TAG Industrial Watch: June 27, 2026

 A week ago, President Trump and the leaders of Iran agreed to a 14-point memorandum of understanding, establishing a 60-day ceasefire to finalize peace talks. In response to the MOU and tough talk on inflation by the new chief of the Federal Reserve, Kevin Warsh, Wall Street speculators drove oil prices down to the lowest level since the start of the war at about $70/bbl. Unfortunately, pre-war oil prices no longer reflect reality.

Over the last four months, the world lost 1.15 billion barrels of oil supply (CNN). While the Strait of Hormuz is fully open, daily traffic of oil tankers in the first week of reopening is only a fraction of what it was prior to the war. According to the International Energy Agency, more than 80 energy facilities in the Middle East were damaged during the war, with about one-third of them classified as severely or very severely hit. In other words, it will take time to bring oil production and distribution back to pre-war levels. In the meantime, commercial tanks are dropping to operational stress levels as global oil reserves continue to deplete at an alarming rate. Here in the U.S., the government’s Strategic Petroleum Reserve dropped to the lowest level since 1983, down 48% since consumer prices began to spike in 2021 (EIA).

For the U.S., the biggest question may be if the nation’s historic transition to becoming a net exporter of crude oil will continue even as global oil supply recovers. The war’s economic toll on the world has created a strong incentive for nations to offload their dollar holdings for cheaper American oil, sell their U.S. Treasuries, and accumulate gold. If this trend continues and accelerates, America’s economy will run on less oil at higher prices. This may be unwelcoming news for most American consumers and businesses, but it creates a big opportunity for industrial investors that target oil-related properties.

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