Global Tensions, Energy Shifts Pose Risks and Opportunities for Bakken

Renewed military conflict in the Strait of Hormuz and a push for geothermal energy in European coal towns are shaping the global energy landscape, with implications for Bakken crude oil exports and long-term market demand.

U.S. President Donald Trump has scrapped a plan to charge a 20% fee on cargo shipped through the Strait of Hormuz, according to OilPrice.com. Instead, he announced proposed trade and investment agreements with Persian Gulf states while maintaining a U.S. naval blockade on Iranian shipping. The policy shift came as U.S. forces struck targets across southern Iran on July 14, with explosions reported near the key port of Bandar Abbas. U.S. Central Command reinstated a blockade on vessels transiting to or from Iranian ports effective 4 p.m. Eastern Time on July 14. The strait handles about one-fifth of the world's energy transit during peacetime, and renewed disruption risks global price volatility that can impact the breakeven calculus for Bakken producers.

In Europe, Germany's energy transition could signal longer-term demand shifts. The country has a legally binding pledge to phase out coal by 2038, but market forces and high carbon prices under the EU's Emissions Trading System may see it phased out by 2032, according to an expert cited by OilPrice.com. Germany aims for a 100% renewable energy mix by 2035. To meet this, the country is looking to geothermal energy as a round-the-clock clean power source, with former coal towns seen as potential development sites. A successful transition in major economies away from fossil fuels poses a strategic challenge for all oil-producing regions, including the Bakken.

Elsewhere, new trade routes are emerging that could alter long-term logistics. Azerbaijan is accelerating efforts to build the "Middle Corridor," signing transport and trade agreements with Turkmenistan, Uzbekistan, and Kazakhstan in June and July 2026, OilPrice.com reported. Uzbekistan and Azerbaijan plan a joint Caspian cargo fleet and a Baku logistics hub to speed Central Asian exports to Europe. While focused on goods and potentially renewable electricity, the development of alternative Eurasian trade corridors reflects a broader global trend of supply chain diversification, which can influence crude oil flow patterns and infrastructure investment.

For Bakken operators, the immediate focus is on the risk of supply disruption in the Middle East, which has historically provided a price floor for U.S. shale output. The deepening U.S.-Iran conflict underscores the fragility of global maritime chokepoints. Concurrently, Europe's accelerated pivot to geothermal and other renewables highlights the persistent pressure on fossil fuel demand in key export markets, even amid near-term energy security concerns.