Source: EOA, 2026

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Libya is a major African hydrocarbon producer with a long record of exploration and development. Recent OPEC data show that its proven natural gas reserves reached 730 billion cubic meters (bcm) in 2025, ranking Libya fifth in Africa after Nigeria, Algeria, Egypt, and Mozambique, and ahead of Congo and Cameroon, as shown in Figure 1.

Libya’s unconventional gas potential is even more striking. The U.S. Energy Information Administration (EIA) estimates the country’s technically recoverable shale gas resources at 3,446 bcm, more than four times the size of its proven conventional reserves.

For context, Libya’s technically recoverable shale gas resources are broadly in line with the estimated gas resources of the Levant Basin, which the U.S. Geological Survey (USGS) places at around 3,455 bcm. Discoveries in the Levant Basin have helped turn the Eastern Mediterranean into one of the world’s most attractive hydrocarbon provinces for international oil companies.

Despite this large resource base, Libya remains one of the “least explored and least developed” gas frontiers in the Mediterranean region. Political instability, security challenges, and prolonged underinvestment since the 2011 conflict have held back exploration and development, leaving much of the country’s gas potential undeveloped.

Successfully developing Libya’s conventional and unconventional gas resources could have transformative economic and energy-sector effects. Additional gas production could help satisfy rapidly growing domestic demand, ease chronic power shortages, revive upstream investment, and potentially re-establish Libya as a more important gas supplier to Europe. Realizing this potential, however, will require a stable investment climate, clear energy policies, substantial capital spending, advanced technologies, and a regulatory framework that balances economic development with environmental and social considerations.

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Supply Volatility and the Tightening Domestic Balance

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https://urldefense.proofpoint.com/v2/url?u=https-3A__x.com_zerohedge_status_2067013516431642830&d=DwMFaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=Gf9NMEbr1W5qlhivzlBUxCC58NW4pJ8xGPjRFtOp2bC0rUOrvn8TSnkMsNYqaqgc&m=cQkAcPFTDinvsiFUfS0aGxMC30kBMQ6bNiwNsqTYvQV4iXxaxMHAgt2TXrtbi05y&s=znoedbRUvaAjmocC48hvpkQzh90ocOCgpWHbGzBFb2s&e=

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Summary

Asian crude and refined product markets have largely retreated to pre-war pricing levels following a US-Iran agreement to end the Middle East conflict. Spot premiums for Dubai crude, diesel, jet fuel, naphtha, and fuel oil have fallen sharply as additional cargoes from the UAE, Kuwait, and other exporters improve supply expectations. However, uncertainty over how quickly shipping can safely resume through the Strait of Hormuz and elevated war-risk insurance costs continue to support prices above pre-war norms. Bellow is a presentation of evidence that the MOU is serious with fears of third party interferences.

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EOA’s Main Takeaway

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The Deal Based on the News

The Trump administration and Iran have reached a 60-day memorandum of understanding to halt hostilities, reopen the Strait of Hormuz, and lift the U.S. naval blockade on Iranian ports. Nuclear-related issues will be handled in subsequent negotiations. President Trump described the agreement as “complete,” hailing it on Truth Social as a significant diplomatic achievement. If fully implemented, the pact could rapidly ease tensions in global energy markets by restoring safe passage through one of the world’s critical oil chokepoints.

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Key Elements of the Agreement:

• Strait of Hormuz: Iran will clear mines and reopen the strait to international shipping free of tolls.

• Naval Blockade: The United States will lift its blockade, enabling normal operations at Iranian ports to resume.

• Sanctions Relief: Limited easing of sanctions would permit Iran to export more oil, contingent on compliance with the terms.

• Nuclear Commitments: Iran has agreed not to advance its nuclear weapons program during the initial 60-day period, with more comprehensive discussions deferred to later talks.

The agreement is not a final peace settlement, but an interim framework intended to stop the immediate fighting, stabilize oil flows, and open the door for broader, longer-term negotiations.

Timeline for Implementation

President Trump stated that reopening of the strait is authorized immediately. However, full normalization will depend on mine-clearing operations, formal rollout, and the upcoming signing ceremony.

• A formal signing is anticipated as early as Friday, potentially in Switzerland or Geneva.

• Initial shipping traffic could resume in the coming days, while complete restoration of normal operations is expected to take up to 30 days.

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What Did the Permabulls Miss?

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Guest Column by Mark Mathis

Wait... what?

Did I—an American, and a Texan at that—just compliment OPEC?

Yes, I did.

And the reason says as much about our culture as it does about OPEC’s latest marketing campaign.

We live in an age of constant distraction. Most people don’t spend even a few seconds thinking about the physical realities that make modern life possible. Instead, we’re fed simplistic narratives—”Oil is bad!”—until they become accepted as fact.

The problem is that those narratives often collide with reality.

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Oil is not some relic of the past. Other than air, water, and food, it is arguably the most important physical substance supporting modern life. It’s embedded in countless products, powers the machines that manufacture them, and moves raw materials and finished goods around the world. Remove oil from society and modern civilization disappears.

That’s the reality OPEC is highlighting through a new series of short videos and images on various social media platforms. Healthcare? Oil. Transportation? Oil. Entertainment? Oil. Sports? Oil. World Cup? Oil. Humanitarian aid? Oil. Space travel? Oil. Fashion? Oil. (I listed seven links below the article for the readers to watch)

Pick almost any aspect of modern life and you’ll find petroleum somewhere near the center of it.

So why does this matter?

Because bad ideas become dangerous when they become conventional wisdom.

Take the so-called “energy transition.” The media repeats the phrase so often that few people stop to question it. Yet after trillions of dollars invested in wind, solar, and batteries, oil, natural gas, and coal still provide more than 81% of the world’s energy. Four decades and trillions spent have reduced their share by only six percentage points. Does that sound like an obvious transition?

The widespread belief that oil is becoming less important has helped justify policies that discourage investment in the resource most critical to modern prosperity. When people stop asking, “Is that true?” they become vulnerable to narratives that are likely to ultimately work against their own interests.

If you value freedom—the freedom to travel, produce, trade, and live comfortably—then you have a stake in maintaining reliable and affordable energy supplies. Public understanding of oil’s role in modern life matters.

I learned that lesson firsthand.

Fifteen years ago, after leaving journalism and entering the energy world, I produced a documentary called spOILed. The film challenged the popular claim that America was “addicted to oil.” My argument was the opposite: we’re spOILed by oil. Modern life works because of what petroleum makes possible.

The film was successful within energy circles. It sold out theaters, moved thousands of DVDs, and generated tremendous discussion. But it ultimately reached only a tiny fraction of the public.

One reason was obvious: convincing people to watch a 90-minute documentary is difficult. It’s much harder today.

What OPEC clearly understands is that messaging must meet people where they consume information. In the age of social media, attention spans are measured in seconds, not hours. Short, well-produced content has a far better chance of reaching people than long-form explanations.

That’s especially true for younger generations, who will bear the consequences if energy policies fail to keep pace with reality.

For years, environmental activists successfully targeted students and young adults with emotionally powerful messaging condemning the use of oil. Meanwhile, much of the oil and natural gas industry focused its communications on network television and newspapers. The result was predictably underwhelming.

OPEC’s campaign represents an attempt to compete in the arena established by anti-oil forces. I applaud that effort. But I do have one suggestion: Add humor.

When I made spOILed, some of the most effective moments came from comedy. People can absorb only so much information before tuning out. Humor keeps them engaged. If I were making the film today, I’d make it shorter and funnier.

The competition for attention is fierce. Every second counts.

So, here’s my challenge: OPEC has started the conversation. Now let’s see others join it. ExxonMobil, BP, Shell, Chevron, Petrobras and the rest should be competing to produce the most engaging, informative, and entertaining content possible.

For too long, misconceptions about oil have gone largely unchallenged.

It’s time for a better conversation—one that doesn’t threaten your freedom or the comfort and productivity provided to you by oil.

Mark Mathis is a media consultant, author, and the Director/Producer of the documentary films spOILed and Fractured.

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Links to spOILed:

Other links to spOILed:

https://www.amazon.com/spOILed-the-Movie/dp/B00Z2G8ZFY

https://www.imdb.com/title/tt2105071/

***

Links to Short Videos by OPEC

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As of 31 May 2026, European gas storage levels have risen to approximately 40.1% of total capacity, up from 32.7% at the end of April. However, Europe continues to face challenges in refilling its underground facilities ahead of the coming winter. Despite the monthly increase, this is the lowest late-May storage level recorded since 2021, with inventories remaining well below the five-year average, as illustrated in Figure 1. The slow pace of injections is primarily driven by persistently low LNG inflows, caused by ongoing geopolitical tensions in the Middle East and shipping disruptions impacting flows through the Strait of Hormuz (SOH).

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US commercial crude inventories fell 7.2 mb to 426.5 mb, remaining within the five-year average and above the danger zone. The SPR dropped sharply to levels near Biden-era lows. Product inventories are below the five-year range, while refinery utilization rose to 95.3% and demand increased.

Despite these large draws and record exports, WTI stayed around $90/b. The global supply-demand gap is smaller than Hormuz headline supply losses due to significant demand decline. Inventory draws were widely anticipated since early March. Additional untracked supply from Hormuz “leakage” is also flowing into the market. With U.S. refineries already running near maximum capacity, tighter product stocks are unlikely to drive crude prices significantly higher.

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Note that the recent SPR withdrawals of 66.25 mb have almost entirely offset the 66.64 mb that were added earlier.

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Source: Tank News International, 2020.

Nothing sends a chill through oil market veterans quite like a chart showing a dramatic plunge in global oil inventories — especially with the Hormuz crisis showing no signs of resolution and peak summer driving season just around the corner. That very chart has gone viral on social media over the past week, sparking a wave of bullish euphoria. Some analysts are now boldly calling for Brent to surge more than 50% to $150 per barrel.

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Add in China’s historic collapse in oil imports and the expected sharp draw in Chinese inventories, and you have what looks like the perfect bull-case scenario.

Here’s the problem: the chart is wrong and misleading — and the decline in Chinese oil inventories is actually bearish.

Shocked yet?

Here’s the bigger picture: What matters to the market right now is not the headline loss of 11 mb/d of production or the difference between supply before and after the crisis. What truly counts is the balance between current supply and demand. That gap has narrowed. Demand has fallen while the overall supply picture has actually improved: rerouting via Saudi and Emirati pipelines and withdrawals from the SPRs.

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Mixing Apples and Oranges

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May 28, 2026

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• US crude oil inventories decreased by 3.327 mb to 441.686 mb last week, per the EIA.

• Cushing inventories fell by 2.794 mb to 23.024 mb.

• The SPR decreased by 9.063 mb/d to 365.112 mb.

• Gasoline inventories declined by 2.572 mb to 211.591 mb.

• Distillate inventories fell by 2.107 mb to 100.799 mb.

• US crude oil imports decreased by 0.804 mb/d to 5.212 mb/d, and crude exports declined by 1.164 mb/d to 4.440 mb/d.

• The EIA estimates US oil demand increased by 0.493 mb/d last week to 20.943 mb/d.

• Refinery utilization increased from 91.6% to 94.5%, with gross crude inputs into refineries increasing from 16.642 mb/d to 17.171 mb/d.

EOA’s Main Takeaway

Three things are now clear:

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Source: EOA, 2026 (for illustration purpose only)

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In recent years, China has emerged as the dominant driver of global natural gas demand growth, fundamentally reshaping LNG markets, pipeline geopolitics, and long-term energy trade flows among major exporters. Over the past five years, China’s gas consumption has grown rapidly despite economic headwinds, fueled by ambitious environmental policies, national and energy security priorities, and ongoing industrial modernization.

China has skillfully leveraged its strong market position by capitalizing on three key advantages:

• Strong growth in domestic production, which reduces its need for LNG imports.

• Expanding access to cost-competitive pipeline gas, especially from Russia.

• Strategic long-term LNG contracts with key suppliers, notably Qatar and Australia.

• Build large gas inventory to balance short term fluctuations and enhance energy security

As a result, the evolution of China’s gas market continues to exert significant influence on global LNG pricing, Russia’s post-Europe export strategy, and the long-term outlook for US LNG expansion.

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Historical Gas Demand Growth in China

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Global Oil Inventories: Separating Fact from Narrative

Major organizations, analysts, and influential social media accounts continue to warn of a massive decline in global crude inventories, citing an “11 mb/d gap” and the loss of over one billion barrels, along with talk of tank bottoms and depleted reserves. None of this is accurate.

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This article was posted in late 2023 but remains relevant today after the UAE left OPEC. The above is from

an old paper that proves that OPEC is not a cartel.

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The oil industry, just like any other extractive industry, is capital intensive with its costs mostly being sunk cost, while the operating cost is relatively small.  During a period of an economic downturn and very low oil prices, producers focus on the operating cost. They continue to produce despite the hefty losses. As history shows us, the result is cut-throat competition and a waste of the world’s scarce resources.

Extreme Volatility Hurts Producers and Consumers

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May 6, 2026

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Source: Kpler, 2026

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The News:

Oil prices slumped sharply amid growing optimism over a potential end to the US-Iran conflict.

Reports from Axios indicated the US believes it is close to securing a one-page framework memorandum of understanding (MoU) with Iran to end hostilities. This would include lifting restrictions on the Strait of Hormuz. The US expects Iranian responses on key points within 48 hours, marking the closest the parties have come to an agreement. Iran has signaled willingness for a “fair and comprehensive” deal, and both sides have outlined a path for further nuclear negotiations.

Brent crude fell more than 13% at one point. (or over $6–7), briefly dipping below $100 to around $98 before settling near two-week lows. West Texas Intermediate (WTI) dropped similarly, losing up to 7.7% to about $95.50. These moves followed a 4% decline the previous session and represent some of the largest daily drops since mid-April. The declines reflect expectations of resumed tanker traffic, easing supply disruptions that had driven prices to highs not seen since 2022. Out comments in this short Note are listed below.

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EOA’s Main Takeaway

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Source: EOA, 2026 (image created by Gemini)

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LNG has emerged as a cornerstone of the global energy system. It delivers critical flexibility, enhances security of supply, and offers a practical, scalable bridge for countries shifting toward lower-carbon energy mixes. Over the past decade, global LNG demand has grown steadily, driven by robust consumption in Asia, Europe, and emerging economies seeking cleaner alternatives to coal and oil. At the same time, LNG has helped bridge widening supply-demand gaps in traditional gas-producing countries experiencing sharp declines in domestic production.

A major driver of this expansion has been the rapid advancement of floating LNG technologies across the entire value chain. On the supply side, floating liquefaction (FLNG) has unlocked previously stranded gas resources. On the demand side, Floating Storage and Regasification Units (FSRUs) have transformed market access by enabling countries to import LNG without the delays and high capital costs of conventional onshore terminals. For emerging and seasonal importers such as Egypt, FSRUs have removed longstanding barriers to entry.

By providing faster deployment, lower upfront investment, and greater operational flexibility, FSRUs have accelerated market development, reshaped investment patterns, and significantly broadened the global reach of LNG demand.

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The Development of Global LNG Trade

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