Oil Derangement Syndrome. The Energy Report 04/01/2026

Some forecasts regarding oil price increases amid the conflict in Iran are based on worst-case scenarios and may underestimate U.S. military planning and execution and the willingness of the rest of the world to be held hostage by the Iranian regime. Some of these projections are sometimes based on sound reasoning, other times they just might be described as oil derangement syndrome. Some say on one hand Iran was not an imminent threat but in the next breath say they have the military capability to keep the Strait of Hormuz closed for months or even years.
Yet has the world had enough? Well, we know the United Arab Emirates have had enough. Overnight, oil is lower as the Wall Street Journal reported that the United Arab Emirates is determined to force open the Strait of Hormuz and is willing to join the conflict, as the Gulf state begins efforts to persuade the United States and other nations to reopen the waterway by any means necessary.
This is a sign that countries are not going to sit back and just allow Iran to dictate the future of their economies using terror tactics and apocalyptic threats even as Europe has slow walked what should have been a commitment to keep this international waterway free and clear. As President Trump said to our allies on Truth Social, “You’re on your own”. “All of those countries that can’t get jet fuel because of the Strait of Hormuz, like the United Kingdom, which refused to get involved in the decapitation of Iran, I have a suggestion for you: Number 1, buy from the U.S., we have plenty, and Number 2, build up some delayed courage, go to the Strait, and just TAKE IT,” he wrote on Truth Social Tuesday.
And we do have plenty. There is not a refinery in the US that can’t get oil and just yesterday the American Petroleum Institute (API) repoted that crude supply increased by 10. 623 million barrels last week. That was buffered by crude imports from the rising oil producing star, Venezuela, that according to the EIA rose to 200.000 barrels a day in January from 137,00 barrels in December.
Today President Donald Trump said that he is considering pulling the U.S. out of NATO and described the Western alliance as a “paper tiger” in an interview with The Telegraph published on Wednesday, after days of lashing out at the group’s reluctance to help the U.S. in its conflict with Iran and reopening the Strait of Hormuz.
And in yesterday’s session the oil derangement syndrome was put on hold after oil reversed hard, dragging stocks higher after two reports that changed the mood.
In A New York Post interview, President Trump declared that his primary mission in the conflict with Iran was “to prevent Iran from getting a nuclear weapon,” adding triumphantly, “I succeeded.” The President said that the U.S. had achieved its core objective on Iran’s nuclear capabilities, described the current Iranian regime as significantly weakened, and suggested the war could wind down soon—potentially within 2-3 weeks.
On the other side, Iranian President Masoud Pezeshkian responded with a guarded olive branch, stating that Iran has “the necessary will to end this war” but requires firm guarantees—specifically security assurances that it will not be attacked again, along with protections for Iran’s dignity, interests, and people. He reiterated the position in communications with EU officials and during cabinet remarks, framing any end to hostilities as conditional on preventing a repeat of the aggression.
Markets reacted as oil prices plunged following the signals: Brent crude futures dropped more than 2-3% in a session (trading around $104/bbl or lower at points), while WTI fell toward $101/bbl or below, trimming some of the sharp war-driven and oil derangement syndrome premium.
The news caused equities to soar on reduced geopolitical risk and hopes for a quicker resolution that could restore more stable oil flows through the Strait.
Energy prices, reflected in the curve, remain optimistic about the quick end of the war, although Kepler cautions that futures are lagging behind fundamentals.
According to their warning, over 133 million barrels of crude have already been sidelined from the Middle East, and cumulative disruptions could exceed 250 million barrels.
They warn that if flows are not restored, this figure may reach 400 million barrels by mid-April and potentially 600 million barrels by the end of April.
Others warn that even if the war ends today production may not be restored quickly or in some cases ever. Yet are these predictions just doom and gloom or is it a reality.
There is little doubt that Kepler’s numbers are grounded in reality based on their vessel-tracking data, but they’re a worst-case “if flows don’t resume” projection rather than pure doom-and-gloom hype.
It’s true that Iran’s so called effective closure of the Strait of Hormuz has been a major supply shock in the oil market.
Yet sometimes markets are not stagnated and the ability of Iran to drag this out is not giving the US military enough crude for an effective campaign against an adversary that has been trying to prepare for this war for 46 years.
Not to mention the increased US supply to the global market, Saudi infrastructure use, rerouting, SPR releases, and OPEC+ actions are helping offset the impact It also assumes that President Trump cannot  shame our allies into fulfilling their commitments and responsibilities when it comes to reopening this international waterway.
It’s important to remember that it is not the year 1990 and the fact that US oil production is soaring to record levels, holding strong at about 13.6 million barrels per day in 2025 and continuing robustly into 2026.
US drill baby drill and reduced and smart US regulation has provided a powerful non-OPEC supply cushion for the global market.
The abundance of light sweet crude from the US is helping to fill the gap left by some Middle East disruptions—even if Asian refineries tend to favor heavier crude types.
According to the EIA, US output is not only steady but edging up, regardless of earlier forecasts predicting lower prices. With prices climbing, producers are now even better positioned to hedge and ramp up production, fueling optimism for continued growth and stability in the energy sector.
Saudi’s East-West pipelines are stepping up. The kingdom has pushed its powerful 7 million bpd Petroline (East-West pipeline) to full throttle, moving oil straight from Gulf fields to the Red Sea port of Yanbu—completely sidestepping Hormuz.
Crude exports through Yanbu have soared to around 5 million bpd, plus another 700,000 to 900,000 bpd in refined products, with fleets of tankers now being loaded there.
Prior to the conflict, most of Saudi Arabia’s 7 million bpd exports went through Hormuz; now, the pipeline operates at full capacity and ensures steady delivery. The UAE is also routing extra exports via its Fujairah terminal outside Hormuz. These actions sustain oil flows and help stabilize global markets.
Rerouting ships to Red Sea ports like Yanbu and using pipelines has helped somewhat, while limited traffic still moves through Hormuz and some tankers take longer routes around Africa. Floating storage provides a temporary cushion but isn’t a full solution but is a gap and a reason while opal both Brent and WTI are far below the first weekend spike high the first weekend of the war.
And while we have to admit that restarting oil production that has been shut in due to the strait closure could take weeks or months, other steps like OPEC+ raising output, record breaking SPR  releases, and high inventories will work to keep prices from hitting those crazy levels that some are predicting. Persistent issues in the Strait of Hormuz would be partially cushioned by strong buffers: robust U.S. production, Saudi Arabia’s rerouting options, and OPEC+ spare capacity.
And while the markets are on edge  it is not in panic mode, like some with oil derangement syndrome.
Yes, a prolonged conflict would bring some but not all worst-case projections into focus, but a swift resolution would see a major oil selloff initially. Meanwhile, Iran’s capacity to maintain a shutdown of the Strait would weaken hour by hour.
Yesterday, some in Iran continued to lash out, with crazy threats against US business interests, which resulted in a colorful exchange with the President that went like this: REPORTER: Iran threatened US tech companies.
TRUMP: With what? What did they threaten them with? BB guns? They don’t have much left to threaten. REPORTER: My question for you is— TRUMP: YOU made a statement. What did they threaten them with? I don’t know. Tell me. How did they threaten them? REPORTER: All I know is that they threatened them, sir TRUMP: What does that mean?  REPORTER: Fair enough TRUMP: They said something nasty? REPORTER: Are you helping the companies?  TRUMP: You don’t even know what the threat WAS! What was the threat? I haven’t heard it. What was the threat? Did they say they’re going to blow them up? You know what they’re not going to do? They’re not going to hit them with a nuclear weapon!
I expect ongoing volatility in the market. Right now, the conflict is causing most of the movement on the near-term side, while the longer-term outlook indicates the war may soon be resolved. Some investors are looking at the stock market or metals as alternative ways to manage headline risk, but it’s clear that news events will continue to be a major driver. Call me to open your account to get involved. Phil Flynn 888-264-5665. Taking a broader perspective, oil prices appear likely to trend lower overall. We will look at today’s EIA for inventories and exports as well as production to see if there’s any early impact. One would expect to start seeing US production numbers start to trend up and exports surge towards record highs.
Late breaking  IEA Chief Birol: Considering further release of strategic reserves, ‘if we think there is a need for crude oil or products, we may intervene.’ IEA Chief Birol: Biggest problem is lack of jet fuel and diesel, already affecting Asia and coming to Europe in April-May IEA Chief Birol: Oil loss in April is expected to be twice as high as in March IEA Chief Birol: This crisis is worse than the two oil crises of the 1970s and the loss of Russian gas in 2022 put together/ IEA Chief Birol: More than 12 million bpd of oil supply has been lost so far due to the Middle East crisis ( Good Thing US is pricing over 13 million a day .   Despite the Iran war, the first LNG deliveries from Oman to Germany have started – German magazine C

Natural gas bulls are hoping for a return to winter, but it does not look like that is in the cards. Fox Weather reports that, “The Plains and Southeast are getting a taste of summer as the heat wave that has created stifling temperatures in the Southwest continues to push east. Since early March, a historic heat dome has shattered temperature records across the Southwest, bringing temperatures 30 to 40° above average from California to Colorado.
Yet Fox Weather says, “Days of severe weather are possible for much of the Central U.S. next week as the calendar flips to April, with an active weather pattern expected to take hold across the Southern Plains, Midwest and Ohio Valley. This pattern change is right on cue, as April is historically when spring severe weather season begins to intensify across the middle of the country — April averages the second-most tornadoes behind May.
According to the FOX Forecast Center, severe storms could develop beginning Tuesday evening from Missouri through Indiana and Ohio. Meanwhile, a second severe weather threat could develop next weekend, signaling what the Forecast Center said appears to be just the start of a prolonged stormy pattern. “By late Tuesday, a developing area of low pressure moving through the Central Plains will begin interacting with a surge of warm, humid air coming north from the Gulf.”  Rain and thunderstorms could move into the Northeast and New England by Wednesday and Thursday as the system charges east.
Bottom Line is that heating demand looks to be non-existent and cooling demand will be high but not enough to overcome surging us production.
Download the Fox Weather ap to keep up with the latest and stay tuned to the Fox Business Network! Invested in you!  Also call me at 888-264-5665 or mail me at pflynn@pricegroup.com. I will be traveling April 3rd till the 16th so reach out to my team if you need me.