The IRGC and Iran’s hawks are leading Iran to the precipice as they continue to taunt President Trump and the US military. Daily attacks by both sides and the killing of American servicemen has caused the President of the United States to have his military send in more fighter aircraft and dozens of refueling planes, providing him with the option to expand the war if he chooses. Iran on the other hand sees themselves having a winning hand with the Strait of Hormuz closed and like in Vietnam and the North Vietnamese, the longer they stay in the game and the longer they persist in taunting America; they see this as a winning hand. The problem is, infrastructure on both sides of the Persian Gulf is being destroyed. Bridges, roads, civilian airports, power facilities, and water desalination plants are making the quality of life for people on both sides of the Persian Gulf extremely harsh. At some point either the moderates in Iran regain the initiative and talks resume or the war could escalate and bring in additional fighting and expanded targets. Iran now has a long range drone, the Shahed 136, which has a range of 1500 miles and carries a bigger payload. So American attacks on the western side of Iran would not impact these drones which could reach the western side of the Gulf from eastern Iran. They have the range to hit American naval forces in the Arabian Sea. Does President Trump expand the war by sending American troops to take Karg Island? Does Iran ask the Houthis to start attacking Saudi Arabia as well as shipping in the Red Sea? Do they end up closing both key Straits which would mean oil would not be able to get to Asia? Will Iran and its proxies restart fighting with Israel? All of this means that the next week or two are very critical to come back from the precipice of all out war or to renewed peace talks. We hope for the latter but the noise right now is by the ‘Hawks’ on both sides.
WTI crude oil rose from US$67.00/b on July 2nd to US$87.29/b today (intraday high US$88.61/b). If rational behavior and proportional attacks continue then the crude trading range may be between US$75/b and $94/b in the near term. If the war expands to US invasion and capture of Kharg Island, then prices could rapidly exceed the recent high and move up to new 2026 price highs. On the other hand if peace negotiations recommence and show substantive early progress, then WTI would fall below the July 2nd low and reach our downside target of US$64 - US$66/b. The coming two weeks should indicate if the ‘Iranian moderates’ have retaken control of the negotiations and the IRGC restrained. President Trump is providing cover for the ‘Iranian moderates’ by re-initiating a blockade of the country - harming its economy, and attacking IRGC targets. Water and the lack thereof throughout the region could be the reason for pragmatism to return.
Our forecast has been for an average price in 2026 of US$80/b for WTI, rising in 2027 as demand growth picks up and SPR’s are rebuilt to average US$90/b. If the warmongers keep control of the war, then our forecast for 2026 is too low. We were close to getting new BUY signals triggered in early July, but this latest twist means patience is required for a bit longer. We will send out an SER Action Alert to SER subscribers when the BUY signals are triggered. We plan to add new energy ideas to consider and highlight the plethora of bargains that are available. If interested in our BUY recommendations, please become an SER subscriber.
Catch the Energy Conference:
Registration is Now Open - Join Industry Leaders at the Catch the Energy Conference!
Tickets are now on sale for the public. Become a subscriber and get two free tickets to the conference. Use coupon code CTE26 at checkout to receive $100 off the first year of an annual subscription, along with the two complimentary conference tickets. Public tickets are currently available at the early bird price of $119 each until September 18th, after which they will increase to $179 each.
To find out more go to www.catchtheenergyconference.com. We did sell out last year so if you would like to attend, please get your tickets as soon as possible.
As usual SER subscribers will receive two complimentary tickets to the event. We look forward to seeing you there!
We are working away on getting our Presenters for this year’s conference. Below are those already signed up with confirmation forms in. We have met with other companies and will update this list as their confirmations come in. We have room for 45 companies. A ‘Wait List’ has been set up as we usually get a few takeovers each year providing presentation slots to those on that list. Please put the event in your calendar for October 17, 2026 if you can come to Calgary. This year’s event will be our biggest and best yet and the program will have some new and exciting features. If you are an institutional investor and plan to attend please let us know as we may be able to provide access to management teams on Friday, October 16th at the Calgary Petroleum Club.
Thank you to our Sponsors, Exhibitors and Presenters. It is going to be a great lineup and largest attendance this year!
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