Oil Flows Resume Through Hormuz as Insurers Remain Wary

The Western alliance continues to disintegrate. Defense Secretary Hegseth used this week’s NATO meetings to publicly blast several European allies for refusing U.S. requests to use certain bases and airspace during the Iran conflict, calling their behavior “shameful” and announcing a six-month review of the American military footprint in Europe. The argument is essentially that… Everyone is hoping the U.S.-Iran deal holds, but Hormuz is still operating on political trust instead of commercial confidence. The U.S. has lifted its naval blockade; Iran and the U.S. have signed the 14-point memorandum; and tankers have started moving again through the strait (including Saudi supertankers carrying millions of barrels of crude). Still, shipping companies and insurers have to decide whether the route is safe enough to normalize operations. The mines can be cleared, but without any guarantees that are hoped for from the 60-day negotiation process that now starts, it may be premature. Shipowners need more confidence than they have right now. Lebanon is still the real stress test. The memorandum commits both sides and their allies to end military operations on all fronts, including Lebanon, but Israel has already said its troops will remain in a security zone in southern Lebanon. Iran is warning that continued Israeli occupation could amount to an annulment of the agreement, and Israeli strikes in southern Lebanon have not fully stopped. Politics, Geopolitics & Conflict Everyone is hoping the U.S.-Iran deal holds, but Hormuz is still operating on political trust instead of commercial confidence. The U.S. has lifted its naval blockade; Iran and the U.S. have signed the 14-point memorandum; and tankers have started moving again through the strait (including Saudi supertankers carrying millions of barrels of crude). Still, shipping companies and insurers have to decide whether the route is safe enough to normalize operations. The mines can be cleared, but without any guarantees that are hoped for from the 60-day negotiation process that now starts, it may be premature. Shipowners need more confidence than they have right now. Lebanon is still the real stress test. The memorandum commits both sides and their allies to end military operations on all fronts, including Lebanon, but Israel has already said its troops will remain in a security zone in southern Lebanon. Iran is warning that continued Israeli occupation could amount to an annulment of the agreement, and Israeli strikes in southern Lebanon have not fully stopped. The Western alliance continues to disintegrate. Defense Secretary Hegseth used this week’s NATO meetings to publicly blast several European allies for refusing U.S. requests to use certain bases and airspace during the Iran conflict, calling their behavior “shameful” and announcing a six-month review of the American military footprint in Europe. The argument is essentially that if allies want fewer U.S. military operations launched from their territory, Washington will have fewer troops and assets stationed there. Trump is arguing that Europe contributed little during the Iran crisis, including discussions over a possible Hormuz security mission that ultimately became unnecessary after Washington opened a direct channel with Tehran. More than four years into the war, the Russia-Ukraine battlefield is mostly defined by attrition (not forward movement). New data compiled by Harvard Kennedy School’s Russia Matters project shows Russian forces gained just 10 square miles of Ukrainian territory over the past month (DeepState estimates), while Institute for the Study of War data suggests Russia may have actually lost ground. Nothing much has changed. Russia now controls roughly 19-20% of Ukraine, for which it paid with some 1 million military casualties, massive destruction of armored vehicles, and endless attacks on energy infrastructure. On Thursday, in a massive new campaign, Ukraine launched nearly 200 drones toward Moscow, with several striking the city’s main oil refinery for the second time this week and forcing the temporary closure of all four airports. Discovery & Development China has completed construction of a 400 MW solar-hydrogen-storage project in Jiangsu that combines utility-scale solar generation, battery storage, and green hydrogen production in a single system. The facility includes a 60 MW/120 MWh battery installation and hydrogen production capacity of 482 tonnes per year. China appears to be treating the buildout of new projects as industrial energy hubs, not standalone power plants, using surplus solar generation to produce hydrogen that can be stored, transported and consumed by industry. This strategy is designed to resolve two key challenges at the same time: renewable power intermittency and hydrogen production costs. Shell has drilled a sidetrack appraisal well on its Merlin discovery offshore Namibia as the company gathers additional data on what it has described as the most promising subsurface result to date within its vast PEL 0039 license in the Orange Basin. The Merlin-1X well, drilled in the Coniacian play, encountered light oil, limited associated gas, and what Shell called good reservoir quality, marking the tenth well drilled across the 12,000-square-kilometer block. The discovery adds to a string of earlier finds, including Graff, Jonker, and La Rona, but Shell continues to emphasize a data-driven approach as it evaluates commercial viability. The results strengthen confidence in Namibia’s emergence as a major new hydrocarbon province, while highlighting the industry’s growing focus on the Coniacian interval as operators search for discoveries capable of supporting large-scale development projects. ReconAfrica is approaching the moment that will determine whether Namibia’s Kavango Basin becomes one of the most significant onshore oil discoveries of the decade. The company has begun production testing at its Kavango West 1X discovery, the first cased production test ever conducted in Namibia, targeting six separate intervals across more than 1,300 feet of hydrocarbon-bearing reservoir. Investors have been waiting years for this stage. Exploration wells can identify oil, but production tests determine whether it can flow at commercial rates. The well has already encountered 75 meters of net hydrocarbon pay, more than 560 meters of hydrocarbon-saturated reservoir, oil fluorescence, surface oil shows, and highly fractured carbonate formations that could provide the permeability needed for strong production. Results are expected by late July. If the test confirms commercial flow rates, attention will quickly shift to the planned Kavango West 2A appraisal well and the broader Damara Fold Belt, where ReconAfrica and its partners control a vast acreage position across one of the world’s last major frontier basins. Deals, Mergers & Acquisitions Venezuela has signed 5 agreements with Shell that formalize the company’s participation in the 7 Tcf Loran offshore gas field, one of the largest undeveloped gas discoveries in the Caribbean. This adds to Shell’s existing gas assets in Venezuela, including the 4.2 Tcf Dragon field and potentially additional offshore developments tied to Trinidad & Tobago’s LNG industry. We are now seeing Venezuela move from separate project approvals toward the creation of a regional gas export corridor. Rather than building costly new LNG infrastructure from scratch, Caracas is planning to use Trinidad’s existing liquefaction capacity and Shell’s position on both sides of the maritime border. Loran, Dragon, and other cross-border gas fields collectively contain more than 11 Tcf of resources and could eventually provide a significant new source of gas for Atlantic LNG exports. Saudi Aramco is reportedly exploring the acquisition of a 49% stake in GüzelEnerji, the Turkish fuel distributor owned by the military pension fund OYAK. The deal would give Aramco a significant downstream position in one of the region’s largest energy markets. GüzelEnerji controls more than 1,000 fuel stations across Turkey under the TotalEnergies, M Oil, and Türk Petrol brands and operates storage and LPG facilities with a combined capacity of 550,000 cubic meters. Ankara and Riyadh are deepening ties after years of souring, including through a recent $2B renewable energy deal. The Trump administration has secured another major offshore wind buyout, with Invenergy agreeing to surrender four offshore wind leases worth roughly $765 million and redirect the capital into natural gas-fired power plants and geothermal projects across the United States. The agreement covers leases in the New York Bight, California, and the Gulf of Maine and brings the total value of offshore wind investments redirected under the administration’s buyout strategy to more than $2.5 billion. Rather than attempting to halt projects through regulatory battles, Washington is increasingly offering developers a path to recover lease investments in exchange for shifting capital into energy sources aligned with the administration’s “Energy Dominance” agenda. The policy is rapidly reshaping the U.S. offshore wind sector, redirecting billions of dollars away from planned wind developments and into natural gas, LNG, oil, and other conventional energy infrastructure while triggering legal challenges from states that argue the federal government lacks authority to unwind offshore leases through negotiated settlements. Repsol is moving deeper into Venezuela as foreign oil companies race back into the country under newly eased U.S. licensing rules. The Spanish major is seeking to add the Horcón field in northwestern Venezuela to its portfolio, expanding around its existing Barua and Motatan assets while also advancing agreements with PDVSA and Eni tied to the Perla gas project and the Petroquiriquire joint venture. Repsol currently produces around 45,000 bpd in Venezuela, but is targeting a 50% increase over t