Iran My Bad. The Energy Report 06/05/2026

This week I accused Iran of attacking and killing civilians with it attack on the Kuwait airport . Yet according to Iran I was mistaken. You see Iran according to Breitbart said that instead, Iranian officials on Thursday denied bombing the Kuwait airport and insisted ceasefire talks with the United States are proceeding. Iran claimed the damage to the Kuwait International Airport was caused by an American Patriot missile that was launched in error.  My Bad ,yet Breitbart said that Mohib’s investigators apparently missed the surveillance video released on Thursday that showed an Iranian drone hitting the Kuwait International Airport. Opps
Regardless oil is convinced that the war is getting close to the end with Lebanon and Israel agreeing to a ceasefire and President Trump saying that he will not start all out military operations against Iran unless they harm a American.   The Wall Street Journal reported that Israel and Lebanon’s renewed ceasefire came under pressure within hours of its agreement, as Israel and Hezbollah militants exchanged fire on Thursday and both sides cast doubt on the extent of their participation in the agreement.
The deal, hammered out this week in talks among Lebanese, Israeli and U.S. officials, is contingent on Hezbollah halting attacks on Israeli forces and withdrawing fighters from heavily contested southern Lebanon, the U.S. State Department said.
Yet as I said recently that oil is slipping out of the Strait of Hormuz and countries are finding work arounds  that is allowing the market to remain calm while many  in the oil industry and oil analysts are in panic mode.   Reuters wrote “ The trickle of tankers exiting the Strait of Hormuz has gathered pace in recent weeks, as traders adopt stealth measures to make the crossing. While this is freeing some of the vast oil inventories trapped in the Gulf, it does not signal a slow return to normalcy. Instead, it previews the opaque, fragmented energy market the Iran war is set to leave in its wake. Reuters goes on saying that “ More than four months into the conflict, the U.S. and Iran are still struggling to hammer out an agreement ‌to formally end the war and fully reopen the narrow waterway. The near-total closure of Hormuz stranded more than 13 million barrels of oil per day within the Gulf, forcing producers to shut down oilfields and refineries, triggering supply shortfalls and economic strain across major importing nations. Traffic through the strait remains a fraction of pre-war levels. On the face of it, an average of just three tankers a day has crossed in and out of Hormuz since the conflict began – roughly one-tenth of normal volumes – according to shipping monitors including LSEG and Kpler.
But a closer look at oil stocks tells a more nuanced story. An analysis of the huge volumes stored on tankers inside the Gulf suggests transit activity has quietly accelerated. It points to a growing number of ships leaving the region “under the radar” of satellite tracking systems. More vessels appear to be switching ⁠off their Automatic Identification System (AIS) before and after transiting the strait, adopting tactics long used by Iran to evade Western sanctions. In practice, tankers can “go dark” for days around the crossing, only to reappear weeks later near their destination.
Shipping analytics firm Vortexa estimates that around 65% of outbound laden tankers transited in “dark” mode in May, showing how widespread the practice has become.
That opacity is distorting the market’s line of sight. Reduced visibility into cargo movements and destinations makes it harder to gauge the flows underpinning benchmark pricing. That makes alternative indicators increasingly important.
One key gauge of the pace of outflows is “oil on water” in the Gulf, or the volume of oil stored on tankers trapped behind the strait. Levels have dropped from a peak of 184 million barrels on March 22 to around 148 million barrels this week, according to Kpler data, implying an average drawdown rate of roughly 500,000 bpd.
Crucially, that pace has accelerated over the past month. Since the start of May, depletion has increased to around 710,000 bpd, according to ROI analysis. That offers further evidence that flows out of the Gulf, while still constrained, are inching higher.
Exactly which routes these dark tankers are taking remains unclear – as the term “dark” suggests. Many are likely using corridors designated by Iran, which has allowed limited volumes through the strait under bilateral arrangements with Asian governments including Pakistan, India, China and Japan. This underscores the region’s ‌heavy dependence on ⁠Gulf supply. Some vessels may be paying Iran a fee for safe passage.
Other vessels may be taking routes closer to Oman’s coastline, potentially with the tacit or active support of the U.S. Navy, which continues to play a stabilizing role in regional maritime security.
The situation remains fluid and could shift quickly. Iran could tighten its grip on shipping at any moment, particularly if negotiations with the U.S. continue to stall.
Reuters goes on to say that after more than three months of severe economic disruption, every barrel exported offers a lifeline to revenue-starved Gulf producers such as Iraq and Kuwait, as well as desperate buyers in Asia.
However, a sustained recovery will require far greater clarity and stability around the Strait of Hormuz. Producers are unlikely to restart the roughly 11 million bpd of shut-in oilfields without confidence that exports can flow reliably.
A key logistical bottleneck is the slow return of empty tankers to the Gulf. Without steady inflows of vessels to load new cargoes, onshore storage tanks remain near capacity, blocking the restart of production. The crucial rebalancing of laden ships departing and empty ones arriving has yet to materialize at scale.
Shipowners and charterers remain cautious due to persistent risks of vessels becoming stranded, with elevated insurance premiums reinforcing this hesitation.
Even if a political breakthrough officially reopens the strait, the market may never fully normalize. Tehran is pushing to retain control over traffic and impose a tolling system, which Gulf producers view as untenable and could force alternate routes—or even military responses. While the current opaque trading environment offers some marginal relief, the fragmented and dangerous reality suggests any respite may be short-lived.
Still Yesterday the gasoline crack spread cracked down hard, and gas prices at the pump have been retreating nicely—great news for drivers filling up across the country. Current averages show solid downward momentum: Regular: $4.22 (down 2.1¢ from yesterday, 17.1¢ from last week, and a hefty 26.3¢ from a month ago)   Mid-Grade: $4.73 (down 2.2¢ yesterday, 17.0¢ week-over-week)  Premium: $5.10 (down 2.1¢ yesterday, 16.8¢ from last week)  Diesel: $5.38 (down 1.6¢ yesterday, 14.4¢ week-over-week)  E85: $3.30 (down 2.2¢ yesterday, 18.9¢ from last week)
Compared to year-ago levels, prices remain significantly higher, but the short-term trend is clearly consumer-friendly with steady declines across every grade and something many feared would not happen. The retreat in the crack spread is easing margin pressure and helping keep retail prices on a downward glide—exactly what drivers want heading into summer travel season as President Trumps maneuvers of summer blends waivers and oil reserve release and Jones act waivers is helping the market adjust .
Lower pump prices are putting more money back in consumers’ pockets and supporting a bright outlook for fuel affordability in the weeks ahead . Keep an eye on these  Jobs markets report today for more   positive trends—relief is here and momentum is building and if Iran gives up its nukes the recent gas price pain would have been well worth it.
Natural gas prices are flat to lower this morning after a strong surge driven by robust summer demand and blistering LNG export activity. Henry Hub futures are hovering near $3.35/MMBtu, up modestly on the day but consolidating after recent gains. Over the past month, prices have climbed more than 20-22%, reflecting tightening fundamentals as we head into peak summer usage. U.S. natural gas demand is firing on all cylinders this summer. Power burn is on track for record levels, with forecasts calling for around 40.3 Bcf/d — up significantly year-over-year. This is fueled by rising air conditioning loads amid hot weather as well as surging electricity needs from data centers and AI infrastructure. Coal-to-gas switching at power plants as lower prices make gas the fuel of choice (gas share of thermal generation topping 75% in some outlooks).
Blistering LNG exports are adding another powerful layer of demand. U.S. LNG terminals have seen trains come back online and ramp up, with new capacity additions (like Corpus Christi Stage 3 trains and Golden Pass contributions) boosting export potential. U.S. LNG exports are averaging strong volumes and are projected to hit 17.0 Bcf/d this year, with further growth into 2027.
Europe desperately needs the supply. European storage is only around 40-41% full right now — well below historical averages for this time of year and leaving the continent vulnerable heading into the next winter. This low inventory level is driving competition for LNG cargoes and supporting transatlantic flows from the U.S.
Fox Weather is also highlighting factors that could influence demand. With summer heat building across much of the U.S., cooling needs are set to keep power generation elevated. Any sustained hot spells or heat waves will amplify gas burn for electricity, providing additional upside support. On the flip side, milder shoulder periods have allowed for solid storage injections, helping keep a lid on extreme volatility for now.  Recent EIA reports show builds in line with or slightly below expectations, but overall inventories remain supportive (ending injection season potentially above average). This provides a buffer against short-term spikes. U.S. dry gas output continues to rise steadily, but demand growth (domestic + exports) is outpacing it in key periods.
Speaking of coal, the Trump Administration issued an executive order on “clean, beautiful coal” yesterday. President Trump announced a major $700 million federal investment—leveraging the Defense Production Act—to protect 14 existing coal plants and 42 mines, upgrade facilities across key states (including Wisconsin), build two new plants, and fund a new coal export terminal.
This move aims to bolster grid reliability for surging AI/data center demand, safeguard thousands of jobs, keep electricity prices low, and strengthen American energy dominance. It’s another big step toward energy security and putting “America First” in the power sector.
You know obviously with natural gas and energy weather is going to play a big key are we going to cool down or stay hot the best way to find out is to download the Fox weather app with all their very cool 3D maps and all that other cool stuff. You should also stay tuned to the Fox Business Network because really they’re the only network in America that is truly invested in you! You can also sign up for the Phil Flynn trade levels you can call for a market advice or even some good jokes call me at 888-264 5665 or you can e-mail me at pflynn@pricegroup.com