Energy Prices Hold Steady As The World Waits For What Comes Next

It’s a relatively quiet start for energy markets Tuesday with modest gains for refined products and break even crude oil prices, as the world awaits word of what comes next with the war and its fallout in the strait, while being continuously inundated by words that may or may not have any actual meaning. For now, the fact that missiles aren’t flying and vessels aren’t moving seems to be enough to hold prices in a neutral stance, in a bit of relative calm during the storm.

The EIA published a look at estimated strategic petroleum reserves by country Monday, offering a glimpse into just how long countries can hold out with the strait closed. The headline chart is misleading as the EIA is combining all of China’s government held and commercial inventories into one pool, while only listing the U.S. SPR. That said, there’s no mistaking how China’s buying spree of an incremental million barrels per day in 2025 looks particularly prescient in 2026.

Speaking of 2025, think back to a year ago when the U.S. tried to impose tariffs on Canada and how silly those efforts appear today when we rely on them for 60% of our imported oil and (thankfully) are no longer buying 5 million barrels/day from OPEC nations like we were 20 years ago.

The Atlantic Hurricane season is just over 1 month away, and early forecasts call for a slower year for tropical development in the Atlantic basin, and the Gulf, due to the high likelihood of an El Nino pattern forming in the pacific. A Fox Weather analysis published this week highlights why development in the gulf is less likely during an El Nino year, but also offers a reminder that major storms can and will hit the U.S. Gulf Coast despite the odds being lower.

P66 reported an upset in an FCC unit at its 150mb/day Borger TX refinery. That unit was reportedly shut for a full day while repairs and an investigation into the cause of the upset are ongoing.

That facility is set to go from an afterthought in a desolate part of the country, to an origin point that could soon be bringing barrels to some of its largest metro areas. P66 & Kinder Morgan announced a successful open season on their “Western Gateway” pipeline system that will use a combination of existing and new pipelines to bring refined products from the (often oversupplied) Mid Con markets, through the TX panhandle on their way to Phoenix and LA. The target date for that project to be up and running by mid-2029.