The oil markets — and markets around the globe — are closely watching whether a deal with Iran is imminent and when the Strait of Hormuz will be fully reopened. Energy markets got a solid peace dividend as President Donald Trump announced major progress toward a US-Iran agreement to extend the fragile ceasefire and reopen the Strait of Hormuz. Trump said “final points” of the deal have been approved by all parties, canceling planned U.S. strikes and signaling a memorandum of understanding could be signed as soon as this weekend, possibly in Europe or Geneva.
Trump called it a move toward “a great settlement of the war with Iran,” with negotiators trading drafts for a 60-day ceasefire extension, reopened shipping lanes, release of some frozen assets, and groundwork for broader nuclear talks.
Iranian officials acknowledged progress and ongoing top-level review but pushed back on claims of a finalized deal, calling it speculation while weighing sanctions relief and reconstruction elements. Israeli PM Benjamin Netanyahu voiced full agreement with Trump that Iran must never get nuclear weapons, stressing Israel is not a direct party to the deal but reserves its right to self-defense.
The positive momentum is easing geopolitical risk premiums. pulled back on hopes that a deal will stabilize flows through the Strait, reduce supply risks, and open the door to longer-term de-escalation.
Yet the larger question may be this: if we do indeed have a deal with the Iranian regime, will this new version be better than the one under the previous leadership?
Hopefully the new Iranian Regime will be better than the version under the late Ayatollah Ali Khamenei, Iran’s Supreme Leader and the late Ali Larijani — Secretary of the Supreme National Security Council (often described as a de facto leader or top powerbroker after Khamenei’s death); killed in an Israeli airstrike around March 17, 2026, along with a son and deputy. And the late Esmail Khatib, Intelligence Minister; killed in an Israeli overnight airstrike (reported around March 18). And the late Ali Shamkhani— Senior adviser, Secretary of the Iranian Defense Council, and key figure in security/nuclear policy; killed in the initial February 28 strikes. And the late Gholamreza Soleimani — Basij paramilitary force commander; killed in the same March strikes as Larijani. And the late Mohammad Pakpour — IRGC Commander-in-Chief; killed in the initial strikes.
A deal would likely require Iran to abandon its nuclear ambitions and end its role as a state sponsor of terror. That would also require a sharply different leadership approach from the previous regime—an outcome that would mark a clear improvement.
Of course, it also raises the question: how low can oil prices go, and is it too little too late to undo the damage from the closure of the Strait of Hormuz as we get an assessment of damage to infrastructure and a sense of how much shut-in production can come back? Regardless, this could be a new world compared with what we had before the war. We could see a peace dividend, and we could get a production surge as global oil producers try to regain market share from the U.S. America Tops the World in Oil Exports: The U.S. has officially become the world’s No. 1 oil exporter at approximately 10.5 million barrels per day in May, surpassing Russia at 7 million bpd and Saudi Arabia at 5.9 million bpd. This is a stunning reversal from decades of dependence on Middle Eastern oil and the 1973 embargo. Thanks to the shale revolution and private-sector innovation, America is now dictating the global energy order.
U.S. energy dominance is on full display as reports confirm the U.S.-Iran conflict has disrupted Saudi exports since February, while Ukrainian drones and U.S. sanctions have hammered Russian flows. That vacuum has been quickly filled by a surge of American barrels flooding the market. Washington now wields a powerful new strategic lever — energy exports — to complement its military and financial dominance. As one analyst put it, countries relying on U.S. crude and distillates are clearly feeling that leverage.
And has forever changed and its grip on the market is fading with the UAE on its own and while U.S. production has nearly tripled since 2000, now running at roughly 22 million barrels per day, while Saudi and Russian output has stagnated or declined.
The UAE’s exit from OPEC after nearly 60 years delivers another major blow to the cartel. President Trump has long highlighted OPEC’s market manipulation — today, its market forces, not quotas, that are setting the tone. When prices rise, American drillers ramp up supply. When prices weaken, they adjust efficiently. That’s classic American capitalism delivering results and keeping markets balanced.
Europe now takes 47% of U.S. oil exports this year (up sharply from 37% pre-Ukraine war). Asia is also increasingly turning to reliable American supply. EU officials who once celebrated the U.S. shale boom as a smart alternative to Russia and the Middle East are now voicing concerns about over-reliance on American producers — particularly amid ongoing trade tariff and green regulation tensions. Moscow, for its part, is openly frustrated by America’s rising energy clout.
This export dominance is driven by unmatched U.S. innovation, abundant resources, and a pro-production policy environment that rewards efficiency and scale. American producers are well-positioned to capture growing global market share, deliver energy security to allies, and generate strong returns for shareholders. With the rest of the world facing disruptions and constraints, U.S. energy remains the bright spot — powering economic strength at home and strategic influence abroad. The bottom line: America is not just back in the energy game — it’s leading it. Expect continued strength in U.S. production, exports, and related equities as this structural shift plays out.
In my view, this is broadly bearish for oil. If the market gets through the weekend with the deal intact, prices could fall back into the $60s and fill the gap. Still, caution is warranted. Previous peace-deal hopes have fallen apart, though this time may be different because the U.S., Iran, and Israel all appear to be signaling that an agreement is largely in place. Even so, traders may begin questioning whether production can return as quickly as expected or whether the Strait of Hormuz will reopen on schedule, especially if the process could take as long as 30 days. felling storms and summer heats from Fox Weather and yesterday’s EIA inject that told traders it’s time to try to beat the heat.
Mother Nature is cranking up the AC and throwing some curveballs, while the latest storage numbers are giving the market a mixed message. Yesterday’s EIA storage report showed a 108 Bcf injection for the week ending June 5—bigger than the ~101 Bcf consensus and above the five-year average. Stocks now sit at 2,686 Bcf, about 151 Bcf (6%) above the five-year norm and just a hair below last year’s level. That’s a solid build heading into peak summer demand, but it didn’t exactly cool off the bulls. Why? Because the heat is on, and traders are betting we’ll burn through that surplus faster than a Midwest July BBQ.
We’re seeing early-season heat waves gripping the East Coast, with highs in the mid-90s and heat indices pushing over 100 in spots along the I-95 corridor. Warmer-than-normal temps are forecast across the West, Southwest, Midwest, and parts of the East through mid-June and beyond, driving up power demand for cooling. Add in potential storms from shifting patterns (hello, possible Super El Niño influences), and you’ve got the recipe for volatile demand spikes. Power generation from nat gas is already climbing, and the real sizzle of summer hasn’t even fully arrived yet.
July futures have been dancing around recent levels, with support from the heat outlook offsetting the bearish storage print. Spot prices have edged higher lately, and we’re watching for continued power burn as temps stay above average. Production remains strong (thanks to associated gas from oil plays), and LNG exports are a wild card, but domestic cooling needs could tighten things up quicker than expected if the heat dome lingers.
