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The Energy Report

Phil Flynn
http://www.pricegroup.com/
pflynn@pricegroup.com


Gripping. The Energy Report 08/24/2026

Who has Control of the Strait Of Hormuz? Hint, it is not Iran. Oil futures opened lower Sunday night after reports suggested that Iran was losing control of the Strait of Hormuz or the perception that they had control. ZeroHedge reported the development shortly after President Trump declared the strait American territory. Axios said nearly 200 ships passed through the strait last week—about 150 more than the previous week—and that 40 tankers transited it on Friday night. Still, the more pressing concern is the shortage of diesel supplies. Pakistan was also reportedly seeking talks with Iran to secure another ceasefire or peace agreement.

Still Iran is talking tough like they can stop it. The Supreme National Security Council Secretary Mohsen Rezaei just warned that if the U.S. economic pressure continues, “not even one drop of oil will be exported, neither through the Strait of Hormuz nor from anywhere in the Persian Gulf.” Tehran is explicitly tying new sanctions to a full blockade of the world’s most critical oil chokepoint. The threat is one thing. Their ability to actually follow through for any meaningful period is another — and the oil market has not treated it as credible so far. Iran is losing its grip not only of the Strait of Hormuz but reality.

Meanwhile, Washington is pivoting hard from strike threats to pure economic warfare. Treasury Secretary Scott Bessent is set to roll out a fresh package of measures later today designed to more effectively isolate the Islamic Republic. These build on decades of existing sanctions and could hit Iran’s biggest remaining trading partners — China, Turkey, and India. Bessent has framed it as an “economic D-Day,” the toughest financial offensive yet, aimed at collapsing the regime’s remaining economic lifelines and ending this near six-month conflict.

The U.S. military side remains upbeat and confident after systematically degrading Iran’s capabilities. Markets will be watching whether Tehran’s bluster finally moves the oil needle or whether Bessent’s sanctions announcement does the real damage.

On a separate front, the renewed U.S.-Canada trade dispute has also registered little impact on oil prices. Talks collapsed over the weekend, triggering 50% U.S. tariffs on roughly $20 billion of Canadian goods and Canadian retaliatory measures set for early September. But crude appears largely shielded — the U.S and Canada can’t afford to mess with it.

And from a technical viewpoint oil pulled back from the upper Bollinger band which means that we could start to work lower into this range after filling the gap that was left late last week there was tough overhead resistance and now as we head in the shoulder season we’re starting to see a little bit of relief the diesel crack spread has come down a bit which is good news for our farmers who are going to have to get ready to start harvesting and hopefully diesel prices at the pump will ease just a little bit. And this the oil story of the day is you don’t want to bet against U.S. military and the sanctions on Iran should be the final now in their coffin.

Natural gas is stuck in a tight range right around the mid-$2.70s, with the September contract hovering near $2.77 this morning after giving back a bit of last week’s gains. It’s the classic late-summer grind — not enough heat to light a fire under demand, not enough cold to scare anyone, and production still pumping at record levels. But don’t get too comfortable. The pieces are starting to move, and this market rarely stays quiet for long once the balance tips.

LNG exports are picking up as more supply trains come back online after the usual summer maintenance. Feedgas demand has been running in the 17-plus Bcf/d range, with terminals like Corpus Christi Stage 3 continuing to ramp and others recovering from outages. Golden Pass is still ramping its first train, and the overall fleet is pushing higher volumes toward Europe and Asia. When those trains fire up, they suck gas out of the domestic market like a giant vacuum. That’s the bullish counterweight to all this production.

And production? We’re talking record territory. The EIA has U.S. marketed natural gas production on track to average about 122.5 Bcf/d for 2026, blowing past last year’s record. Permian associated gas and Haynesville are leading the charge. That’s a lot of molecules looking for a home, which is why we’ve been seeing solid storage builds even through the heat of summer. Last week’s report showed another injection, keeping inventories comfortable relative to the five-year average.

In Europe for gas they have Issues. Celsius Energy writes that -European natgas inventories have finally done what they’ve been trending towards for months: dropping below 2021 to 5-year lows for the date. As of August 22, inventories now stand at 2413 BCF, a steep -677 BC deficit vs the 5-yr avg. Storage levels are on track to peak for the season at under 2700 BCF by late October.

Still I think overall weather here in the United States and Europe is going to be key for this market and that’s why you need to download the Fox weather app today to stay up with the latest also on top of that you should stay tuned to the Fox Business Network because they are the only network in the world that’s invested in you at the same time you need to sign up for the film and daily trade levels open an account with Phil Flynn and his team today by calling us at 888 2645665 you can always e-mail me at pflynn@pricegroup.com.



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