Energy Markets Navigate Hormuz Standoff as U.S. Strikes Iranian Tankers

U.S. forces struck two Iran-flagged unladen oil tankers in the Gulf of Oman on Friday , escalating tensions even as Washington says peace talks could yield results within hours. U.S. Central Command announced that fighter aircraft disabled the M/T Sea Star III and the M/T Sevda by firing precision munitions into their smokestacks after the vessels attempted to enter an Iranian port . Iran's top joint military command said 10 sailors were wounded in the strike, and five more were missing .

The ongoing stifling of tanker traffic has triggered a global energy supply shock, causing a surge in oil prices and a cascade of other effects . According to market data, WTI crude traded at $71.50 per barrel on Friday, up 0.6%, while Brent crude stood at $75.20, up 0.5%. The attacks came as Iran was reportedly reviewing a U.S. proposal that would end the war and tee up further nuclear talks, with Secretary of State Marco Rubio saying Friday morning that he expects Iran to respond to the proposal later in the day .

LNG Tankers Go Dark to Evade Blockade

Abu Dhabi National Oil Co. has managed to keep a trickle of liquefied natural gas exports moving through the Strait of Hormuz by concealing tanker locations, with at least two tankers that loaded at Adnoc's Das Island facility recently going dark to carry shipments out of Hormuz , according to Bloomberg vessel-tracking data. That contrasts with neighboring Qatar, which hasn't shipped any LNG through the waterway since the US and Israeli strikes on Iran in late February led to the strait's closure, and Qatar was forced to shut its massive Ras Laffan LNG export facility in March after attacks by Iran .

"Adnoc hasn't declared force majeure, unlike QatarEnergy," said Antonia Syn, a gas and LNG research analyst at Rystad Energy, noting that invoking the clause "formally reduces commercial pressure to attempt risky transits, and Adnoc appears determined to avoid fully conceding that gulf LNG is stranded" . Hormuz has remained virtually shut as the US and Iran struggle to reach a peace agreement, with both sides enforcing a de facto blockade on a waterway that normally handles about a fifth of global LNG supply .

China's Energy Imports Plunge to Four-Year Low

China's oil imports fell to the lowest level in almost four years in April as the closure of the Strait of Hormuz choked off supplies to the world's largest oil importer, with crude oil imports falling 20% in April to 38.5 million metric tons compared to a year earlier, hitting their lowest level since July 2022 , according to Reuters citing customs data released Saturday. China imports roughly half of its crude oil from the Middle East, where the closure of the strait has slashed the number of tankers carrying oil and refined products to the world .

Natural gas imports also fell by 13% to 8.42 million tons, although the data does not separate seaborne liquefied natural gas (LNG) from gas piped overland, and China imports significant quantities of LNG from the Middle East Gulf . Despite the disruption, Beijing has long worked to diversify supply and critically, it also planned ahead, amassing enough oil reserves to last at least three months between commercial and national strategic reserves, analysts estimate, giving the Chinese economy significant breathing room .

Canadian Oil Sands Face Policy Headwinds Despite Strong Earnings

Cenovus Energy just posted one of its strongest quarters on record, but its CEO used the earnings call to deliver one of the starkest warnings the oil sands industry has heard in years, with Jon McKenzie telling analysts on Wednesday that Canada's national conversation around oil sands development has become "myopically focused on the climate agenda" . Cenovus reported Q1 2026 net earnings of C$1.57 billion, up 83% year-over-year, with record upstream production of 972,100 BOE/d and a 10% dividend hike .

Only one new greenfield oil sands project has been approved and built in Canada since 2013, even as global demand for oil has continued to grow, and what growth Cenovus and its peers have managed has come through acquisitions and wringing more out of existing assets — not by breaking new ground . McKenzie said that the result of this myopic dialogue "is that we have created a set of national policies and regulations that make resource development and investment in Canada uncompetitive with the rest of the world," adding that recent geopolitical turmoil has underscored how important energy security is to national and economic security, presenting an opportunity to Canadians "if they choose to seize it" .

Natural Gas Markets Eye Storage and LNG Demand

Operators injected 63 Bcf of natural gas into storage for the week ended May 1, the US Energy Information Administration (EIA) reported Thursday morning, with the result coming in below expectations and historical norms, providing natural gas futures a midmorning bump . According to market data, Henry Hub natural gas traded at $3.25/MMBtu on Friday, down 2.4% from the previous session.

Natural Gas Intel reported that utilities injected 63 billion cubic feet of gas into storage in the week ended May 1, below forecasts of 74 bcf and lower than both last year's 104 bcf increase and the five year average of 77 bcf, while production in the Lower 48 states is also trending lower, with output expected to fall to a one week low as weak spot prices have prompted producers including EQT Corporation to scale back supply while waiting for stronger prices .

The Financial Times noted that Hormuz has remained virtually shut as the US and Iran struggle to reach a peace agreement, with both sides enforcing a de facto blockade on a waterway that normally handles about a fifth of global LNG supply , creating ripple effects across global gas markets even as U.S. domestic storage levels remain above seasonal averages.