Global Tensions, Gasoline Drawdown Signal Tightening Oil Market

The stalemate in the U.S./Israel-Iran war could be setting the stage for the next oil supercycle, according to an analysis from OilPrice.com. With a firm peace deal appearing less likely, the effective closure of the critical Strait of Hormuz transit route may persist, according to the source. OilPrice.com reported that both Washington, under President Donald Trump, and Tehran, under the Islamic Revolutionary Guards Corps (IRGC), may have compelling reasons to keep the conflict simmering, which would maintain a geopolitical risk premium over global oil prices.

Meanwhile, U.S. gasoline inventories are falling at a record pace ahead of the summer driving season, according to a separate OilPrice.com report. For the week ending May 22, inventories stood at 211.6 million barrels, the lowest May reading since 2014. More critically, stocks fell by 47.5 million barrels between early February and late May, a drawdown larger than any similar period in weekly EIA data going back to 1990, according to the report. This occurred despite strong refinery utilization rates of 94.5% and only modest year-on-year demand growth, suggesting global markets are pulling on U.S. supplies.

Domestically, the Railroad Commission of Texas revealed its latest preliminary crude oil and natural gas production figures for March 2026, according to Rigzone. The Texas data provides a key benchmark for comparing output trends against Bakken production, which will be reported by the North Dakota Department of Mineral Resources later this month.

For Bakken operators, the confluence of sustained Middle East tensions and a rapidly tightening U.S. gasoline market underscores the fragile balance of global supply and demand. The record drawdown in gasoline stocks, even with refineries running hard, points to a stronger-than-expected pull on domestic barrels. This supportive fundamental backdrop, combined with the ongoing risk of supply disruption from the Iran conflict, creates a potentially favorable price environment for North Dakota crude.