a smaller number or any weather surprise might give us a little lift. The Fox Weather ap that you need to download has early May weather has been quiet and on the mild side, which has helped injections run strong. FOX Weather and the models are showing a gradual pickup in cooling demand as we move through May and June, especially across the South and Southwest. I for one can’t wait!

 

Still in the near-term, Fox Weather says we’ll see mixed temps — warmer than normal in the West and parts of the South, a bit cooler in the Upper Midwest. Longer-term, NOAA and private forecasters lean toward above-normal heat this summer (especially West and Southeast), which should support power burn nicely. No big early cold shots on the horizon, but any sustained heat could quickly add some spark. Nat gas production is holding steady near 109–110 Bcf/d.

 

Some operators, such as EQT, have reduced their drilling activity because prices are below $3. Although LNG feedgas volumes are slightly lower due to ongoing maintenance, exports are expected to remain strong throughout the year. Currently, demand is soft during the shoulder season; however, power generation and LNG exports are helping to maintain a decent baseline. The next major factor will be increased cooling demand during the summer. From a technical perspective, the market is testing recent lows, with support found in the $2.60–$2.65 range and resistance between $2.85–$2.95.

 

So download the Fox Weather ap and stay tuned to The Fox Business Network. Call to get the inside scoop at 888-264-5665 nor email pflynn@pricegroup.com. Follow my x account: @EnergyPhilFlynn.