Newsletter · 2026-07-24 · Ashutosh Agarwal

Oil Finally Cracks $100 as a Second Chokepoint Opens - Oil: OPEC+, Shale & Geopolitics - Week of July 24, 2026

Oil: OPEC+, Shale & Geopolitics for the week of July 24, 2026. Brent crude finally cracked $100 as the Iran war widened into its 21st week and Houthi forces opened a second chokepoint in the Red Sea, but podcasts this week converged on a bigger story: the world is short of refined fuel, not crude, with diesel and gasoline crack spreads running several times normal levels.

Oil: OPEC+, Shale & Geopolitics

Week of July 24, 2026: Oil Finally Cracks $100 as a Second Chokepoint Opens

For four months the story of this market was how little oil moved no matter how scary the Middle East headlines got. This week that finally broke. The global benchmark, Brent crude, climbed all the way to $100 a barrel for the first time since May, capping a monthly gain of roughly 30-35%. Two things pushed it there. First, the fight over the Strait of Hormuz, the narrow sea gate at the mouth of the Persian Gulf that a fifth of the world's oil and LNG squeezes through, escalated into a genuine, weeks-long U.S.-Iran shooting war now in its 21st week, with American troops killed and energy facilities being hit. Second, and this is the new part, Iran's Houthi allies in Yemen opened a second front: a threatened naval blockade of Saudi ships in the Red Sea, the other route Saudi Arabia uses to get its oil out. Suddenly the world isn't worried about one chokepoint. It's worried about two.

And yet, this is the paradox that ran through almost every conversation this week, even at $100, oil is nowhere near the $150-200 that a four-month closure of Hormuz "should" have produced. The reason is a set of cushions that are now visibly wearing thin: a stunning, deliberate cut in Chinese demand, emergency oil pulled from government stockpiles, and traders who keep selling into the rally rather than chasing it. Underneath the crude price, the more urgent story kept building: the world is not short of crude oil, but it is dangerously short of the fuels made from it, diesel, gasoline, jet, because refineries in Russia, the Middle East and China keep going dark. Here is what the people who trade, produce, study and finance this market actually said this week.

What Happened: The War Widened, and a New Front Opened at Sea

The escalation was steady and grim. As reported on Bloomberg Daybreak: US Edition, U.S. Central Command completed "a ninth straight evening of attacks targeting Iranian command centers, maritime capabilities, missile and drone launch sites," while Iranian strikes "killed 2 more U.S. service members in Jordan, bringing the U.S. death toll to 17 since the war began." President Trump, speaking at Joint Base Andrews, framed it as a change of goal: "We were doing a little job of stopping them from having a certain capability. Now we're just ending it… we're ending any chance where they could have a nuclear missile." Bloomberg's Stephen Chepchinsky flagged the ominous shift: "before, it was really with the tit-for-tat attacks… but now you're seeing them start to target energy assets. Kuwaiti facilities have been targeted over the weekend." His warning was that if this becomes a repeat of the spring, when Iran damaged refineries and gas plants, "it is no longer a question as to how long it takes for Hormuz traffic to get back to normal. It is a question for how long does it take for some of these really important assets and production facilities to get repaired."

Then came the genuinely new development. On Power Lunch, the hosts noted that "Iran-backed Houthis have opened a new front declaring a maritime embargo at the Bab El-Mandeb Strait, a critical Red Sea choke point for Saudi oil exports." (The Bab el-Mandeb is the gate between the Red Sea and the Gulf of Aden, the far end of the shipping lane that Saudi Arabia has been using to bypass Hormuz.) By Thursday, the threat was real. Bloomberg Middle East editor Patrick Sykes reported on Bloomberg Daybreak: US Edition that the Houthis "claim two tankers, but we know they've hit at least one refined products tanker in the south of the Red Sea," confirmed by the British Navy: "the first time they've successfully acted on this blockade on Saudi ports." His point was that traders now face a nightmare of geography: "if you wanted to get from the Saudi port of Yanbu on the Red Sea to a crude buying market in Asia… you've now got a choice between risking the passage through that very narrow strait controlled by the Houthis, or going all the way into the Med and potentially all the way back around Africa." Trump, at a rally in Marietta, Georgia, was defiant: "We don't need the Hormuz Street, but we do it because we have to do it because we cannot let Iran have a nuclear weapon."

Set against the shooting was some frantic dealmaking. The Trump administration approved a nuclear-cooperation deal with Saudi Arabia (a move flagged on The Morning Market Briefing), and, as covered on The Smashi Business Show, Iraq's prime minister came home from Washington with $200 billion in energy agreements involving Chevron, Halliburton and HKN Energy to develop some of Iraq's biggest fields.

The Price: From $90 on Monday to $100 by Thursday

The week was a steady climb. Oil started it around $90 Brent, $82 for U.S. crude (Power Lunch, July 20). By midweek, Squawk on the Street noted Brent had hit $95 "for the first time since June 11th." And by Thursday, Squawk on the Street marked Brent at "$100.03", a roughly 35% gain on the month. On NAB Morning Call, economist Ray Attrill put it simply: oil is "up 30% this month approaching $100/barrel." At J.P. Morgan, strategists Frida Infante and Harry Downie warned on At Any Rate that further disruption could push Brent "toward $100 per barrel," and that the shock was already lifting inflation expectations across the U.S., Europe and the U.K.

American drivers felt it immediately. On Power Lunch, the national average gasoline price was "back at $4 a gallon… we were at 379 a couple of weeks ago." Bloomberg Daybreak: US Edition put the AAA average at "$4.03," with Energy Secretary Christopher Wright insisting gasoline is "more than $1 a gallon cheaper than… 4 years ago" and that the administration would "drive them further down."

Why "Only" $100 and Not $150: China, and a Market That Keeps Fading the Rally

The most striking frame came from Luke Gromen, founder of the research firm Forest for the Trees, on Macro Voices. He and host Erik Townsend had correctly predicted, months ago, that the war would drag past July and Hormuz would still be shut, but they got the price wrong, and the reason was China. "If you would've told me, hey, Hormuz is still going to be closed, I would've thought equity indices would be lower, I would've thought inflation higher, and I would've thought oil higher," Gromen said. What blindsided him was the scale of China's self-imposed diet: "in the first half of '26 alone, they shifted 1.4 million barrels a day of demand for oil to EVs. They reduced demand overall by 3 to 4 million barrels a day." And China did it without visible pain: "China's exports to the world were up 27% year over year in May. China's corporate profits year to date up 19, 20%. They have weathered it much better than I or I think anyone else would have thought." His read on where China goes from here is almost Machiavellian, keep oil "low enough for there to not be a severe crisis, high enough to create inflation in the U.S. and the world," stringing out the conflicts because China is "really the only person" that can sell weapons and components to every side.

The clearest sign that the rally is fragile came from Macro Voices' own trading desk, reading the latest futures-positioning data (the weekly report showing whether big traders are betting up or down). Even as U.S. crude ripped toward $88, "large speculators actually sold into the rally, cutting another 13,000 contracts, and their positioning score, it's down to just 12 points… Price surging and the specs are leaving, which means this move is running on fundamentals. So the market keeps tightening and there's still a whole crowd on the sidelines that hasn't even bought in yet." In plain terms: this isn't a hot-money bubble. It's physical scarcity, and the speculative crowd that usually pours in during a war hasn't even shown up.

The single richest walk-through of the physical picture came from Rory Johnston, founder of the Commodity Context research service, on Palisades Gold Radio. He described a market whiplashing between glut and shortage "in a way I've never seen in my career." After the June ceasefire, a flood of stranded oil poured out of the Gulf: "on many days, you saw more than 20 million barrels clear Hormuz, which was pre-war levels and then some", briefly flipping the market back into oversupply even four months into a closure. The tell was in the futures curve: prices went from "backwardation" (spot barrels more expensive than future ones, the classic sign of scarcity) to "contango" (the reverse, a sign of glut) and, within weeks, violently back again. "Yesterday, we saw them skyrocket… up from like 20 cents a barrel on prompt spreads to $2 a barrel… a seriously tight market." Saudi Arabia's official selling prices swung from double-digit premiums to "a buck 50 discounts to Brent" and back.

Johnston's estimate of the underlying hole is sobering. Middle East loadings are "still down 10 million barrels a day relative to pre-war levels." China's demand cut is filling about half of that, he sizes China's swing at "5 million barrels a day, or about 45% of pre-war levels between February and June," which he notes is "a larger balance swing than the entire collective West" pulling from their emergency reserves. Add roughly a million-plus barrels a day from the U.S. and Japanese reserves and other draws, and "you're still probably in like a couple million barrel a day deficit, even with every single system maxed out to compensate." His warning: those compensations "will eventually stop," and if flows through Hormuz stay where they now are, he pegs the latest nominal rate at "sub-million barrels a day again, which was pre-ceasefire levels": "even with all these things going full tilt, we run into serious problems, you know, into September." The nightmare scenario is China coming back: "if… China jumped back into the market and you went from a couple million barrels a day deficit back to, say, eight to ten, then you… can still get those $150, $200 barrel levels."

The Flows: Hormuz Down to a Trickle, and Everyone's Tracking the Same Collapse

The numbers on physical traffic all told the same story from different angles.

• On Power Lunch, Matt Smith of Kepler, the commodities-intelligence firm that owns the ship-tracking platform MarineTraffic, said fewer than 10 tankers had crossed over the previous three days, and those were "mainly the Iranian stuff… ballasting vessels. They are empty. So for all intents and purposes, the Strait is basically closed." He explained the geography: there's a northern "Iranian route" Iran still controls, a southern "Omani route" where tankers are being targeted, and the option of "going dark" (switching off the transponder that broadcasts a ship's position, to slip through unseen).
• Bloomberg Daybreak: US Edition put a hard trend on it: in the week ending July 19, "Hormuz crossings averaged 7 tankers each day, and that's compared with 16 per day a week earlier," according to S&P Global Energy. The UK Navy also reported strikes on two vessels in the strait.
• Bloomberg's Ziad Daoud framed the standoff itself: "both countries are trying to control Hormuz. Iran realizes that Hormuz is its main leverage and needs to keep control of it. And the U.S. is trying to weaken Iranian control… and prevent, or maybe even get ready for, future closures."

Matt Smith also drew the crucial line between crude and fuel that explains the whole market. Yes, roughly "10 million barrels a day of production" has been lost on average over four and a half months, but a lot of that has been offset by refineries simply "not running because they haven't got the crew to run or they have dialed back." The result: crude has stayed "largely balanced," but "the problem is in the product side of the picture. And that's why you're seeing product prices ripping higher… record refining margins." His headline figures: a barrel of gasoline is now "over $140," diesel "over $170."

The Story Under the Story: The World Is Short of Fuel, Not Crude

This was the week's most important and most unanimous theme. There is enough crude oil. What is genuinely scarce is refined product, because an unprecedented share of the world's refining capacity is offline at once. The measure to watch is the crack spread, the extra money a refinery makes turning a barrel of crude into fuel. When it explodes, it means fuel is scarce relative to the oil it's made from.

Rory Johnston gave the cleanest picture on Palisades Gold Radio: a normal summer crack spread is "about $20 a barrel." Right now, "diesel crack spreads are over $80 a barrel and gasoline crack spreads are around $50 a barrel. So two and a half times norm for gasoline, four plus times for diesel." His mental model: imagine "100 units of upstream crude oil production… 100 units of downstream product demand. But we only have… 80 or 90 units of refining capacity in the middle. In that situation, you have both a surplus of crude and a deficit of refined products." He also flagged how empty the tanks have run: U.S. gasoline inventories are at their "lowest level in 12 years on a seasonal basis," diesel at the lowest "in like 30 years," and the crude hub at Cushing, Oklahoma fell below 20 million barrels, near the operational minimum.

The biggest single cause is not the Middle East, it's Russia. Johnston: "the massive ramp up of, and shockingly successful attacks conducted by Ukraine against Russian refineries has pushed Russia into a full-blown crisis of refining. Between a third and half of Russian refining capacity is now currently offline." Ukraine "hit the largest refinery in Russia last week… a 400 plus thousand barrel a day refinery… that's 0.4% of total global supply in this one facility," and it was struck in deep Siberia "more than 2,700 kilometers away from the Ukrainian front. Nothing in Russia is safe." The consequences inside Russia are Soviet-style: fuel lines "for like days," local gasoline hitting "$10 a gallon or more" in Crimea, and Moscow banning exports first of gasoline, then jet fuel, "and now, most recently… diesel." Russia was "the second largest seaborne supplier of diesel to the global market, more than a million barrels a day"; now it has flipped to importing gasoline from India: "Russia is now exporting its crude to India, and then importing the resulting gasoline because it doesn't have refineries anymore."

Tallying the outages, the hosts of The Financial Exchange Show reckoned that with Russia at "four and a half to five million barrels a day of refinery capacity offline," the Middle East "like three," and China "four to five," the world has "somewhere in the ballpark like 12 to 14 million barrels a day of refinery capacity that's offline worldwide." Earlier in the week, on The Financial Exchange Show, they had made the key point for consumers: even though crude "move[d] from 68 up to 81" over the month, "crack spreads have still widened because that refinery capacity is just so tight… even if you see crude prices come down, until there is improvement on the refinery side… you're not going to see gas prices fall the same way that you normally would." U.S. Gulf Coast refineries have been running "over 100% capacity for basically the last month", a pace, they warned, that "systems are not built to run this hot for this long."

An oil-market analyst on EnergyCents added the crucial detail that the product market has almost no backstop left. Historically it leans on five big exporters, the U.S. Gulf Coast, the Middle East, China, Russia (for diesel) and India/South Korea. Today "the Middle East is back under severe restrictions… the Russia flow is now almost fully impaired… the China flow remains impaired through the export restrictions." Russia went from "around a million barrels a day of diesel" at the start of the year to "500,000 to 600,000 barrels a day" by June, then a full export ban. Diesel cracks are "back above $70 a barrel," and the broad three-fuel crack "back above $60 consistently." His most memorable line captured the fragility: on the product side, "you're one hurricane away, one upset away from going from alarming to catastrophic." On Facts vs Feelings, investor JC Parets tied it back to Wall Street: fat crack spreads are "driving strong performance in refining stocks like Valero and Phillips 66," and refining margins make up roughly a quarter of what you pay at the pump.

Why This Crisis Could Last, and Get Worse Before It Gets Better

Several insiders pushed hard against the market's hope that this all resolves quickly. The most vivid warning came on the Drone Wars Podcast from Matthew Walther, a retired 21-year Navy bomb-disposal technician who now runs manufacturing and logistics at the defense firm Firestorm. His point was about naval mines, cheap, crude, floating explosives, and how little it takes to paralyze the strait: "Literally one of them is all it takes to shut down the strait again… not just for days or weeks, but we're talking months." The reason is fear and insurance: "insurance companies run the world. So how are you going to insure something going through the strait?… you're going to pay through the nose for it." Worse, the tactic scales trivially: "the brilliance would be to put one in, make it a big media event, and go, and by the way, we put a hundred out there and the other hundred are just oil drums. Doesn't matter. We have to find every single one of them." As he put it, "you and I could go over to Home Depot this afternoon and by tomorrow morning we're in the sea mine business." The Navy's mine-countermeasure teams, he noted, are "extremely well employed right now."

The oil-market analyst on EnergyCents explained why the timing is dangerous. He estimates the June ceasefire injected "somewhere, call it 200 to 250 million barrels of oil" into the system as stranded tankers finally sailed: "a bit akin to a strategic stock release", which is why the crisis has felt manageable so far. But that buffer is largely spent, and the calendar is turning against everyone: the second quarter was "as good a time to have this real challenge to product markets as we did, because it was… shoulder season." Now, heading into U.S. summer driving, then the U.S. holidays and European winter heating, "you create real risks of significant upside for cracks and margins." Of the "400 million barrels that were announced to be released in a coordinated fashion," the International Energy Agency estimates "240, 250 million barrels" have already been used, and the U.S. is near its operational floor. The hosts of The Financial Exchange Show were blunt about the political math: the only way the U.S. forces Iran's hand on Hormuz is "probably going to take years, billions of dollars and hundreds of thousands of U.S. troops. I don't think you can airstrike your way to changing the Iranians' minds."

An energy adviser on Closing Market Report put hard numbers on the downside: Goldman Sachs told clients "crude oil… [could] get to 120 here in the Brent market by the fourth quarter if the strait remains… in jeopardy", a $30 rally from here (a call also relayed on Bloomberg Daybreak). He warned that if the Red Sea closes too, "you're talking six to seven million barrels a day that could potentially be locked in… in addition to maybe… half a million barrels a day of… diesel fuel exports." And the American backstop is nearly gone: the U.S. Strategic Petroleum Reserve, the government's emergency oil stash, is "at a 43-year low… in 1983." Diesel futures have whipsawed from a mid-March peak of "$4.83" down to "$3.05" in mid-June after the ceasefire, and back up toward "$4.20, $4.30."

The politics offered no comfort. On Bloomberg Daybreak: US Edition, Democratic Senator Chris Murphy called the war "the most significant foreign policy disaster in the last 20 years," arguing "Iran effectively has control of the strait… for the long run," and that reopening it will cost the U.S. "billions of dollars… in sanctions relief" plus pressure on Israel to end its campaign in Lebanon.

Natural Gas and LNG: The Calmest Corner Globally Is the Tightest

Away from crude, the liquefied-natural-gas market (gas chilled to a liquid so it can be shipped) is where the Hormuz closure bites hardest, because roughly a fifth of the world's LNG, mostly from Qatar, sails through the same strait. On the S&P Global podcast Commodities Focus, the team walked through a market that has been turned upside down. The Asian benchmark price, JKM, "spiked to… mid-$25 per MMBtu, its highest level since December 2022." James Taverner, who runs gas and LNG research there, delivered the number that matters most: before the war, global LNG supply was expected to grow about "11% year on year in 2026" as new U.S. and Canadian projects ramped up. Now, with Qatari and UAE supply knocked out, "we now think it will only increase by about 1% year on year instead. So a very big change." His base case assumes Qatari flows return "around the beginning of August" and take "about 2 months" to ramp, but with a crucial caveat: two damaged Qatari LNG production units are excluded because they "will take longer, maybe 3 or 4 years to repair."

The pain is landing on price-sensitive Asian buyers. Because "last year 90% of the LNG that transited the Strait of Hormuz went to Asia," import cuts have been severe: Pakistan's LNG imports are down "three-quarters," South Korea's "about 10%," and China's "8% year-on-year," much of that by switching power stations from gas back to coal. Europe, meanwhile, went into this year with storage "about 15 percentage points below typical averages," so it needs to import heavily this summer just to refill, a squeeze on both ends.

Natural Gas at Home: The Paradox of Cheap Gas in a Tight World

Here is the twist that gives this newsletter its "shale" theme. While global gas panics, U.S. gas is cheap, and getting cheaper. On NGI's Hub & Flow, senior editor Andrew Baker laid out the summer paradox: U.S. power plants are burning a forecast "42.2 BCF a day this summer," with many recent days "over 50 BCF a day", near-record demand in a heat wave: "yet Henry Hub prices are only limping along," with three straight weeks of futures declines. Why? Renewables and shale byproduct gas. In one telling example, the hottest week of summer produced a bigger storage build (more gas left over) than a cooler week, "due in large measure to just the rapid, impressive growth… of renewable energy, particularly wind and solar," which get used first. On top of that, "associated gas from oil-heavy basins like the Permian… continues to flow regardless of Henry Hub pricing." With oil prices high, "it's sort of hard to see oil producers slowing down", the oil-directed rig count just rose by seven, "including three in the Permian", so more oil means more of this byproduct gas whether the gas market wants it or not, "emphatically" capping the price.

That Permian byproduct gas got its own good-news story on the RBN Energy Blogcast. Analyst Lindsay Schneider explained that Permian gas prices (at the Waha hub in West Texas) spent almost the whole first half of the year in the red, positive "only 11 days", because so much gas comes up with the oil that there's nowhere to put it (the region "produces massive volumes of gas, but there's almost no local market"). In mid-June, Kinder Morgan flipped on a pipeline expansion adding "570 million cubic feet per day" of takeaway room, and Waha prices climbed back above zero, "mostly settled around $1.50 per million BTU." Two more big pipelines, Blackcomb and Hugh Brinson, will add "4 BCF per day of capacity later this year," with a total of over 11 BCF/d of new capacity coming by the end of the decade, most of it built to feed the Gulf Coast's growing LNG export plants.

For the long view, a natural-gas specialist on Invest Like the Best argued that today's cheap gas is a trap. The U.S. is committed to grow LNG exports "from about 15 to 35 BCF a day… by the end of 2030," while the country can add only "about 20 BCF a day of gas production." Even before AI, "sources and uses [were] matched." Then add AI computing: a base case of "about 5 BCF/day" of new gas demand for data-center power, and an extreme case of "12 to 15 BCF a day by the early 2030s." His conclusion is that "complacency", gas priced flat at "$3.50, $3.60" all the way out to 2030, will "take us right up to the point where it's too late," and that starting around 2028 storage draws could push prices to "$8, $9, $10" and beyond. His favored winners: gas producers Expand Energy (which controls "70% of remaining core Haynesville wells," is currently without a CEO and "trading at 4 times EBITDA") and Range Resources, plus utility-scale solar operators like XPLR (ticker XIFR) and Clearway that would enjoy windfall power prices at no extra cost. He noted that EQT "is shutting in natural gas right now because they think it'll be more valuable later."

OPEC, Sanctions, and the Scramble to Replace Lost Barrels

The supply-side politics moved this week too. On The Smashi Business Show, Iraq's Oil Minister Basim Mohamed Khudair said Baghdad is in "serious and constructive talks with OPEC… to secure a higher oil production quota," with Iraqi capacity "already exceeded 4.8 million barrels per day." The show also noted, in passing, that the UAE "recently exited" OPEC, a striking claim if it holds, given the UAE has been one of the producers ramping hardest to fill the gap. Iraq is also building pipelines to Turkey's Ceyhan port and Syria's Baniyas terminal to reduce its reliance on the Hormuz corridor.

On the Russia side, The Journal featured Senator Richard Blumenthal on a sanctions bill, co-authored with the late Senator Lindsey Graham and backed by more than 60 senators, that would authorize tariffs "up to 100 percent on the top five buyers of Russian oil and gas, with China and India at the top." He argued existing sanctions have cost Russia "about a $450 billion price tag" without stopping its economy, and that the point of the new bill "is to stop the major purchases of Russian oil and gas." Any country can dodge the tariff, he noted, with "an easy way to avoid them… stop buying Russian oil and gas."

From the People With Capital and Barrels on the Line

Separating the money managers and operators from the commentators: the investing crowd was unusually constructive this week, and specific.

The clearest bullish thesis came from veteran resource investor Rick Rule on Thoughtful Money. His starting point is that today's price rise is driven by "the threat of a shortage as opposed to an actual shortage", and if a real shortage hits and oil is rationed by price, "it'll be much higher." He argued years of underinvestment (in Iran, Venezuela and Mexico, all using decades-old technology) will "come home to roost," and that a world newly wary of the Gulf will lean on North American producers, whose "economics and technological dominance… has been proven." His picks, in rising order of risk: "for most investors… buy Exxon. Buy the best of the best," citing its Guyana discovery of "19 billion barrels"; then Chevron; then, for those who can stomach balance-sheet risk, Occidental Petroleum, still available "lower than Buffett's average price." For gas he named Devon (which merged with Coterra to become "the largest independent gas producer in the United States") and Range. And for "alpha," he pointed north to Canadian names, Cenovus (at "such an insane discount"), Canadian Natural Resources ("almost a mutual fund of Canadian oil and gas production"), Freehold Royalty (his "remaining favorite"), Tourmaline, Birchcliff, Peyto and heavy-oil producer International Petroleum, while flagging real political risk under a prime minister he sees as "still anti-hydrocarbon." A cleaner way to play the whole rebuild, he added, is the oilfield-services giants: "Schlumberger, Halliburton, and RIG."

On BNN Bloomberg's Market Call, John Stephenson of Granite Point Research struck a more cautious note on markets overall, Shiller P/E "near historic highs," the U.S. 10-year yield "just over 4.6%", but said war "is good for oil prices… that's good for the companies I cover." He'd "overweight an oil producer at this point in the cycle," rated Whitecap Resources a buy toward the "mid-20s," and singled out Cenovus as a buy for its refining arm (from its Husky acquisition), which lets it "benefit from this crack spread." He also flagged a structural Canadian theme: Asian buyers want the heavier grades of crude Canada produces, not the light U.S. benchmark, at prices "six or seven times" what gas fetches in North America, an argument for Canadian LNG and oil finally reaching tidewater.

And from an actual operator, Shabam Garg, chairman and CEO of small-cap Saskatchewan heavy-oil producer Prospera Energy, described the economics on Company Interviews. His strategy is reactivating heavy-oil wells "that have been down for over 20 years" at "$150,000" a project with "six to eight month paybacks." He said Q2 2026 was "the best quarter in the company's history," with a netback (the cash a producer keeps per barrel after operating costs and royalties) of "about a $30 per barrel," helped by operating costs of "36 to $40 a barrel" and, crucially, a weak Canadian dollar at "1.41, 1.42… per US." His verdict on the moment: "really, really strong tailwinds here in the overall oil commodity price environment and expecting to stay with the escalation going on right now."

The Bottom Line

After four months of a market that shrugged off every headline, this was the week the shrug ended. The war widened, U.S. troops killed, energy facilities hit, a 21st week and counting, and a genuinely new danger opened when Iran's Houthi allies struck a tanker in the Red Sea, giving the world a second chokepoint to fear alongside a Strait of Hormuz that is now, by every account, effectively closed (seven tanker crossings a day, down from sixteen a week earlier). Brent finally cracked $100 for the first time since May. And yet the astonishing thing is how contained even that is: China's deliberate 3-5 million-barrel-a-day demand cut, heavy draws from strategic reserves now near their floors, and speculators who keep selling the rally have kept a four-month closure from becoming a $150-200 blowout.

The insiders with capital and barrels on the line, Rory Johnston, Rick Rule, John Stephenson, the S&P Global and J.P. Morgan desks, the operator at Prospera, keep pointing at the same tells. The buffers that bought calm are largely spent: 240-250 million of the 400 million barrels of coordinated reserve releases are gone, and the U.S. reserve sits at a 43-year low. The real scarcity has migrated from crude to fuel, diesel crack spreads over $80 a barrel, four times normal, with 12-14 million barrels a day of refining capacity dark across three continents, a third to half of it in a Russia now reduced to importing gasoline from India. Gasoline is back to $4 a gallon in the U.S.

Four things to watch from here. Whether the new Red Sea front holds, a single mine or a single successful strike, one guest warned, could freeze shipping for months through fear and un-insurability alone. Whether the record crack spreads keep lifting refiners (Valero, Phillips 66) and pump prices even as crude stays "only" around $100. Whether Ukraine's drones keep Russian diesel, over a tenth of the world's seaborne supply, offline into the autumn. And, the swing factor over everything, whether China's refiners come back hungry, as several expect, just as the world's inventory cushion runs dry. The crude market has finally noticed the war. The fuel market has been screaming for months, and, as more than one guest put it this week, by September there may be nothing left in storage to keep it quiet.