When Supply Chains Vote

Colombia pumps 740,000 barrels of oil per day—down from 917,000 a decade ago. On Sunday, voters will decide whether that decline accelerates or reverses.

The May 31 presidential election has emerged as a referendum on President Gustavo Petro's energy policies , according to OilPrice.com. Petro banned new exploration contracts, hiked taxes on extractive industries, and attempted to prohibit hydraulic fracturing —moves that deterred foreign investment and sent production tumbling. Leading candidate Iván Cepeda, representing Petro's Pacto Historico party, holds 37.1% support in polling from Guarumo-Ecoanalitica , but not enough to avoid a likely June 21 runoff. His opponents promise the opposite: reduced business taxes and facilitated oil and gas investments that were blocked under Petro , ABC News reported. The stakes extend beyond barrels. Oil exports earned Colombia $12.5 billion in 2025 , and at current production levels, the country's oil reserves will last just 7.2 years .

Can Elections Reverse Geology?

Not quickly. Even if a pro-industry candidate wins, Colombia's oil and natural gas output sits at or close to historical lows, according to the National Hydrocarbon Agency . By March 2026, the country was lifting 740,497 barrels per day —a figure that reflects not just policy but the natural decline of mature fields starved of exploration capital. Natural gas production has collapsed to 683 million cubic feet per day in January 2026 , OilPrice.com noted, representing a 16.7% decline compared to the same period a year earlier .

The election arrives as global oil markets recalibrate. With imported natural gas comprising an ever-greater proportion of supply, inflation spiked to 5.68% in April 2026 , creating economic pressure that could swing votes. More than 41.2 million registered voters will participate, making this the third-largest presidential election in Latin America after Brazil and Mexico , according to ABC News.

Half a World Away, Another Pressure Point

Port Hedland processes nearly 300 million tonnes of iron ore annually. Every tonne moves through a single loading terminal in Western Australia. And the Electrical Trades Union has begun a strike ballot that could "very likely" result in work stoppages by the end of June , Reuters reported Friday.

The prospect of a strike comes after six months of stalled talks with BHP to agree on a labour agreement, with workers seeking improved pay and conditions . BHP's labour agreement covers around 450 port workers, of whom about 200 are ETU members . Unionised workers will vote in the next two weeks to endorse work stoppages ranging from 15 minutes to 24 hours , the union said.

The timing compounds BHP's challenge. Approximately 350 BHP iron ore rail workers have already voted in favour of protected industrial action, with train drivers separately supporting measures including full work stoppages and speed reductions on the rail network connecting Pilbara mine sites to the port . Speed reductions are tactically sophisticated: they degrade throughput continuously without triggering a complete shutdown, making legal challenges harder while maintaining pressure on the company.

Port Hedland is one of the largest iron ore loading ports in the world and is used for all of BHP's iron ore exports in Western Australia . Given that Australia supplies approximately 60% of China's seaborne iron ore imports, any material reduction in Port Hedland throughput would register in global supply balances , according to industry analysis.

The Scramble for Barrels

While Colombia debates its oil future and Australia's miners negotiate wages, Asian refiners are improvising. The Suezmax tanker Ocean Start delivered Iranian crude to Petron's Bataan refinery on May 17, according to data from Kpler, with the tanker capable of carrying 1 million barrels of oil . Kpler data indicated that this was the first Iranian crude delivery to the Philippines .

The cargo's journey reveals the contortions required to move oil in 2026. The Ocean Start received the cargo in early May through a ship-to-ship transfer in waters off Singapore with another Suezmax tanker Kylo, which loaded the crude at Iran's Kharg Island on March 27 , ship-tracking data showed. The Trump administration granted a 30-day waiver on sanctions related to purchases of Iranian oil at sea from March 20 to April 19, in a bid to ease oil prices that had surged following the U.S.-Israeli conflict with Iran , Reuters reported.

The Philippines represents one of the more desperate cases. The delivery was the first Iranian cargo to the Philippines, which is one of the Asian countries worst hit by the world's biggest oil supply disruption , according to OilPrice.com. The country has also secured waivers to purchase Russian crude—a diplomatic balancing act driven by energy necessity rather than geopolitical preference.

What About U.S. Shale?

The traditional relief valve—American drillers responding to higher prices with more rigs—faces structural constraints. While WTI crude traded at $71.50 per barrel on Thursday, according to market data, drilled but uncompleted wells in shale basins are at their lowest level since the federal government started tracking them in 2013, having fallen 15% to 5,300 wells in the last two years, according to the EIA .

Analysts estimate that 60% of Permian Tier-1 acreage has already been drilled, with only about 3.7 years of premium inventory remaining at current drilling rates . Existing wells lose approximately 4.3 million barrels per day annually, with the average shale well losing 74% of its production in its first year alone, compared to a typical 15% annual decline for conventional wells .

Devon Energy's recent moves illustrate the industry's consolidation phase. The company's merger with Coterra Energy, valued at approximately $58 billion, closed on May 7, 2026, with Devon shareholders owning roughly 54% of the combined entity . The board approved a new share repurchase authorization of $8 billion, representing almost 15% of current market capitalization . The message: return cash to shareholders, not drill at all costs.

What Changed This Week

Oil prices fell 2% as markets priced in the possibility of a U.S.-Iran ceasefire extension, with Brent crude trading at $75.20 per barrel, up 0.5% on the day but down sharply for the month. Colombia entered the final 48 hours before an election that will determine whether South America's fifth-largest oil producer continues its production decline or attempts a reversal. BHP's Australian workforce moved closer to industrial action that could disrupt the world's largest iron ore export hub. And the Philippines received its first Iranian crude cargo since the war began—proof that supply chains adapt, even when governments can't.

What to Watch

May 31: Colombia's presidential election. If no candidate wins 50%, a runoff follows on June 21. Watch for immediate market reaction in Colombian peso and statements from international oil companies operating in the country.

Early June: BHP strike ballot results expected within two weeks. The ETU said a strike could "very likely" take place by the end of June if a pay deal is not reached . Iron ore futures will price in disruption risk as the deadline approaches.

Mid-June: Devon Energy expects to provide updated financial and operational guidance reflecting the combined company in mid-June 2026 . The guidance will signal whether the largest U.S. shale consolidation translates to production growth or shareholder returns.

Ongoing: U.S.-Iran ceasefire negotiations. Any extension—or collapse—will immediately move crude markets. The Philippines' creative sourcing shows Asian buyers won't wait for diplomacy to secure barrels.