“From Wavers to Waved Off: Mastering the Art of the Keeping the Enemies Guessing. The Energy Report 05/19/2026

Crude is backing off as we are seeing wavers extended and attacks waved off.  WTI and Brent are slipping, and gasoline and diesel futures are following, as Washington extends waivers for purchases of Russian crude and reports say the Trump administration has shelved a planned strike on Iran keeping Iran guessing along with oil traders that move with every headline, real or not.

President Trump broke the oil war worry rally after he said, “I have been asked by the leaders of Qatar, Saudi Arabia and the United Arab Emirates to hold off on our planned Military attack of the Islamic Republic of Iran, which was scheduled for tomorrow, in that serious negotiations are now taking place, and that, in their opinion, as Great Leaders and Allies, a Deal will be made, which will be very acceptable to the United States of America, as well as all Countries in the Middle East, and beyond. Based on my respect for the above-mentioned leaders, I have instructed Secretary of War Pete Hegseth, the Chairman of the Joint Chiefs of Staff, General Daniel Caine, and the United States Military that we will NOT be doing the scheduled attack of Iran tomorrow…In the event that an acceptable Deal is not reached, they have been instructed to be prepared to go forward with a full, large scale assault of Iran, on a moment’s notice.” He emphasized the deal would include “NO NUCLEAR WEAPONS FOR IRAN!”

At the same time, the U.S. extended (or issued fresh temporary) waivers on sanctioned Russian crude, letting some loaded tankers move to keep supplies flowing and prevent prices from going full rocket ship. The waiver lapsed on May 16, 2026. On May 18–19, the U.S. extended it for another 30 days. Bessent announced it on X, framing it as aid for “the most vulnerable nations” cut off from Gulf supplies.

Even so, pressure is building fast in Iran: onshore crude storage, centered at Kharg Island, is estimated at 50–55 million barrels and close to full, with some reports in late April and early May 2026 suggesting only 12–22 days of space remained. To keep oil moving, Iran has leaned harder on floating storage, parking aging and retired tankers near export hubs to hold barrels it cannot sell. One example is the roughly 30-year-old VLCC Nasha brought back into service, loaded, and inched along the coast to free up terminal space. Dozens of old tankers, able to hold tens of millions of barrels, are now serving as improvised storage—ships that were once idle, obsolete, or barely worth running.

Meanwhile, the International Energy Agency is out with its latest warning: the world may be running out of oil fast, with massive supply disruptions from the Iran situation and forecasts of huge deficits. Fatih Birol, Executive Director of the International Energy Agency (IEA) while speaking to reporters on the sidelines of a G7 finance ministers meeting in Paris said, “I think it [commercial oil inventories] is depleting very fast… We have still several weeks, but we should be aware of the fact that [they are] declining rapidly.” He noted that releases of strategic oil reserves have added ~2.5 million barrels per day to the market, but stressed these are limited (“not endless”). This comes amid rising seasonal demand for diesel, jet fuel, gasoline, and fertilizers.

This comes as analysts at JPMorgan flagged that OECD commercial crude inventories could reach operational minimums between May 9 and May 30, 2026. At that point, price responses shift from linear to exponential as physical tightness intensifies. Gunvor Group’s Frederic Lasserre warned in late April that if Strait of Hormuz disruptions persist another month, markets will effectively run out of usable stockpiles and hit tank bottoms. US-focused views like Carlyle’s Jeff Currie point to Cushing and broader US tanks testing critical lows around early July, with draws accelerating due to strong refining/export demand.

Yet the market, based on the curve, seems comfortable that we are not headed into Mad Max territory yet. Today brings the American Petroleum Institute (API) weekly report on U.S. inventories. Last week’s data showed crude, gasoline, and distillate stocks drawing down but staying reasonably close to seasonal averages—not panic territory. We’re exporting record volumes of crude (hitting over 5-6 million barrels per day in recent weeks as global buyers flock to U.S. barrels), which is tightening domestic balances but proving we’re the reliable supplier the world needs right now.

Natural gas is on the rise as Fox Weather highlights a major warmup and heat wave gripping the eastern half of the U.S. June NYMEX natural gas futures climbed toward the $3.00–$3.08/MMBtu area overnight and into early trading, hitting seven-week highs. This builds on recent gains amid stronger summer cooling demand expectations, tighter prompt supplies, and bullish technical positioning. Weather-Driven Bullishness Fox Weather reports a scorching stretch ahead, with summer-like heat taking hold across the East. Temperatures along the I-95 corridor and broader Mid-Atlantic/East Coast could run 20–30°F above average, challenging or breaking over 150 records in major cities. Highs in the 80s–90s (with triple-digit heat possible in parts of the South and Texas) will spike air-conditioning use and power burn.

This “sudden summer” pattern aligns with broader forecasts for above-average temperatures. It boosts cooling degree days (CDDs) and natural gas demand for electricity generation right as the market shifts focus from shoulder-season injections to peak summer risks. Early heat waves like this can slow storage builds or even trigger early draws if the pattern holds—duration will be key. Market Action and Fundamentals Prices: Henry Hub futures up 1.3–2.5% in recent sessions, reclaiming $3.00+ psychologically important level for the first time since late March. Prompt-month strength reflects heat-driven cash market gains from Texas to New England (national average cash above $2/MMBtu). Reports also say that production has softened (some operators like EQT curtailing output amid weak spot prices), with daily output hitting 15-week lows. LNG feedgas flows eased from April records due to seasonal maintenance (e.g., Golden Pass, Freeport), though exports remain a factor.  Download the Fox Wwather ap and stay tuned to the Fox Business Channel. Call me today at 888-264-5665 or email me at pflynn@pricegroup.com.