Market Monitor

With our Market Monitor series, Energy Advisors Group leverages 35+ years of deal and industry experience to bring you the critical energy trends along with actionable intelligence and analysis.

Market Thoughts:

1. Independent trading houses took meaningful hit in opening stage of Iran War.
2. Vitol is most vivid case study with 10 tankers blocked with two destroyed.
3. Raised ~$3B to steady the firm to manage margin and opportunities.
4. On the contrary, trading arms of BP, Shell and Total expect strong profits.
5. Stage set for structurally higher basis volatility rather than clean reversion to pre-war patterns.

Here is a recap of five sections in the report:

Trading On Chaos

1. Vitol, Trafrigura, Mercuria, Gunvor take hit in early phase of Iran War.
2. Cargoes blocked, vessels destroyed, margins pressured.
3. "For an industry that specializes in monetizing other's pain, it has been an uncomfortable role reversal."

Uncertain Markets

1. Compromised Strait of Hormuz creates labyrinth of risks.
2. Once repriced and understood, opportunities for rich pickings.
3. Physical traders thrive when price curves distort and regional spreads blow out.
4. Trader's winners marry strong balance sheets, real-world logistics, and conservative risk management.

War Impacts on 1Q26 U.S. Upstream M&A Markets

1. Year started strong with $37.5B pre-war, then stalled to just $38.0B at quarter end.
2. Expect markets to rebound as oil prices settle down.
3. Global oil demand still growing mid-term and U.S. gas demand accelerating.
4. Expect more international buyers in U.S. markets and a return to E&P consolidation.

Upstream Winners

1. Super Majors with access to Gulf to America ports and Trading Arms (Exxon & Chevron as examples)
2. Large Permian Pure-Plays that have firm transport of Midland barrels to Gulf Coast ports.
3. Gas-levered names tied to Gulf Coast LNG corridors.
4. Meanwhile, Kimmeridge's new $6B bid aims to bypass battle. Will allow investors to tag along for 49%.

A New World Order

1. Attack on Qatar LNG facility re-framed LNG risk, with U.S. Gulf Coast now carrying an embedded premium.
2. U.S. just became first country to export >100 million metric tons in a year (2025).
3. With backend oil price curves lagging the front, incremental U.S. supplies will be "measured".
4. Safe haven of U.S. may present new base case for U.S. energy valuation.

Below are 3 excerpts from the Monitor.

Page 1 "Trading on Chaos", "Uncertain Markets" -----

Page 2 "Includes Upstream Winners"? -----

Page 3 "A New World Order", "War Impacts on 1Q26 M&A" -----

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