Alexandre Araman

Research Director at Wood Mackenzie | Energy markets analyst | Geoscience geek | Reading rocks and price curves | Views my own

[Alexandre Araman @TheBarrelMind]

The strongest case for low-carbon hydrogen in 2026 is no longer climate. It is energy security.

[Wood Mackenzie @WoodMackenzie]

The biggest argument for low carbon hydrogen in 2026 may not be climate. It may be energy security.

Before the Iran war, roughly 20% of global LNG, 25% of internationally traded ammonia and 37% of urea exports moved through the Strait of Hormuz. The disruption that followed has forced governments and industry to rethink the risks of relying on concentrated hydrocarbon supply chains.
That shift is changing the conversation around hydrogen.

In this week's Energy Pulse, @Ed Crooks explores how concerns about energy security are reviving interest in low carbon hydrogen and ammonia, despite ongoing challenges around cost and scalability.

Key insights:

- Higher gas prices have improved the competitiveness of some low carbon ammonia projects
- China now holds more than half of global green hydrogen capacity that has reached final investment decision
- Europe, India and the US continue to back hydrogen development, but for different strategic reasons
- Diversifying energy supply chains is becoming as important as reducing emissions
- Government support is likely to remain essential for at least the next 15 to 20 years

As @Murray Douglas, @Wood Mackenzie's Head of Hydrogen Research, notes: "For the next 15 to 20 years, at least, low carbon hydrogen is likely to continue to rely on government support."

Read more: https://t.co/lqxKzTHaK3

Has energy security become a stronger driver of hydrogen investment than decarbonisation?

[Alexandre Araman @TheBarrelMind]

🇷🇺 The Arc7 LNG carrier Christophe de Margerie (named after Total’s former CEO, who died in an air crash in Moscow in October 2014) is making a rare early-season eastbound transit along the Northern Sea Route under escort from a Russian nuclear icebreaker.

Sentinel-1 satellite imagery shows the vessel navigating heavy ice in the East Siberian Sea on 3 June.

AIS and vessel tracking data indicate it crossed the Bering Strait on 8 June.

The destination remains uncertain, with options including discharge at the Koryak floating storage unit off Kamchatka or a continued voyage onward to China.

The voyage reinforces the strategic role of the Northern Sea Route in rerouting sanctioned LNG flows toward Asian markets.

[Alexandre Araman @TheBarrelMind]

Middle East tensions escalated over the weekend:

• 🇮🇷🇮🇱🇱🇧Iran launched missiles at northern Israel in response to Israeli strikes on Hezbollah-linked targets in Beirut.

• 🇮🇱🇮🇷Israel retaliated with strikes on Iranian military sites and the Mahshahr petrochemical complex.

• 🇮🇷🇮🇱Iran then targeted petrochemical facilities in Haifa. The IRGC claimed responsibility and warned that any further attacks on Iranian energy infrastructure could trigger broader strikes on energy assets across the region.

• 🇺🇸President Trump has urged restraint (!) and is reportedly pressing both sides to avoid a broader conflict.

• 🇾🇪🇮🇱The Houthis announced a blockade of Israeli shipping through the Red Sea and Bab al-Mandab in support of Iran and Hezbollah.

[Alexandre Araman @TheBarrelMind]

LNG markets are caught between short-term tightness and long-term abundance.

In the near term, uncertainty surrounding the Gulf crisis, project delays and limited supply availability could keep prices elevated heading into the winters of 2026 and 2027.

Beyond that, the market is set to undergo a profound shift. Almost 250 mmtpa of new LNG capacity is expected to come online over the next five years, ushering in an era where affordability, competitive positioning and demand growth take centre stage.

[Wood Mackenzie @WoodMackenzie]

LNG markets are navigating two very different realities at once.
In the near term, uncertainty surrounding the Gulf crisis, project delays and tight supply conditions could keep upward pressure on prices as winter 2026 and 2027 approaches.

Yet over the longer term, almost 250 Mtpa of new LNG capacity is expected to come online over the next five years, creating a very different market environment focused on affordability, competition and demand growth.

At Wood Mackenzie's Gas and LNG Conference in London this week, industry leaders explored the forces reshaping global gas markets, from China's evolving role as a market balancer and the growing importance of supply diversification, to rising demand from data centres and the next phase of LNG trading.

Here are 10 key takeaways from the discussions shaping the future of LNG.

Read more: https://t.co/boBslgX3I6

[Alexandre Araman @TheBarrelMind]

Delfin has approved the construction of its first FLNG, which will be stationed offshore Louisiana in the Gulf Coast. The $5 billion project, named Delfin FLNG 1, will be built by Samsung Heavy Industries.

The momentum continues for US LNG. Delfin FLNG 1 is the third US LNG FID of 2026, joining Venture Global's CP2 LNG Phase 2 and Caturus' Commonwealth LNG. Upon delivery, it will become the first floating liquefaction facility in the United States and the largest FLNG project globally.

Our clients have access to the full analysis 👉https://t.co/RSmU2ATZ6u

[Alexandre Araman @TheBarrelMind]

Upstream M&A activity remained resilient in May. With 19 transactions announced globally, deal flow remained above recent averages for the second consecutive month. As in April, spend was heavily concentrated in North American gas. This month, natural gas activity shifted back to the US, following Shell's acquisition of Montney-focused ARC Resources in April.

[Alexandre Araman @TheBarrelMind]

A hotter summer under El Niño could further underpin regional LNG spot demand.

Spot tendering has been dominated by South and Southeast Asian buyers, as India and Thailand enter peak seasonal heat. Chinese and Japanese buyers have also re-entered the spot market.

In Europe, LNG imports continued to decline year-on-year in May. Underground gas storage stands at around 39%, approximately 8% below last year, as forward price backwardation has dampened storage injection incentives.

[Alexandre Araman @TheBarrelMind]

The LNG market remains tight, but signs of incremental supply recovery are beginning to emerge.

Global LNG utilisation fell to 65% as Gulf supply disruptions coincided with seasonal maintenance in the US and Australia.

A few notable developments beneath the headline:

· Peru LNG and Darwin LNG have resumed operations, providing some relief.

· Heat signatures at three Qatari RasGas trains suggest a gradual return to hot standby.

· African LNG remains resilient, led by strong Nigerian performance.

· Russia's Arctic LNG 2 is gaining momentum as additional vessels arrive and the Northern Sea Route opens earlier than usual.

· First heat signals detected at Mexico's Costa Azul LNG pre-treatment facility point to commissioning progress.

[Alexandre Araman @TheBarrelMind]

The US military blockade is actively constraining oil exports from Iran’s Kharg Island terminal and the upstream sector is beginning to feel the squeeze.

[Wood Mackenzie @WoodMackenzie]

The U.S. blockade is officially choking off Iranian oil.🛢️

As the Middle East conflict approaches the 100-day mark, the U.S. military blockade outside the Strait of Hormuz is actively constraining oil exports from Iran’s Kharg Island terminal - and the upstream sector is beginning to feel the squeeze.

The immediate fallout:
���Crude loadings plummeted by over 60% in May.
🔷Monthly oil production fell 10.5% month-on-month.
🔷More than 600 kb/d offline as of June 1.

With upstream impacts accelerating, tracking these shifts in real-time is critical for navigating the volatile market. Follow the latest production trends with Wood Mackenzie’s High Frequency Oil Production Monitor here: https://t.co/FUP12LDamw

(Production estimates include both crude and condensate)

#MiddleEast #Crude #Production

[Alexandre Araman @TheBarrelMind]

While attention is fixed on on Hormuz and the outcome of US-Iran negotiations, Egypt is strengthening its position as the Eastern Mediterranean's gas processing and export hub.

• Eni's South Bostan discovery (~300 bcf) is a standout result in the mature Western Desert, where the median discovery over the past decade has been only ~10 bcf. The find should become a key source of feedgas for Eni's new processing infrastructure in the area.

• ExxonMobil and QatarEnergy have signed an MoU with Egypt to evaluate commercialisation options for ~4 tcf of gas from Cyprus Block 10. The most likely route is through Egypt's existing pipeline and LNG infrastructure, potentially breathing new life into the underutilised ELNG terminal.

[Alexandre Araman @TheBarrelMind]

Saudi Arabia and Iraq are gradually restoring oil production, according to Wood Mackenzie's High Frequency Oil Production Monitor (HFOPM) data, but both remain well below pre-conflict levels.

Saudi output has increased by ~1 million b/d since 18 May, led by Ghawar and Khurais returning to pre-war rates. Abu Hadriyah, Fadhili, Khursaniyah, and Manifa fields have also ramped up production. Yet roughly 3 million b/d remains offline, with major offshore fields including Marjan, Zuluf and Berri still completely shut in.

The recovery is being enabled by the East-West Pipeline to Yanbu on the Red Sea, though export capacity remains constrained as the terminal is operating near its limits. Much of the additional crude is likely being absorbed by seasonal crude burn and recovering refinery runs.

Iraq has also raised output to 1.5–1.6 million b/d as West Qurna 1, Majnoon and Fauqi gradually restart. The priority is less about exports and more about securing associated gas, refinery feedstock and LPG supplies ahead of a potentially severe summer power shortage.

[Alexandre Araman @TheBarrelMind]

Iran's oil production has fallen 800,000 b/d since the US blockade began on 13 April. This decline reflects the exhaustion of Iran's storage buffer.

With onshore storage actually at 69 million barrels and critical hubs nearing 80% utilisation, that buffer is now largely exhausted. Iran is being forced to curtail output as export constraints bite.

This helps explain the growing speculation around Iran-US ceasefire talks. A diplomatic breakthrough could quickly ease storage pressure, but a lasting recovery in production and exports will require more than a temporary agreement.

[Alexandre Araman @TheBarrelMind]

Even under favourable conditions, restoring Gulf liquids exports to pre-conflict levels is likely to take months rather than weeks. The recovery process will be unprecedented in scale and is unlikely to proceed without setbacks.

While the precise impact is difficult to quantify, many of the technical and operational challenges outlined above become more severe with time. More wells across a larger number of fields would require intervention before returning to full production, increasing costs and extending recovery timelines.

The return of oil to the market will also depend on overcoming a series of logistical and operational hurdles.

The first priority is restoring confidence that marine traffic can transit the Strait safely and without restrictions in either direction. Shipowners, charterers and insurers are unlikely to accept anything less. Once the waterway reopens, vessels currently stranded inside the Gulf will need to resume their journeys to market.

Attention will then shift to re-establishing normal tanker logistics. Empty vessels waiting outside the Gulf must enter the region, load cargoes and depart, creating the storage capacity and tanker availability required for upstream production to restart. Rebooting these traffic flows will take time, particularly as tankers loaded after reopening will not return for several weeks.

Concurrently, operators will need to restore the wider oil value chain, including producing wells, pipeline networks, storage facilities, refineries, petrochemical plants and export terminals.

Saudi Arabia and the UAE possess important advantages, including spare production capacity and significant storage inventories, which could help smooth export flows and offset disruptions should the recovery of individual fields or facilities prove slower than expected.

[Alexandre Araman @TheBarrelMind]

The upstream recovery path of the proudction addected gy the Middle East conlfuct will depend on a wide range of subsurface variables. These include the age, maturity and size of the field; the proportion of production shut in; the duration of the shut-in period; and whether the shutdown process, in some cases executed rapidly and under duress, was properly managed. Reservoir characteristics such as quality, pressure and drive mechanisms, alongside the technologies deployed and water salinity, will also play a critical role.

Above-ground challenges add another layer of complexity. Gas handling and water reinjection systems must be restarted in parallel to avoid reservoir damage. Many fields are also likely to experience a temporary increase in water cut. Successfully restarting and re-optimising these systems represents a significant operational risk.

The pace and quality of the recovery will also depend on effective coordination across the supply chain. Potential constraints include mobilising personnel to the right locations, resolving mechanical issues with artificial lift systems, restoring remote power generation, and addressing pipeline integrity and flow assurance challenges. Some of the oldest, most complex or most heavily impacted wells may never fully recover.

[Alexandre Araman @TheBarrelMind]

The now twice extended ceasefire between the US and Iran and ongoing talks towards peace give hope that the war ends soon. If a sustainable agreement is finally reached – and it’s still a big if – it could lead swiftly to the reopening of the Strait of Hormuz, kick-starting the process of returning shut in oil supply to the global market which peaked in May at around 12 million b/d.

If the Strait reopens in the next few weeks, much of the shut-in supply could be restored fairly quickly. Wood Mackenzie data indicates that Saudi Arabia and Iraq have been pre-emptively increasing supply in the last few days. In most instances, the main bottleneck will be the logistics of resuming export flows and safely managing field start-ups rather than subsurface deliverability.

Assuming operators choose a measured and controlled ramp-up, our analysis suggests the fields affected by the Strait’s closure could get back to 70% of prior production within three months and to 90% within six months. The last 1 million b/d or so will take considerably longer.

[Alexandre Araman @TheBarrelMind]

🇨🇳China’s economy is showing remarkable resilience despite the Hormuz disruption, but the pressure is building underneath.

GDP still grew 5% in Q1 2026 , supported by strategic crude reserves, coal switching and fuel subsidies. China can likely avoid immediate rationing for months even with Middle East imports disrupted.

But cracks are emerging:
• Petrochemical plants are already cutting runs due to LPG, naphtha and methanol shortages
• Inflation is rising, limiting Beijing’s ability to stimulate the economy
• Chinese exports to the Middle East fell 42% y/y in March

One of the biggest winners so far: EV exports. Chinese EV exports surged 77.5% yoy in Q1 as high global fuel prices accelerated demand.

China still has buffers. But the longer Hormuz remains disrupted, the more the crisis shifts from a logistics problem into a macroeconomic one.

https://t.co/zjlF8ClTHu