Oil Hits $96, Drillers Hit Pause

Harold Hamm announced his company would resume drilling after a 30-year hiatus, citing higher oil prices amid the war with Iran . But North Dakota's top oil regulator warned that "the conflict could end tomorrow," capturing the hesitation rippling through America's third-largest oil-producing state. WTI crude traded at $71.50 per barrel Friday, according to market data, yet the Bakken's rig count hovers around 25—far below the boom years. The paradox is simple: prices are high enough to drill, but not high enough to bet the future on.

Continental Resources, North Dakota's second-largest oil producer, paused new drilling in January for the first time in three decades . The company's reversal this week tells you everything about how American shale views the current crisis—as opportunity laced with risk. The Strait of Hormuz closure triggered the largest oil market shock in history, with global supply crashing by 10.1 million barrels per day in March , the World Bank reported. Yet Bakken operators are moving like they're walking on ice.

Why Won't They Drill?

The caution reflects a deeper calculation. Roughly 20 million barrels per day moved through Hormuz before the war, with around 14 million barrels per day currently disrupted , according to ING. That supply shock should be a gift to U.S. producers. Instead, it's a gamble. Traders now embrace the "NACHO" trade—"Not A Chance Hormuz Opens"—as skepticism grows that the crisis will end soon , CNBC reported. But North Dakota drillers aren't convinced the acronym will age well.

The EIA assumes the Strait remains effectively closed until late May, with shipping traffic beginning to pick up in June . If that timeline holds, prices could soften faster than new wells can pay back their drilling costs. State regulators noted they've heard "another company" will pick up another rig, with the state averaging around 25 active rigs —a far cry from the 200-plus rigs running during the last oil boom. The math is brutal: each horizontal well costs $7-9 million and takes months to complete. By the time production starts, Hormuz could be open and prices could be back at $70.

The natural gas market offers a mirror image of this dilemma. Natural gas futures ended the week on a low note as market participants digested fresh signs of stout supply and a bearish demand setup , Natural Gas Intel reported. Henry Hub traded at $3.25 per MMBtu Friday, down 2.4% according to market data. European and Asian gas prices have surged roughly 48% and 83% respectively since the Iran conflict began, while Henry Hub prices declined 9.1% , according to the American Gas Association. The U.S. is drowning in gas it can't export fast enough, even as the rest of the world scrambles for supply.

Who's Paying the Price?

Colombia offers a case study in what happens when domestic production collapses during a global supply crisis. The Andean country faces a severe energy crisis as global natural gas supply is heavily constrained due to the Hormuz closure, at a time when domestic production is declining , OilPrice.com reported. Colombia's March 2026 natural gas production was almost 15% lower year-over-year and 38% lower than a decade earlier .

The numbers are stark. Colombia's imported gas share jumped from 3% of total consumption between 2015 and 2023 to 23% in the first quarter of 2026, with projections it could reach 39% before year-end , according to financial research body ANIF. The average price of imported natural gas climbed 26% to $18.39 per MBTU, while industrial gas costs soared 69% in 2025 and household prices surged 23% . Iran disrupted roughly a fifth of Qatar's LNG production, and the Hormuz closure affects about 20% of global natural gas shipments annually .

For Colombia, the timing couldn't be worse. LNG imports accounted for 18% of supply by end-2025, with revised estimates suggesting dependency could reach 33% before end-2026 . The country entered the import market precisely as global LNG prices climbed, with no domestic production growth to cushion the blow.

Meanwhile, Kevin Warsh was sworn in as Federal Reserve chair Friday, facing surging inflation, rising mortgage rates and historic lows in consumer sentiment, with his first policy meeting in June testing his independence , CNN reported. The oil shock has sharply pushed up gasoline prices, mortgage rates have climbed to their highest level in nine months, and overall inflation has surged to the highest level in three years . Traders now see a 57% chance of at least one rate hike by December , according to CME FedWatch—the opposite of what the president wants.

What Changed This Week

Continental Resources announced it would resume drilling in North Dakota after pausing in January, with founder Harold Hamm citing "a great deal has changed" due to higher oil prices . Brent crude increased by about 65% ($46/bbl) by end-March to record its highest monthly rise ever , the World Bank noted. Yet the enthusiasm remains muted. North Dakota's cautious restart reflects a broader truth: the current oil shock is creating winners and losers in unexpected places, and the gap between global prices and domestic action reveals how little confidence exists that today's crisis is tomorrow's new normal.

What to Watch

The EIA's next Short-Term Energy Outlook on June 9 will update assumptions about Hormuz reopening timelines. Current forecasts assume shipping traffic begins picking up in June, though oil shipments won't likely reach pre-conflict levels until later this year . North Dakota's rig count data, published weekly, will signal whether other producers follow Continental's lead. Warsh's first FOMC meeting in June will test whether the Fed prioritizes fighting inflation or accommodating White House pressure for rate cuts. And Colombia's May import data, due in early June, will show whether the 33% LNG dependency projection is materializing—a bellwether for other import-dependent emerging markets caught between depleting reserves and surging global prices.