Oil Majors Return to Alaska as Hormuz Crisis Reshapes Global Energy Markets

Shipping traffic through the Strait of Hormuz has been largely blocked by Iran since February 28, 2026 , and crude oil prices ticked higher today as hopes for a peace deal between the United States and Iran faded further, after President Trump called Iran's response to a U.S. peace deal proposal "garbage" . According to market data, WTI crude traded at $71.50 per barrel, up 0.6%, while Brent crude stood at $75.20 per barrel, up 0.5% as of Monday morning.

The International Energy Agency has characterized the situation as the "largest supply disruption in the history of the global oil market" . Amin Nasser, chief executive officer of Saudi Aramco, said the oil market will take months to normalize even if flows through the Strait of Hormuz resumed today, as 1 billion barrels of oil have been wiped off the supply balance over the past two and a half months .

Alaska Emerges as "World's Hottest Play"

Against this backdrop of Middle East turmoil, major corporations like ExxonMobil and Shell participated in a massive lease sale in Alaska's National Petroleum Reserve, with ExxonMobil committing more than $7 million on some 138,000 acres . The Financial Times reported that oil majors are returning to Alaska as the state becomes the "world's hottest play" in Trump's "drill, baby, drill" era.

The controversial federal lease sale generated $163 million in high bids, beating the $104 million mark set during the first competitive oil and gas lease sale in the reserve, which was held in 1999 . Repsol and Shell, which bid jointly on many tracts, were the biggest winners with more than $91 million in bids, according to Interior Department data .

The return marks a dramatic reversal for both companies. Shell hasn't drilled a well in Alaska since its failed offshore exploration campaign more than a decade ago, and ExxonMobil had not bid on a federal or state oil and gas lease in Alaska in more than a decade, according to data provided by Welligence, an industry research firm .

Hedge Funds Bet Big on Biofuels

The Hormuz crisis has triggered an unexpected shift in commodity markets. The Financial Times reported that hedge funds are betting on biofuels to profit from the Iran oil price shock, with traders expecting corn and soybeans to soar as demand for alternative fuel sources rises.

Driven by the deepening global energy crisis and aggressive new biofuel mandates, hedge funds have pivoted from a neutral stance to heavy net-long positions in corn and soybean oil futures, with speculative positioning in the grain sector hitting a four-year high, swinging from a net short of 258,000 contracts to a net long of 635,000 contracts in just two months .

Soybean futures rose above $12 per bushel, moving back toward multi-week highs as biofuel-related demand strengthened amid rising global energy prices, with the US Environmental Protection Agency finalizing record Renewable Fuel Standard mandates for 2026-2027, lifting required biofuel blending volumes and boosting demand for soybean oil used in biodiesel production . Soybean oil futures reached 58 cents per pound this month—a 22% increase since the beginning of the year .

China's Teapot Refiners Under Pressure

The crisis is also squeezing China's independent refiners. OilPrice.com reported that some independent refiners in China are reducing their production rates as margins shrink and demand weakens amid the continued paralysis of tanker traffic in the Strait of Hormuz . Reuters sources said the average operating rates at so-called teapots in Shandong had fallen to 50%, from 55% in April .

Asia, the biggest oil demand center globally, is facing the greatest pain from the closure of the Strait of Hormuz, with the war potentially forcing up to 6 million barrels per day cuts to crude runs across Asia in April, as refineries face severe supply disruption with 65% dependency on Middle East crude .

The situation has become a geopolitical flashpoint. Al Jazeera reported that China announced an injunction to block US sanctions placed on five Chinese refiners accused of buying oil from Iran, with the US sanctions barring the refiners from the US financial system .

Natural Gas Markets Heat Up

While oil grabs headlines, natural gas markets are showing their own dynamics. Natural Gas Intel reported that physical natural gas prices for Tuesday delivery strengthened across much of the United States as warmer weather forecasts, pipeline maintenance and improving regional demand expectations supported cash markets . According to market data, Henry Hub natural gas traded at $3.25 per MMBtu, down 2.4%.

LNG Deals Signal Tighter Markets Ahead

Venture Global and Vitol announced the execution of a binding agreement for the purchase of approximately 1.5 million tonnes per annum of U.S. liquefied natural gas from Venture Global for five years commencing in 2026 . Reuters reported that Venture Global also signed new LNG supply deals with TotalEnergies.

According to S&P Global, traders say Middle East disruptions have tightened balances and point to a growing supply deficit, with one trader stating "spot prices are expected to remain high now, that surplus we were all talking about is now a deficit" and "the glut is effectively gone" .

The convergence of geopolitical crisis, supply disruption, and energy transition is creating a volatile environment where decades-old assumptions about energy markets are being rewritten in real time. Whether Alaska's Arctic reserves can help fill the gap left by Middle Eastern supply disruptions—or whether biofuels and alternative sources will reshape demand faster than expected—will define the energy landscape for years to come.