Oil prices are headed for their biggest monthly drop in a year on the makings of an Iran deal, as many oil analysts and Trump haters are shocked at the success of this administration’s management of global oil markets during a time of unprecedented supply disruptions.
Oil prices are down again today as the Wall Street Journal reports that a potential breakthrough in U.S.-Iran negotiations is gaining momentum, sparking fresh hopes for de-escalation in the Middle East and more stable energy flows. What will the Trump haters do if he opens the Strait Of Hormuz! What if he secures peace in the Middle East! Oh No!!! They must hate that Treasury Secretary Scott Bessent delivered an optimistic update from the White House on Thursday, saying the two sides are getting close to a deal.
“We perhaps have the makings of a deal here,” Bessent told reporters, noting that both countries have been actively swapping proposals. “Everything depends on what the president wants to do, and President Trump is not going to make a bad deal.” This is as Iran is trying to save face with Iran’s Parliament’s National Security Committee controlled by hold put hardlines say that” we do not intend to we transfer enriched uranium to a third country.” Whether, they intend to or not that is what is going to
Bessent outlined the key U.S. requirements: Iran must dispose of its highly enriched uranium, commit to never pursuing a nuclear weapon, and fully reopen the Strait of Hormuz — conditions that would significantly ease tensions in one of the world’s most critical energy chokepoints.
Oh, Trump Critics say that even if the Strait Opens it will take years to get back to normal because of Trumps War! Yet Amena Bakr oil expert and favorite of the Opec Cartell says that “Once the strait opens, we’ll find out the true extent of the damage caused by the war on the Gulf’s energy infrastructure. I’m expecting a fast recovery in production from Saudi Arabia and the UAE (within 3-4 weeks), other countries will take months to recover”
Now according to Axios and U.S. officials, the framework under discussion points toward an initial 60-day agreement, starting with a mutual unwinding of restrictions in the Strait over the first 30 days. If successful, this would serve as the first phase of a broader, longer-term arrangement aimed at strictly limiting Iran’s nuclear program for decades.
This positive momentum comes despite some remaining hurdles. Iranian officials, via the semiofficial Tasnim news agency, indicated the final text isn’t finalized yet and that any announcement would come through Pakistan, the main mediator. Tehran is also pushing for unfrozen assets, continued influence over Strait management, and a durable ceasefire in Lebanon.
Still, the market is clearly pricing in optimism. Lower oil prices today reflect trader hopes that a diplomatic off-ramp is within reach — good news for global energy stability and consumers.
President Trump says correctly that he is holding all the cards and keeping his cards close. At a recent cabinet meeting, he emphasized that any Iran deal should include Arab nations like Saudi Arabia joining the Abraham Accords. He also made clear he’s in no rush, even with midterm elections on the horizon.
Trump detractors were also dismayed that yesterday’s EIA Petroleum Status Report was largely bearish for prices.
inventories fell by 3.3 million barrels to 441.7 million barrels for the week ending May 22, 2026. This draw was smaller than the previous week’s 7.9-million-barrel drop but still left stocks 2% below the five-year seasonal average.
We even saw distillate (diesel) inventories decrease by 2.1 million barrels (though the user’s note mentioned an increase — actual data shows a draw, which was a surprise in the other direction for some). inventories dropped 2.6 million barrels and sit 6% below the five-year average.
Yet some still worry that massive SPR releases (part of the ongoing 172-million-barrel authorized release, with tens of millions already drawn in recent months) and record-low storage at Cushing, Oklahoma, remain key issues. Cushing stocks fell sharply by ~2.8 million barrels to just 23.0 million barrels — among the lowest levels in recent years and well below comfortable operational thresholds.
Despite the bearish supply signals, the market still cheered the report in bullish fashion, with oil prices rallying on the data. This reflects ongoing geopolitical concerns, strong implied demand, and the view that underlying fundamentals remain tight even as commercial inventories show some draws.
The Weekly Storage Report showed a build of just 92 Bcf for the week ending May 22, 2026 — lighter than many expectations. That brings working gas in storage to 2,483 Bcf, which is 21 Bcf above last year and 144 Bcf above the five-year average of 2,339 Bcf. Injections have been running solid overall, but this lighter-than-expected number highlights how demand is already starting to bite. EIA’s (May 2026) sees U.S. dry natural gas production averaging 110.61 Bcf/d in 2026, with marketed production in the Lower 48 around 118.9 Bcf/d. Consumption stays resilient thanks to power demand and exports, with Henry Hub eyed near $3.50/MMBtu for the year.
State-by-State Highlights: Production remains strong across the major basins. The Permian (Texas/New Mexico) leads associated gas growth with forecasts around 29.2 Bcf/d in 2026, even with some pipeline constraints at Waha. Haynesville (Louisiana/Texas) is gas-focused and set for gains on LNG pull. Appalachia (Pennsylvania, Ohio, West Virginia) keeps steady output with an eye on any winter risks ahead. Warmer trends hitting the South and West — think Texas, California, Florida — are already cranking up early cooling loads, while the Midwest and Northeast see more mixed shoulder flows. Supply is growing, but regional bottlenecks and rising demand keep the market on its toes.
Summer cooling demand is ramping up as the shoulder season turns hotter. Forecasts point to above-normal temperatures across key regions, especially the western and southern U.S., which should boost air-conditioning use and natural gas demand for power generation. Even a few degrees can add serious Bcf/d to consumption. The app shows an early push of summer heat with potential heat waves that could tighten things up fast. A shift of just a few degrees can move the market
The near-term pressure was there, but hotter setups, strong LNG exports, and power demand from data centers and AI are lining up. Inventories might look above average now, but strong summer draws could tighten us into next winter. Technicals are holding support with short-covering potential on any heat confirmation, in gas weather is king, and the bulls just got a nice tailwind.
