Global Fuel Shortage, Iran War Strain Could Reshape Bakken's Trade Routes

The ongoing war with Iran and a pressing global shortage of distillate fuels are creating pressures that could fundamentally reorganize international trade, with direct implications for Bakken crude oil exports, according to industry analyses published Wednesday. The conflict has made supplying U.S. troops difficult and arrives as the world economy was already reaching resource limits, with distillate fuel oil—diesel and jet fuel—being the most critical constraint.

This fuel shortage is forcing a strategic re-evaluation of long-haul transportation. An article from OilPrice.com suggests the upcoming meeting between U.S. President Trump and China's President Xi in Beijing on May 14-15 presents an opportunity to reorganize global trade into shorter routes to conserve fuel. The proposal envisions splitting most world trade into two major spheres centered on the U.S. and China, drastically reducing fuel used for maritime and air transport.

For North Dakota's oil industry, such a shift toward regionalized trade could significantly alter crude oil export patterns. The Bakken formation, a prolific producer of light sweet crude, has increasingly relied on global markets. A move to shorten supply chains and prioritize fuel for agriculture and industry may affect the long-distance seaborne exports that have underpinned Bakken crude pricing and producer economics.

J.P. Hanson, Managing Director and Global Head of the Oil & Gas Group at Houlihan Lokey, stated that the Iran conflict has "fundamentally altered the global energy landscape," according to Rigzone. This altered landscape, combined with the distillate shortage, underscores the heightened geopolitical risks facing energy exporters.

Further compounding global supply concerns, Russia expects its oil production to remain flat in 2026 due to intense Ukrainian drone attacks on its energy infrastructure, Rigzone reported. This lack of growth from a major producer could provide underlying price support for international benchmarks, indirectly benefiting Bakken crude, but may be offset by potential reductions in global trade volume.

The OilPrice.com analysis, citing Dr. Mohammed Marandi, a professor at the University of Tehran, posits that China may mediate a settlement in the Iran War. A ceasefire brokered during the Trump-Xi summit could reduce the immediate risk premium in oil markets but also accelerate a strategic pivot toward the proposed regional trade blocs. For Bakken operators and royalty owners, the dual forces of conflict-driven disruption and a structural push for fuel-efficient trade present a complex outlook for the mid-term, balancing potential price volatility against possible constraints on export destinations.