02 Jun 2026
US energy market commentary, May
Rob Palmer
Head of Energy Futures Clearing Sales, North America
Sasha Foss
Energy Markets Analyst, CSC Commodities
Oil prices retreat as hopes of Iran-US deal remain
Brent futures, the international benchmark for crude oil, have reversed course since late April, highlighting how quickly sentiment can shift in response to geopolitical developments. Prices fell from a four-year high of $126.41/b on April 30 to close at $92.05/b on May 29. The sharp decline follows press reports of a potential 60-day memorandum of understanding (MoU) between the US and Iran aimed at easing tensions.
The proposed agreement would extend the ceasefire, initiate nuclear talks and allow the reopening of the Strait of Hormuz. As part of the deal, Iran would remove all mines within 30 days.
However, US President Donald Trump has not yet agreed to the document, and oil markets appear to be running ahead of confirmation, with discussions ongoing for the past three weeks. Meanwhile, the US imposed additional sanctions on May 28, targeting six companies involved in Iranian oil sales to China, as well as the Persian Gulf Strait Authority, established by Iran to impose tolls on vessels transiting the Strait of Hormuz.
US weekly data showed that commercial crude inventories fell by 3.3 million barrels to 441.7 million barrels in the week ending 22 May, according to US Energy Information Administration (EIA) data published on 28 May. In addition, a further 9.06 million barrels were released from the Strategic Petroleum Reserve.
In refined products, US gasoline inventories declined for the 15th consecutive week, falling by 2.57 million barrels. Stocks are now 5.6% below the five-year average as the US enters the summer driving season following Memorial Day. US distillate inventories also fell, declining by 2.11 million barrels to 100.8 million barrels, the lowest level in 23 years.
Russian oil sanctions relaxed
The US extended its 30-day waiver on Russian oil sales as the administration seeks to contain global oil prices amid the fallout from the conflict with Iran. Treasury Secretary Scott Bessent stated that the move is intended “to provide the most vulnerable nations with the ability to temporarily access Russian oil.” The UK has also relaxed restrictions on imports of diesel and jet fuel refined from Russian crude in third countries.
However, Russian energy infrastructure continues to face disruption. Ukrainian drone attacks have increasingly targeted key export and refining assets, constraining Russia’s ability to maintain supply flows. Strategic Black Sea ports and refineries, including Novorossiysk and Tuapse, have been hit in recent weeks, alongside facilities in Volgograd and Temryuk.
NextEra Energy signs deal with Dominion to create power behemoth
NextEra Energy, one of the largest US renewable energy producers and utility operators, and Dominion Energy, a major regulated utility serving customers across the eastern United States, have agreed to combine in a deal that will create a $420 billion energy group. The transaction reflects growing demand for power driven by the rapid expansion of AI data centres and broader electrification trends.
The combined group will serve more than 10 million homes and businesses across the US Atlantic Coast, including Florida, Virginia and the Carolinas. Growth in AI infrastructure is increasingly concentrated in “Data Center Alley” in Virginia, a region that handles a significant share of global internet traffic. Against this backdrop, scale is becoming a clear priority for utilities positioning for structurally higher electricity demand.
The deal remains subject to regulatory approval, which is expected to take between 12 and 18 months.
