Hormuz Closure Disrupts Global Flow, ND Impact Still Unclear
Strait of Hormuz traffic halted after Iranian seizures, while North Dakota production data lags behind volatile wartime price swings.
Traffic through the Strait of Hormuz ground to a halt on Thursday, April 23, after Iranian forces fired on commercial ships and seized at least two vessels, according to Rigzone. This marks a new stage in Tehran's efforts to control the vital waterway, with only one ship, the bulk carrier LB Energy, seen moving through early Thursday.
The closure has choked off millions of barrels of supply since late February, forcing global refiners to adapt. Europe's biggest oil refinery, Shell Plc's Pernis plant in Rotterdam, is running on "max jet mode" to produce jet fuel as concerns mount over shortages, Rigzone reported. The plant is looking for alternative crude sources after the Strait's closure cut off Middle East supply.
For North Dakota operators and state budget planners, the full impact of the U.S. and Israel's war with Iran remains unclear due to data lag, according to a state briefing covered by Bing News. The most recent production data from the North Dakota Department of Mineral Resources covers February, before the war began on February 28. Director Nathan Anderson described subsequent pricing with the word "volatility."
In February, North Dakota wells produced 31.6 million barrels of oil, or 1.129 million barrels per day, putting the state 1.76% below its revenue forecast for the month. The state budget was built on $59 per barrel, while February's price was $57.54, creating a 2.1% revenue shortfall. Anderson noted that the next month's data "should increase substantially" due to wartime price swings.
The number of drilling rigs in the state is not expected to change much in 2026, as operators finalized their budgets before the conflict, Anderson said. One operator has indicated adding a rig in July, and another is considering it, while others maintain flat rig profiles.
Justin Kringstad, director of the North Dakota Pipeline Authority, cited U.S. Energy Information Administration predictions for a drop in oil prices once global dynamics stabilize, potentially below $80 per barrel by 2027.
Source
Rigzone, Bing News
