Iran attacks Civilians; Again. The Energy Report 06/03/2026

Oil prices are up more than two dollars a barrel this morning, with WTI July futures trading around $95.87–$96.50 (+$2.00–$2.50 intraday), following a very large crude draw in the American Petroleum Institute (API) report after Iran struck  Kuwait International Airport. There were similar attacks in Bahrain, with reports of at least one person killed and 63 injured in Kuwait, including several serious cases, mostly from the airport strike. @EnergyPhilFlynn
Reports indicate significant damage to the airport terminal, and flights were suspended, as Iran appears to have no hesitation in attacking civilian targets indiscriminately, with little regard for the multinational civilians present. Iran claims the strike, which killed innocent civilians, was retaliatory after U.S. strikes on Iranian targets, including Qeshm Island and an oil tanker.  Still the U.S. say most incoming projectiles were intercepted, but some got through and caused civilian damage. Kuwait has strongly condemned the attack as a violation of its sovereignty. @EnergyPhilFlynn
This caused oil to rally after it had faded following the API report, which showed a 6.75 million barrel crude draw for the week ending May 29—far larger than the expected roughly 3.6 million barrel decline. This marks the seventh straight weekly draw amid tight global supplies. Yet a surprise gasoline build of 3.5 million barrels and a small distillates (diesel/heating oil) draw of 214,000 barrels eased some tightness concerns and reports from Bloomberg that more oil may be getting through the Strait of Hormuz than some people realize.
Bloomberg reports that ship transits are picking up modestly, with vessels successfully exiting the waterway this week. Shipowners report increased optimism thanks to U.S. assistance.
According to Bloomberg, the U.S. military (Central Command) is using lower-profile methods to support commercial shipping rather than overt escorts or open challenges to Iran.
Ships are turning off transponders and hugging the Omani coast (southern side of the strait) to avoid Iranian mines and threats.
The U.S. is quietly coordinating with willing shippers, providing navigation advice and assistance as needed.
U.S. Central Command states it continues to communicate and coordinate with commercial vessels seeking safe transit.
So, the U.S. is finding more ways to work around one of the biggest supply shocks in oil market history. Since early 2026, after the escalation and strikes on Iranian leadership, the Strait of Hormuz has seen effective partial closure and mining. That has taken millions of barrels per day offline at the peak. It is no surprise Brent has been trading strong—averaging in the mid-to-high $90s and popping over $100 at times. Inventories and some creative alternative routings are cushioning the blow a bit, but the tightness is real, and the market still seems encouraged by these workarounds.
UAE and ADNOC are accelerating a new refined products pipeline to Fujairah on the Gulf of Oman, adding to the crude West-East line that is already about 50% complete and targeting a 2027 startup. That means more barrels can bypass the troubled Strait of Hormuz—a constructive long-term development for UAE supply security.
This comes as Marco Rubio signaled that the U.S. wants to end Russia oil sanctions waivers as soon as possible. If that happens, global supply could tighten further if India and others lose easy access to discounted Russian crude. Also reports that India has successfully rebuilt its crude inventory buffers after April’s sharp draw, but a strong push on domestic energy security has cut refined product exports to the lowest level since According to Amena Bakr and Kpler. Vitol’s Tom Baker sees around 4 million bpd of global oil demand destruction stemming from the current crisis.
At the end of the day, keep a close eye on the upcoming EIA status report—it will give us the latest read on inventories and could be a key near-term market mover if it shows further draws. Yet stay ready to trade both sides and get my trade levels as a guide. at gas futures are holding near $3.16-$3.22 this morning after pulling back from recent three-month highs. The market saw solid support from above-normal temperature forecasts boosting cooling demand, but profit-taking and softer LNG feedgas flows (down due to seasonal maintenance) capped the upside.
Summer heat building across much of the Lower 48 is keeping power demand in focus, while production remains strong but slightly lower month-over-month. Storage is comfortable above seasonal averages, but the heat dome potential could tighten things as we move deeper into June. Bullish weather bias is in play.
Fox Weather Report s that warm to hot conditions dominate much of the U.S. this week with summer-like temperatures in the 80s and 90s across the Midwest, South, and Northeast. Above-normal temps expected to continue, increasing air conditioning load and supporting natural gas demand for power generation. Scattered storms possible but overall dry and heating up.
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