Guradians of the Galaxy. The Energy Report 07/14/2026

Oil prices are still surging on renewed supply concerns after President Trump said the U.S. was reinstating the blockade of Iranian ports and would charge a 20% security fee on all cargo shipments passing through the Strait of Hormuz and formally notified Congress last week that the U.S. has resumed military strikes against Iran, providing the Pentagon an extra 60 days to utilize U.S. forces in the U.S. Central Command (Centcom) theater without congressional approval. And while the markets focus in the short term is the drop in traffic in the Strait of Hormuz and Iran’s attacks on oil tankers and attacks on Oman, and Houthi attacks on Saudi Arabia Yemen.   Yet the probability that the US will become the Guardian of the Strait of Hormuz really means that the US will become the Guadian of the Energy Galaxy and have more influence on energy that any country in the history of the world.
Just consider the fact that the  US is the world’s #1 crude oil producer, with crude plus lease condensate averaging a record 13.6 million barrels per day (bpd) in 2025, up from 13.2 million bpd in 2024. That output stands about 40% higher than the next largest producers, Russia and Saudi Arabia. The EIA forecasts US production will hold near 13.7 million bpd in 2026 before rising to 14.2 million bpd in 2027, with the Permian Basin alone contributing around 6.6 million bpd.
The United States has also become the world’s #1 oil exporter. In May 2026, US crude and petroleum product exports reached approximately 10.5 million bpd, surpassing Saudi Arabia at about 5.9 million bpd and Russia at about 7 million bpd for the third consecutive month. This marks a sharp increase from 6.6 million bpd in 2025, and April 2026 set an overall record of 13.6 million bpd in total petroleum exports amid disruptions in the Strait of Hormuz.
Success in Venezuela further amplifies this dominance. Following the ouster of Maduro, US-led efforts and involvement from American companies like Chevron have helped revive output, with production rising from under 1 million bpd earlier to targets of 1.3 million bpd or more in 2026 (30-40% growth). Combined with America’s own record production, this Western Hemisphere energy bloc delivers added supply stability — allowing the US to command a well-deserved “guardian premium” on oil through reliability, security guarantees, and market leadership.
Total US liquids production now stands at roughly 22 million bpd — nearly triple the level from 2000 — giving American shale operators the flexibility to respond rapidly to global supply needs.
On the natural gas front, the US has emerged as the undisputed superpower.
It is the top global LNG exporter, setting a record of more than 100 million tons in 2025 and positioning itself to roughly double those volumes by the early 2030s. Dry natural gas production continues to grow strongly to serve both robust domestic demand and international markets in Europe and Asia, with many outlooks projecting 20-40% growth by 2050.
These achievements align directly with President Trump’s vision: the US secures safety and stability around the world, and in return, it gets paid back through stronger energy markets, export revenues, and strategic advantages. The momentum is clearly on America’s side.
Of course, we also have to respect what the markets are fearing. Global oil supply buffers are dangerously thin. The U.S. Strategic Petroleum Reserve has plunged to around 319.5–325.7 million barrels — the lowest level since 1983 — after weeks of draws tied to efforts to offset shortages from the Iran conflict.

Total U.S. inventories (commercial + SPR) have dropped sharply since late February, hitting multi-decade lows around 734–743 million barrels in recent weeks. Global inventories are similarly stretched, with limited cushions left in key regions.
Product markets are flashing even louder warning signs. Crack spreads have surged on fears over refined products, especially diesel. U.S. distillate stocks sit well below seasonal norms (recently around 106–108 million barrels, roughly 12 million below the five-year average), while refining margins for diesel and the 3-2-1 crack have climbed to multi-week or even record highs amid capacity constraints, lingering Middle East disruptions, and strong summer demand. Longer-term supply issues for distillates, ongoing refinery maintenance, and tighter global product balances are keeping those cracks elevated even as crude eases.
And while the doom-and-gloom crowd is out there saying “we told you so” and warning of the mother of all price spikes, the back end of the oil curves is actually telling a more nuanced story.
It has softened into modest contango in the near term — with prompt prices dipping relative to later months — signaling confidence (just like early in the conflict) that U.S. military posture and diplomacy can help rein in Iran’s disruptions and allow flows to normalize over time.
While the front end of the curve is soaring, the curve show that the market isn’t fully buying the panic; it’s pricing in eventual relief on the supply side while products stay tight.
Yet the markets is saying that Iran’s days as a market disruptor may be numbered. Its Houthi proxies continue to inflame tensions by firing missiles at Saudi Arabia, attacking vessels in and around the Strait of Hormuz, and threatening the energy arteries that keep the global economy moving.
But each escalation only further isolates Tehran, strengthens the case for a sustained U.S.-led security presence, and keeps a risk premium alive while the market waits for order to be restored. The front-end fears in crude and products are real, especially in diesel, but the curve’s structure still points to longer-term resilience. Volatility is not over — but Iran’s leverage is fading.
As we have said before we believe that oil prices were going to come down his words are more often selling events when oil was well above 100 we felt pretty confident that at some point we would fill the gap from the over any night of the invasion that did happen last week and we are a far above that bottom. And based on the back of the curve we still believe that oil will settle in a trading range somewhere around $76 a barrel in the front end obviously we can see some big spikes based on the fear but the reminder here is to be ready to trade bold sides.
Nat gas sure knows how to beat the heat! It’s called production. Also, in the meantime at a key LNG export facility. at gas sure knows how to beat the heat! It’s called production. Natural gas markets continue to navigate a classic summer tug-of-war: robust U.S. production absorbing demand spikes from scorching heat, while strong LNG exports provide a structural floor. Despite a persistent heat dome driving power burn higher, ample supply and storage builds have kept prices in check recently, with August futures recently trading around the $2.80–$3.30 range amid milder near-term outlooks and maintenance impacts.
Production is still doing the heavy lifting. Lower-48 dry gas output remains near record levels around 109.7–112.5 Bcf/d, up roughly 3–4.7% from a year ago, and the EIA now sees 2026 output near 111 Bcf/d, led by the Permian. That supply is helping absorb the summer demand surge. At the same time, LNG exports remain a key demand anchor, with feedgas to major U.S. export plants running around 17.3–19.7 Bcf/d. That keeps domestic balances tighter than the headline production number suggests, especially as projects like Mexico’s ECA LNG Phase 1 and Golden Pass LNG ramp up.
Storage is still comfortable, with recent injection estimates near 44 Bcf and inventories above average heading into late summer. Power burn has jumped with the heat, reaching 40–45+ Bcf/d in peak weeks, but the market still looks manageable unless the heat sticks around longer than expected. Futures have been volatile, supported by heat and LNG demand.
Fox Weather reports that a broad heat dome recently covered much of the central and eastern U.S., with another building in the West. That kind of heat drives cooling demand and power-sector gas use, especially after late June and early July brought widespread 90s, 100s, and dangerous heat indices across much of the country.
Now the pattern is shifting. The East is getting some relief with storm chances, while a new heat dome builds over the West, Rockies, Southwest, and Plains. Triple-digit heat is still possible in places like Phoenix and Las Vegas, and warmer-than-normal trends should keep power demand elevated through at least mid-to-late July.
The bottom line: sustained heat could tighten balances if injections disappoint, but strong production and solid storage are still cushioning the market.
Meanwhile, key LNG export facilities like Golden Pass in Texas and ECA LNG in Mexico show how U.S. gas is increasingly moving into global markets, supporting demand and reinforcing America’s export strength. Strong domestic production remains the ultimate heat-beater. For the next move, watch storage reports, verified heat, and LNG export flows.
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Thanks,

Phil Flynn

Senior Market Analyst & Author of The Energy Report

Contributor to FOX Business Network

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