Global Oil Prices Surge as Hormuz Crisis Deepens, Shell-INEOS Expand GoM

The ongoing military crisis in the Strait of Hormuz is sending long-term oil price expectations soaring, with December 2026 futures contracts trading well above initial forecasts, according to an OilPrice.com report. The December 2026 contract for Brent crude traded at $91 per barrel, while WTI traded at $85, both far above the market's initial $55-60 per barrel expectations for that period.

The report states some 11 million barrels per day of production is currently shut in across the Middle East, with producers reaching storage limits. Analysts warn that even if blockades end, countries like Iraq may need at least nine months to return to pre-war capacity due to reservoir constraints. Chevron CEO Mike Wirth stated that oil supply shortages would soon start appearing globally as strategic reserves are depleted.

On Tuesday, May 5, Brent crude slid back to $110 per barrel after U.S. forces moved against Iran's chokehold on the Strait, with the U.S. signaling a ceasefire remained in effect. However, physical shortages are expected to trigger further price spikes toward $120 per barrel later in the week.

In a separate development highlighting strategic shifts in oil and gas investment, Shell and INEOS Energy have agreed to jointly invest in exploration and development opportunities in the U.S. Gulf of Mexico. According to a second OilPrice.com report, INEOS is buying a 21% working interest in assets within tieback distance to the Shell-operated Appomattox production hub.

The partnership will initially focus on Shell's pre-FID Fort Sumter discovery, the drilling of the Sisco exploration well, and a further exploration well targeted by the end of 2030. INEOS Energy CEO David Bucknall said the focus is on "areas close to existing infrastructure where we can move quickly, control costs and unlock new production."

INEOS has been shifting investments to the U.S. sector, citing a punitive tax regime in the UK. This deal follows its late-2024 acquisition of CNOOC's Gulf of Mexico business.

For Bakken operators, the sustained upward pressure on long-dated oil prices provides a stronger price deck for future drilling plans and hedging activities. The focus by majors like Shell on cost-controlled, infrastructure-led projects in the Gulf mirrors the development model prevalent in the mature Bakken, where incremental drilling and completions near existing pads and pipelines are key to maintaining output.