Energy and Oil Sector

Crude oil prices rallied on Friday following fresh tanker attacks in the Strait of Hormuz and stalled ceasefire talks between the United States and Iran. Brent futures settled at $88.52 a barrel, up $1.45, while West Texas Intermediate finished at $82.40 a barrel, up $1.15. The gains were driven by deteriorating shipping traffic through the strait, which normally handles one-fifth of global oil and liquefied natural gas supplies. Treasury Secretary Scott Bessent warned that the U.S. could maintain an indefinite naval blockade and impose unprecedented economic isolation on Tehran after diplomatic efforts faltered. Two vessels operated by the state-owned Abu Dhabi National Oil Company were attacked in the channel on Thursday, alongside a separate drone strike that suspended crude exports from Russia's Sheskharis terminal at Novorossiysk. Despite tightening Middle East supplies, oil futures have been partially cushioned by weaker demand growth forecasts from OPEC and the International Energy Agency, alongside the largest weekly increase in U.S. crude inventories in more than three and a half years.

Doosan Enerbility secured a contract to supply critical components for TerraPower's advanced small modular reactor project in Kemmerer, Wyoming. Under the agreement, the South Korean plant builder will manufacture the containment vessel, guard vessel, support framing, and internal structures for the Natrium plant. The $4 billion nuclear facility is deploying a 345-megawatt sodium-cooled fast reactor designed to scale output up to 500 megawatts using an integrated energy storage system. Construction on the project kicked off in April following approval from the US Nuclear Regulatory Commission, with a target opening date of 2030. The deal expands on a preliminary review agreement signed by the two companies in December 2024 to prepare the reactor's core components for production. The facility marks a prominent commercial coal-to-nuclear conversion and ranks among the first next-generation US reactor designs to reach commercial-scale construction.

cbsnews.com reports that the conflict involving Iran has throttled traffic through the Strait of Hormuz, pushing gasoline past $4 a gallon and fueling broader inflation as strikes on commercial vessels raise safety concerns. The Strait of Hormuz normally handles one-fifth of the global oil supply, and the disruption leaves no alternative path to redirect energy supplies because the waterway is where the oil originates. A new report from Oxford Economics highlights 26 other major chokepoints with high trade volumes, including the Strait of Malacca, the Taiwan Strait, the Strait of Gibraltar, and the Suez Canal. Geopolitical conflicts and climate change are driving the greatest threats to these trade routes, as seen in the Panama Canal where drought and El Niño are lowering water levels and limiting cargo capacity. Rerouting vessels around blocked or constrained chokepoints extends time at sea, increasing wages, fuel costs, and freight rates through a growing mismatch between shipping supply and demand.