Energy & Transport February 12, 2026

Market Overview

Global Energy & Transport markets are trading with elevated geopolitical risk and selective operational tightness. Oil prices and speculative longs have been buoyed by renewed Iran-related tensions and supply concerns, while U.S. LNG remains commercially attractive on transatlantic routes. Meanwhile, aviation and maritime fuel logistics face policy and safety frictions that increase short-term supply-service risk across transport sectors.

Key Developments

1) Geopolitical maritime risk: The U.S. advisory urging ships to stay “as far as possible” from Iranian waters in the Strait of Hormuz increases routing and insurance risk for tankers and other commercial shipping operating through a pivotal chokepoint [4]. Related Iran tensions have already pushed hedge funds to raise bullish oil positions, increasing market sensitivity to supply shocks [20].

2) Aviation fuel logistics: Cuba’s decision to bar international airlines from refueling there tightens refueling flexibility in the Caribbean and Latin America, potentially increasing uplift costs, repositioning legs, and reducing operational resilience for carriers and fuel suppliers servicing the region [6].

3) Physical supply and infrastructure shocks: Ukrainian strikes on Russian refineries inflicted heavy damage and large economic losses last year, demonstrating the vulnerability of refinery capacity to conflict and the knock-on effects on regional fuel availability [22]. At the same time, Tengiz’s ramp back to ~550,000 bpd after a fire shows how single-field incidents can materially shift flows and market balances in large producing basins [24].

4) Energy investment flows & company fundamentals: Investor money has rotated back into integrated oil majors and Big Oil equities, reflecting a defensive tilt and commodity exposure among investors [12]. Shell’s reserves declining to the lowest levels since 2013 highlights medium-term production risk absent new exploration or M&A [16]. Offshore services consolidation continues — Transocean’s planned $5.8bn acquisition of Valaris signals sector consolidation in drilling services and could reshape offshore cost structure and contractor scale [18].

5) Gas & clean-tech policy signals: U.S. LNG margins remain positive on Europe-directed cargos (average reported margins of ~$4.56/MMBtu, roughly $17.5m per vessel on certain routes), keeping export economics favorable despite oversupply narratives [17]. Conversely, Denmark’s carbon capture tender underperformance exposes policy and execution risks in scaling CCS, tempering near-term expectations for modular carbon infrastructure [14].

Financial Impact

- Prices and positioning: Hedge funds increasing net-long Brent (tens of thousands of contracts) amplify price sensitivity to upside shocks, tightening forward curves and supporting spot premiums in risk-on/skewed scenarios [20]. - Transport operators: Shipping and airline operators face higher operating costs from rerouting, longer voyages, or lost refueling options (Cuba), which compresses margins or forces fare/freight adjustments on certain lanes [6][4]. Insurance and freight premiums may rise if Strait of Hormuz navigational cautions persist [4]. - Producers & services: Shell’s reserve decline raises questions on longer-term production profiles and the need for capital allocation to exploration or M&A [16]. Offshore services consolidation (Transocean/Valaris) could lift dayrates and margins for remaining contractors if it reduces excess capacity [18]. - Refineries & fuels: Damage to refinery capacity (Ukraine/Russia) can tighten refined product availability regionally, lifting diesel and jet fuel spreads — a dynamic underscored by broader concerns about diesel supply resilience amid deglobalization trends [22][15].

Market Outlook

Near term (weeks–months): Elevated geopolitical risk keeps oil and marine fuel markets susceptible to price jumps; U.S. LNG exports retain attractive margins to Europe but can face logistical constraints if shipping risk grows [17][4]. Aviation refueling friction (Cuba) and rail disruptions (reported sabotage incidents) add transport-specific operational risk that can lead to localized price dislocations and higher freight/insurance costs [6][29].

Medium term (6–24 months): Structural questions persist — declining reserve profiles at major producers and modest CCS progress suggest supply-side reinvestment will be needed or prices must incentivize new capacity [16][14]. Traders and allocators rotating back to Big Oil reflect a view that hydrocarbons will remain central near term even as long-term demand trajectory shifts (Vitol pushing peak demand to mid-2030s) — this supports capex for production but also raises policy and transition risk premium considerations [26].

For portfolio managers: prioritize exposure to cash-generative LNG exporters and integrated oil majors with clear reserve replacement strategies, underweight assets highly exposed to chokepoint transit without diversification, and monitor offshore services consolidation and refinery outage news flow for tactical trading opportunities [17][18][24][22].