LNG Carriers Test Iran's Strait of Hormuz Blockade as Oil Spill Spotted Near Key Export Hub

Shipping traffic through the Strait of Hormuz, a major maritime choke point for world energy trade, has been largely blocked by Iran since 28 February 2026, when the United States and Israel launched an air war against Iran , but this week brought fresh attempts to break the impasse. On 4 May, Trump launched Operation Project Freedom, a US Navy mission to escort merchant ships out of the Gulf, though the announcement came as maritime traffic through the strait faced severe restrictions .

According to the Financial Times, Pakistan cancelled plans to buy LNG cargoes on the spot market because it expected Gulf shipments to resume. On 6 May, Trump paused Project Freedom because of "great progress" toward a possible agreement , though almost no shipping has used the strait and it remains effectively closed , according to a House of Commons Library briefing.

The stakes couldn't be higher. Around 20% of global petroleum and 20% of liquified natural gas traverses the strait each year, with pre-conflict vessel numbers around 3,000 per month now standing at around 5% of this level . Crude oil prices experienced one of the most volatile trading weeks of 2026 during the period of May 3 through May 7, with June West Texas Intermediate crude futures swinging violently between a high of $107.46 and a low of $88.66 before stabilizing near $97 a barrel , OilPrice.com reported.

Satellite Images Reveal Suspected Oil Spill Near Iran's Main Export Hub

A suspected oil spill covering dozens of square kilometers of sea near Iran's main oil hub of Kharg Island has been seen on satellite imagery this week, with the likely spill appearing on images as a grey and white slick covering waters to the west of the 8-kilometer long island , Arab News reported Friday.

Leon Moreland, researcher at the Conflict and Environment Observatory, estimated that it was covering an area of approximately 45 square km , calling it visually consistent with oil. Louis Goddard, co-founder of consultancy Data Desk, which focuses on climate and commodities, agreed that the images likely showed an oil slick, which he said was potentially the largest to occur since the start of the US-Israel war against Iran 70 days ago .

Kharg Island, where US forces said they had destroyed military targets earlier in the war, is the hub for 90 percent of Iran's oil exports, much of which is bound for China . The cause of the possible spill and the point of origin remain unknown, according to Reuters, with Iran denying the reports and claiming the slick originated from European tanker waste.

U.S. Natural Gas Storage Levels Remain Elevated Despite Smaller Build

In domestic energy markets, working gas in storage was 2,205 Bcf as of Friday, May 1, 2026, according to EIA estimates, representing a net increase of 63 Bcf from the previous week and standing 75 Bcf higher than last year at this time and 139 Bcf above the five-year average of 2,066 Bcf .

US natural gas futures climbed toward $2.78 per MMBtu after the Energy Information Administration reported a smaller than expected storage build, with utilities injecting 63 billion cubic feet of gas into storage in the week ended May 1, below forecasts of 74 bcf , according to Trading Economics. 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 changes in spot natural gas prices for Saturday-Monday delivery were mostly modest outside of West Texas, where prices plunged amid strong production, weaker LNG demand tied to maintenance and soft shoulder season weather . The Permian Basin's Waha hub has been particularly hard hit, with Waha fixed price falling to -$5.69/MMBtu for the prompt month, June, as of May 1, while Waha basis also moved lower over the past week, settling Friday at -$8.25/MMBtu, compared to Henry Hub finishing the week at $2.78/MMBtu for June .

U.S. Drillers Add Rigs for Third Consecutive Week

Crude Oil Rigs in the United States increased to 408 in May 1 from 407 in the previous week , according to Baker Hughes data. The U.S. increased by 1 last week, resulting in a total count of 548 rigs , marking the third consecutive week of rig additions, per a Reuters headline.

The modest uptick comes as WTI crude futures swung violently between a high of $107.46 and a low of $88.66 before stabilizing near $97 a barrel by the end of the week . According to market data, WTI Crude traded at $71.50/bbl on Friday, up 0.6%, while Brent Crude stood at $75.20/bbl, up 0.5%.

U.S. and South Africa Hold Talks on Critical Minerals Despite Tensions

Despite tense bilateral relations, the United States and South Africa held this week their highest-level meeting so far this year to discuss potential resource deals in critical minerals, the Financial Times reported on Friday, quoting attendees of the meeting in Johannesburg .

The two countries have been in tense relations since U.S. President Donald Trump took office for his second term last year and accused South Africa of "white genocide," however, the Chinese grip on the global critical minerals market seems to have prompted the U.S. to seek opportunities for resource deals in South Africa, which produces minerals including manganese, vanadium, platinum, and chromium , OilPrice.com reported.

China holds a 59% share of the mining of rare earths, 91% in refining, and a whopping 94% in magnet manufacturing , the International Energy Agency estimates. Around 25 officials from both countries met in Johannesburg on Wednesday to discuss minerals co-operation, the highest-level meeting to take place between the estranged countries this year , the Financial Times reported.

The talks remain at an early stage but signal Washington's broader push to diversify critical mineral supply chains away from Chinese dominance, particularly as Western nations race to secure materials essential for defense systems, electric vehicles, and renewable energy infrastructure.