Brent crude is heading for its biggest weekly drop in two months as markets bet on a 60-day ceasefire extension and partial reopening of the Strait of Hormuz.

Friday, May 29, 2026

ICE Brent is set to post its largest weekly loss in two months, dropping by almost 10%, as media reports present a 60-day extension of the current ceasefire and a temporary Hormuz navigation deal as close to being a done deal. Whether US President Trump and Iran’s Supreme Leader Khamenei agree to the deal or not, Brent at $92 per barrel suddenly feels much more comfortable for oil importers. 

Japan’s Oil Imports Collapse on Iran War. According to data from Japan’s Ministry of Economy, Trade and Industry (METI), the Asian country’s crude imports plummeted by 66% from a year ago to just 850,000 b/d, the smallest monthly volume since 1967, as flows from the Middle East have dissipated. 

Mozambique Questions Total’s Cost Overruns. The government of Mozambique has challenged French energy giant TotalEnergies (NYSE:TTE) with its $2 billion cost overrun estimate for the Mozambique LNG project, having commissioned a third-party audit that couldn’t confirm the cost of the 5-year hiatus. 

BP’s Ousted Chair Fires Back. Albert Manifold, the short-lived chairman of British Petroleum (NYSE:BP) fired earlier this week, snapped back at the UK oil major by saying he was fired without warning or explanation and will challenge the decision, rejecting the ‘false bullying narrative’ put forward by BP.

US Tightens the Screws on Iran Oil Sales. Amidst speculation that the US-Iran ceasefire extension could be formalized over the upcoming days, the US Treasury Department tightened sanctions on Iran’s oil trade, adding 8 tankers and 15 commercial entities based in Hong Kong and the UAE to its OFAC list.

Kazakhstan’s Key Oil Field Goes Down After Accident. Oil production at Kazakhstan’s largest oil field, the Chevron-operated Tengiz (NYSE:CVX) fell sharply on May 26 due to an undisclosed accident, with media reports suggesting output at the field plunged from 950,000 b/d to just 60,000 b/d.

Scorching Heat Prompts Korea to Buy More LNG. South Korea’s bracing for two weeks of intense heatwaves, prompting the country’s power utility firms to ratchet up purchases of LNG to avoid supply shortfalls with 6 LNG cargoes already diverting towards South Korean ports, mostly from China. 

Russia Resumes Northern Sea Route Shipping. The Novatek-controlled Christophe de Margerie LNG carrier became the first vessel to start transiting the Northern Sea Route via the Arctic Ocean this year, the earliest start since 2020, carrying liquefied gas from the sanctioned Arctic LNG 2 project to China. 

Greek Shippers Go on a Spending Spree. Greek shipowners United Overseas and Navios Maritime Partners ordered 18 VLCCs last week, equivalent to around 2% of the currently operational fleet of very large crude carriers, all to be built in Chinese shipyards on cash garnered from windfall freight revenues.

Europe to Approve US Trade Deal in June. The European Parliament is expected to approve the EU-US trade deal agreed with US President Trump in July last year on 16 June, setting zero tariffs on a wide range of US goods including iron, steel, aluminium, fertilizers as well as agricultural goods. 

Chevron Shareholders Back Current CEO. Shareholders of US major Chevron (NYSE:CVX) rejected a proposal brought by the National Legal and Policy Center and supported by proxy advisor Glass Lewis to appoint an independent board chair separate from Chevron’s CEO role, supporting Mike Wirth.

Russia Warns Armenia of Gas Supply Fallout. Russia has warned Armenia that if its accession talks with the European Union continue (being already a member of the Moscow-led Eurasian Economic Union), the Kremlin would terminate preferential prices for the supply of natural gas and petroleum products.

BlackRock Hypes Up Giant Mining M&A Deals. US investment giant BlackRock (NYSE:BLK) has advocated for consolidation among large mining companies, saying it would open the sector to generalist investors on a scale unseen so far, hinting at a potential revival of a Rio-Glencore merger.

Export Tax Slashes Brazil Oil Outflows. Brazil’s oil exports are expected to drop by 50% in May from a year ago after the country’s government introduced a 12% export tax two months earlier, with preliminary data showing the pace of outflows dipping to 216,700 tonnes per day (1.6 million b/d). 

Russia to Build Kazakhstan’s First Nuclear Power. Russia’s Rosatom has signed an agreement with Kazakhstan to build the first nuclear power plant in Central Asia at a cost of some $16.5 billion, with construction set to begin next year and commissioning of the first reactor planned for early 2034. 

Dry Bulk Freight Shifts into a Higher Gear. Longer routes around the Cape of Good Hope, rising bunker fuel costs and robust raw material flows have been combining to push the Baltic Exchange’s dry bulk freight index to its highest since December 2023, seeing a 5% jump this week across all vessel segments.

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(Credit: Al Gonzalez/iStock by Getty Images) 

The region’s central banks have built significant credibility over two decades, anchoring price expectations and bolstering resilience against external shocks

May 26, 2027/IMFBlog

Philip Barrett, Gonzalo Huertas

As the conflict in the Middle East raises oil prices and threatens another round of inflation, Latin America’s well-anchored inflation expectations are poised to help cushion the impact—even as some major central banks have looked to cut interest rates.

For most countries in the region, post‑pandemic supply shocks have not raised long‑term inflation expectations—what people, businesses, and forecasters expect inflation to be in the years ahead—even amid higher near‑term inflation. Our study shows that these well‑anchored expectations help limit the transmission of energy and other commodity price shocks to consumer prices, because higher import prices today are not expected to translate into persistently higher inflation tomorrow.

The paper builds on earlier IMF work to show how stronger anchoring significantly reduces the inflationary impact of terms‑of‑trade shocks—when the price of a country’s exports changes relative to the price of its imports—in emerging markets. Stable expectations may help policymakers better manage trade-offs in the face of oil price shocks.

Latin America’s major economies now benefit from better‑anchored inflation expectations, the result of institutional reforms begun about 25 years ago. Those changes included adopting inflation targeting, strengthening central bank independence, and ending fiscal dominance.

These reforms helpfully influenced beliefs about prices. Though inflation forecasts in Latin America remain, on average, further from target than in advanced economies, the dispersion in views is similar across both country groups. This is consistent with policymakers who are seen as credible and are operating within frameworks subject to institutional constraints.

Over the past two decades, both tails of the distribution of inflation expectations—views that price increases would be too high or low—have improved. People who once expected inflation to be too high, as well as those who expected it to be too low, have gradually shifted their views toward central banks’ targets.

This hard-earned credibility, however, is also easy to lose. Our paper finds that tighter-than-expected monetary policy can help deliver modest advances in beliefs, increasing anchoring moderately and with a delay. In contrast, unexpectedly loose monetary policy can have much stronger negative effects, leading to expectations losing their anchor.

Case studies from countries such as Brazil, Chile, and Argentina illustrate how changes to monetary policy frameworks affect expectations and offer important lessons for policy design:

• The appropriate monetary regime depends on context. For example, although inflation targeting is often a key component of policy regimes which deliver macroeconomic stability, it may not always be ideal when inflation is very high. If inflation is indeed very high, simpler regimes, such as those with exchange rate or monetary targeting components, may initially be more appropriate.
   
• This is not to say that inflation targeting demands perfectly tranquil conditions to be implemented. Though a gradual introduction under stable macroeconomic conditions may appear to be best, inflation targeting can still help anchor expectations even when adopted rapidly in a challenging economic environment. The introduction of inflation targeting in Brazil in 1999 is one such case. In such conditions, though, transparency and accountability are critical to build confidence in the central bank’s policy objectives.
   
• Broad institutional support is essential in almost all cases. Inflation targeting regimes are unlikely to succeed when fiscal or other policies undermine the central bank’s stated objective, or if broader political commitment to low and stable inflation is lacking. High levels of dollarization can add to disinflation challenges.
   

Latin America’s experience reflects a payoff from reforms a generation ago. Frameworks built around inflation targets and independent central banks helped foster stability and close an era of high and volatile inflation. This progress matters as new shocks emerge, with more-anchored inflation expectations helping to offset temporary price pressures.

The largest disruption in the global oil market’s history poses a new test, but we see a clear pattern: where expectations are well anchored, economies can better absorb such shocks without destabilizing inflation. This ability to weather turbulence comes from monetary credibility built over decades, but it’s not guaranteed. Inappropriately loose policy or abrupt changes to frameworks can quickly erode hard‑won gains, underscoring why preserving credibility remains central to sustaining stability when it matters most.

—This blog draws on the departmental paper “Anchoring Inflation Expectations: Evidence from Latin America during the Post-COVID Stress Test” by Philip Barrett, Federico Duenas, Christopher Evans, Eric Huang, Gonzalo Huertas, and Tannous Kass-Hanna.

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May 26, 2026/Oilprice.com

Tom Kool
Editor, Oilprice.com

In this week’s newsletter, we will take a quick look at some of the critical figures and data in the energy markets this week. 
    
We will then look at some of the key market movers early this week before providing you with the latest analysis of the top news events taking place in the global energy complex over the past few days. We hope you enjoy.

Probable Super Niño Adds Insult to Injury for LNG Buyers

– The arrival of a powerful El Niño this year, potentially even a ‘Super Niño’ with sea surface temperature anomalies exceeding +2°C, could roil commodity markets simultaneously to ongoing shocks from the US-Iran war.

– Hotter weather will boost cooling demand and lift overall consumption of natural gas – signs of this happening can already be seen from China finally catching up with its year-ago pace of LNG imports and generally buying more.

– LNG flows have already started to shift towards Asia as the region’s JKM benchmark trends above $18 per MMBtu, whilst Europe’s delivered LNG prices are as low as $16.4 per MMBtu.

– The arbitrage to Europe doesn’t even work for US LNG exporters, despite the relative geographic proximity, suggesting European prices need to climb higher to attract any seller interest.

– A severe El Niño usually suppresses rainfall over India, weakening its sowing season, whilst bringing extreme heat and droughts to northern China and Japan (which saw a spike for summer power prices in recent weeks).  

Market Movers

– UK oil major BP (NYSE:BP) has removed Albert Manifold as its Chairman of the Board with immediate effect and appointed Ian Tyler as interim, citing compliance with governance standards.

– Colombia’s national oil company Ecopetrol (NYSE:EC) has launched a tender offer to acquire control of Brazilian offshore producer Brava Energia with a 51% stake, having already purchased 25% earlier this year in April.

– Italian oil major ENI (BIT:ENI) has reached a final investment decision on Phase 3 of its Baleine offshore development in Cote d’Ivoire, seeking to increase production from 60,000 b/d to 150,000 b/d.

– Japan’s INPEX (TYO:1605), the majority project owner of Australian liquefied gas Ichthys LNG, said it managed to avert industrial action planned for Wednesday, with wage negotiations continuing.  

Tuesday, May 26, 2026
 
In a compelling showcase of how unpredictable foreign policy has become under US President Trump, oil prices were sent 6% lower on Monday on the back of media speculation that a framework agreement is in place between the US and Iran. Hopes for an imminent deal were immediately quashed by US strikes on southern Iran, which the US Central Command called ‘defensive’, sending ICE Brent futures back to $100 per barrel.

Tit-for-Tat Strikes Sap Ceasefire Hopes. An explosion on a tanker caused an oil spill of bunker fuel in the Gulf of Oman today, as reported by the UK Maritime Trade Operations, with the incident reportedly happening 60 nautical miles east of Muscat, close to where the U.S. operates its naval blockade. 

Rubio Wants Hormuz Open Immediately. US Secretary of State Marco Rubio claimed that the US were prepared to enter into serious talks with Iran, saying that the ‘Strait of Hormuz has to be open one way or another’, making it a key US negotiation point along with a 60-day ceasefire extension.

Tehran Needs 30 Days to Open Hormuz. According to the preliminary agreement between the US and Iran, the Strait of Hormuz would reopen 30 days after an official diplomatic deal is reached, with Tehran committing to clearing all naval mines from the Strait to ensure freedom of navigation. 

Mining Accident Sends China Coal Soaring. A gas explosion at the Liashenyu coal mine in the northern province of Shaanxi, killing 82 people, has prompted widespread shutdowns and sent Chinese coking coal prices to their highest since 2024, jumping to ¥1,275 per tonne ($188/mt).

Ukraine Continues Russia Drone Strikes. Ukraine hit Russia’s largest Black Sea port of Novorossiysk and the nearby Grushovaya oil depot on May 23, sparking a fire in the industrial zone and prompting the port authorities to temporarily suspend oil loadings after averaging 450,000 b/d in 2026 to date.

Egypt Seeks to Clear Arrears by June. Having reduced its arrears to oil and gas companies to some $440 million from a peak of $6.1 billion, the government of Egypt has pledged to clear all debts owed to upstream investors by June 10 to boost the investment appeal of the North African nation. 

Qatar Won’t Be Back Until August. QatarEnergy has notified its European customers that it would cancel additional LNG cargoes, extending its force majeure from early July until mid-August, the loss of physical supply could be partly mitigated by volumes from its US-based Golden Pass LNG.

Saudi Aramco Relinquishes Key Malaysia Stake. Saudi state oil firm Saudi Aramco (TADAWUL:2222) has announced that it would transfer its 50% stake in the Pengerang Refining Company and its petrochemical plant to Malaysia’s state oil firm Petronas, ending its 8-year $7 billion venture there.

European Majors Give Up on German Wind. According to media reports, both France’s TotalEnergies (NYSE:TTE) and the UK’s BP (NYSE:BP) are exploring options to relinquish or sell 3 GW of offshore wind concessions in Germany, citing worsening economics and grid connection delays. 

Russia Casts a Shadow on Belgian Mining. Russian security services claim to have discovered several magnetic mines attached to the hull of the Arrhenius LPG carrier as it was arriving at the Baltic Sea port of Ust-Luga, presumably after a forced two-day anchorage off the port of Antwerpen. 

Iran Crisis Nods Bangladesh to Sweeten Terms. Seeking to reduce the impact of the Middle East conflict on its economy, Bangladesh launched an offshore bidding round, offering 26 hydrocarbon blocks and improving terms by extending exploration periods and lowering regulatory contributions.

Pakistan Eyes Strategic Petroleum Storage. Pakistan intends to boost domestic storage for crude oil and refined products after the US-Iran war exposed the country’s supply shortages, sharing the proposed framework with national oil firms Saudi Aramco, ADNOC, QatarEnergy and PetroChina.

Aluminium Keeps on Climbing Higher. The benchmark three-month LME aluminium contract has risen to $3,707 per metric tonne this week, the highest since March 2022, prompted by an earlier surge in Chinese futures contracts on the back of bauxite supply concerns from Guinea.

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