Industry

Oil prices fall on announcement of peace agreement

Oil prices have fallen to just over US80/bbl, their lowest level since April, and stocks risen following President Donald Trump’s announcement that Washington and Iran have reached an agreement to end the war

A formal signing of the agreement is due to take place on Friday 19 June in Switzerland.

While the text of the agreement has not yet been released and the details are still unclear, Trump said that hostilities have ceased, the Strait of Hormuz will fully open on 19 June toll-free, and the US blockade will be lifted, although how the Strait will be controlled is not clear.

“Ships of the World, start your engines. Let the oil flow!” Trump said on his social media account, Truth Social.

Iran’s deputy foreign minister, Kazem Gharibabadi confirmed, “A permanent and immediate end to the war has been declared on all fronts.”

The agreement would extend the ceasefire for 60 days to allow negotiations to begin about Iran’s nuclear programme, and lead to a final peace agreement. Plenty of thorny issues remain to be resolved, however which could potentially scupper the deal and lead to renewed conflict.

Claudio Galimberti, chief economist, Rystad Energy commented, “This deal, if it holds, is the most workable outcome available to all parties at the table, which gives it a degree of credibility. Washington has an incentive to avoid a spike in gasoline prices ahead of the midterms, while Tehran is seeking sanctions relief and restored export revenues, and the global economy has a strong interest in keeping the Strait of Hormuz open.”

However the sequencing dispute, with both sides insisting the other must move first, remains the main barrier, while Lebanon continues to represent a wildcard that neither Washington nor Tehran fully controls, he notes. While a credible reopening of the Strait of Hormuz would be one of the most important developments for the global economy, a return to normalised market conditions immediately upon signature in Switzerland would look optimistic.

“It will take time for production to ramp back up, for logistics to normalise, and for the risk premium embedded in crude prices to dissipate, particularly given that the structural shift implied by the UAE’s exit from OPEC+ is not reversed by any near-term diplomatic outcome.

“If the deal holds, it will therefore represent a step in the right direction, and an important one at that, but still a step rather than a destination.”

Even if the agreement holds, it is likely to take some time for traffic through the Strait to return to pre-war levels, with marine insurance rates remaining at a high level, mines needing to be cleared, and tankers needing to be repositioned.

Restarting oil production and getting all the elements of the logistics and supply chain in place could take months.

Total pre-conflict supply across the six Gulf producers stood at 24.2mn bpd in January 2026; current output has fallen to 12.4 million bpd, Rystad notes. Saudi Arabia accounts for the largest single share of lost barrels at 3.8mn bpd, followed by Iraq at 2.8mn bpd and Kuwait at 2mn bpd.

Energy consultancy Wood Mackenzie's view is that if the negotiations continue to make progress, and the Strait of Hormuz is reopened within a few weeks, oil supply from the strongest producers in the Gulf region can be restored relatively quickly, with shipping and logistics likely to be the bottleneck in the early phases of the recovery, rather than upstream producers.Countries with more complex assets, particularly Iraq, will take longer to recover, but could still return close to pre-war levels in six to nine months.

Ed Crooks, vice chair Americas at Wood Mackenzie, says that while Interest in coal, renewables and nuclear power has grown, as has the focus on hydrocarbon assets outside the Middle East, particularly in the Americas, the structural advantages of the Gulf producers as sources of low-cost oil and gas have not changed.

"When exports can flow freely from the region again, they will be highly competitive in world markets," he said.

OPEC+ decision to raise production likely to have limited impact

In the current market, the physical impact of OPEC's decision will be very limited. (Image source: Adobe Stock)

The seven OPEC+ countries, which previously announced additional voluntary adjustments in April and November 2023, namely Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman, have agreed to increase production by 188,000 bpd from July

However, the impact of this increased production quota is likely to be limited, according to Jorge Leon, head of geopolitical analysis at Rystad Energy

“With the Strait of Hormuz closed, the issue is not whether OPEC+ raises paper quotas, but whether additional barrels can actually reach the market,” he said.

“OPEC+’s decision to continue increasing production by 188,000 barrels per day confirms that the group remains on track to unwind the first tranche of voluntary cuts by September, if not earlier. But in the current market, the physical impact of such a decision would be close to zero.”

Leon noted that not only is the Gulf facing oil export obstacles, Russia is also under pressure as a result of intensifying drone attacks on its oil infrastructure.

“The latest increase will likely expose a widening gap between OPEC+ targets and Russia’s actual production capacity,” he said.

“The more important question is what happens after the first tranche of voluntary cuts has been fully unwound. The capacity assessment currently undergoing should serve as the basis for 2027 quotas, but with the Strait of Hormuz closed and several producers operating far below normal levels, it will be very difficult to accurately assess each country’s sustainable production capacity. That makes the next quota reset much more politically sensitive.”

Once the Strait of Hormuz reopens and flows gradually recover, the market could face a very large surplus, he pointed out, driven by returning OPEC+ supply, stronger US shale output and weaker demand after a period of very high oil prices. The UAE, now free from its OPEC quotas, would also likely ramp up production.

Once restocking concludes, OPEC+ may be forced to implement cuts again.

“That is when cohesion will become the central issue. OPEC+ cohesion is easy to maintain when the market does the discipline for you. The real test is whether that holds when the barrels come back, stocks rebuild and members have to decide who cuts.”

At the moment though, the reopening of the Strait of Hormuz seems a distant prospect, given the resumption of hostilities between Israel and Iran, which has caused the oil price to spike again.

“Despite ongoing diplomatic efforts, markets remain concerned that even a peace agreement would not immediately restore normal energy flows due to damaged infrastructure, mined waterways, and production outages,” commented MUFG Bank, echoing other industry analysts. “The renewed escalation has reinforced fears of prolonged supply disruptions, keeping upward pressure on oil prices despite OPEC+ plans to gradually increase output.”

McDermott secures major Aramco PMC contract

McDermott Secures Strategic Project Management Consultancy Contract with Aramco.

McDermott has announced a highly coveted partnership: it has been hand-selected by Aramco as one of only eleven contractors to drive forward massive project management consultancy solutions across the Kingdom of Saudi Arabia.

Executing complex energy infrastructure is a strategic priority for Aramco, tied directly to the Kingdom’s long-term development goals. Securing robust project management provides a reliable, integrated framework for large-scale energy, downstream, petrochemical, and low-carbon programmes.

Through a newly established multi-year Project Management Consultancy (PMC) Long-Term Agreement (LTA), McDermott is officially positioned as a central engineering and project management service provider within Aramco's sprawling strategic investment portfolio. Operating as a fully integrated provider in over 30 countries with a workforce exceeding 30,000 personnel, McDermott continues to advance the next generation of global energy infrastructure.

The joint venture's integrated Out-of-Kingdom and In-Kingdom delivery model leverages McDermott's global experience alongside Solutions Leaders Fayez Engineering's (SLFE) local capabilities. SLFE operates as an Aramco-approved general engineering services plus (GES+) contractor, and this framework produces dynamic, efficient execution while adhering to Aramco's rigorous In-Kingdom Total Value Add (IKTVA) and localisation objectives.

As part of this strategic collaboration, McDermott will combine its overarching technical expertise and global delivery frameworks with SLFE's robust domestic presence to seamlessly transform project execution. McDermott will provide its technology leadership in overall execution planning, governance, and front-end development (pre-FEED and FEED), seamless integration through established engineering centres, and continuous oversight to develop a fit-for-purpose project management solution for Aramco processes. SLFE, meanwhile, will spearhead engineering and client support within the Kingdom.

“Just as the United States and the Kingdom share a commitment to long-term collaboration, we share a commitment with SLFE to localisation, knowledge transfer and sustainable capacity building within the Kingdom,” said Michael McKelvy, McDermott's chief executive officer and chair of the board.

“This long‑term agreement reflects Aramco's confidence in our proven execution capabilities and our track record of delivering complex, world‑class projects in the Kingdom,” added Rob Shaul, McDermott's senior vice president of low carbon solutions.

Ashraf Alkhaznadar, SLFE's president and CEO, noted the mutual benefits of the joint venture for the region's broader development. “We are proud to partner with McDermott on this strategic agreement with Aramco,” he said. “Together, we bring complementary strengths that support Aramco's long‑term vision while continuing to develop national engineering capability.”

This landmark agreement underscores McDermott’s deeply rooted relationship with Aramco and its established history of successfully executing intricate engineering and energy projects throughout the Middle East. By continuing to deliver fully integrated, technology-driven solutions from concept to commissioning, McDermott is not only cementing its critical role in advancing the Kingdom's long-term developmental and energy transition targets, but it is also actively shaping the next generation of global energy infrastructure to empower a more sustainable future for the wider industry.

Sonardyne and AMOG partner for advanced subsea asset monitoring

Image_of_ complete_subsea_asset_monitoring_service

An artist’s illustration showing a floating production system with mooring spread. Image from Sonardyne.

As offshore energy infrastructure expands into increasingly demanding environments, safeguarding the integrity of underwater assets has become a paramount priority for the sector

Rising to this challenge, the underwater technology specialist Sonardyne has formally signed a Memorandum of Understanding (MoU) with AMOG, an international advanced engineering company. Together, they are set to provide a complete subsea asset monitoring service tailored directly to the needs of offshore energy infrastructure operators.

This strategic alliance seamlessly integrates Sonardyne’s trusted underwater positioning, communication, and monitoring technologies with the industry-leading engineering assessment expertise of AMOG. By harnessing their combined capabilities, the partnership aims to unlock vital insights into asset health, substantially reduce costly operational downtime, and enable the safe life extension of critical underwater architecture. Crucially, this comprehensive monitoring approach will support a wide spectrum of subsea installations, encompassing floating offshore wind platforms and traditional oil and gas moorings, alongside essential pipelines and risers.

Dr Hayden Marcollo, a globally recognised specialist in moorings and vortex-induced vibration engineering and analysis, serves as a director at AMOG. Highlighting the transformative potential of the collaboration, he says: “Combining high‑quality subsea data, processed at source on Observer, with advanced engineering assessments, will provide asset owners with more actionable, near-real-time insight into the condition and behaviour of critical subsea infrastructure through a single solution.”

The implications for infrastructure management are profound. Providing a unified approach to complex engineering challenges allows for a proactive rather than reactive operational strategy. As Dr Marcollo further elaborates regarding the commercial benefits: “For operators, this could support earlier detection of anomalies, improved understanding of loads and motions, and more informed decisions around inspection, maintenance and integrity management, as well as asset longevity, in one end-to-end solution.”

The practical application of this partnership is already well underway. Demonstrating the system's immediate relevance to the rapidly expanding renewable energy market, Sonardyne and AMOG are actively collaborating on a near-real-time mooring monitoring system tailored for a European floating offshore wind project.

Frank Rose, business development manager at Sonardyne, outlined the broader vision for the joint initiative. He notes: “By integrating on-demand and long‑term monitoring data from subsea environments with engineering models and analytics, there’s an opportunity to provide a more complete picture of asset performance—whether supporting day‑to‑day operations, integrity assurance or life‑extension strategies.”

This MoU represents a forward-thinking approach to subsea infrastructure management that promises to enhance operational excellence. “By working alongside AMOG, we’re exploring how data and engineering assessments can come together to give operators greater confidence in the way their subsea assets are performing, today and over the long term," Rose adds

Weatherford to acquire NCS Multistage

The acquisition with strengthen Weatherford's well construction and unconventionals capabilities. (Image source: Adobe Stock)

Weatherford is set to enhance its well construction and unconventionals capabilities with an agreement to acquire NCS Multistage, a leading provider of highly engineered products and support services for well construction, well completion and field development

NCS Multistage, which is active in North America and selected global markets including the Middle East, brings solutions designed to enhance reliability and performance in complex well environments. The acquisition is expected to complement and enhance Weatherford’s portfolio by expanding well completions offerings while deepening Weatherford’s capabilities in the unconventional space, a growth area in the Middle East. Projects in the region include Aramco’s Jafurah unconventional gas development, the largest non-associated gas development in the Kingdom of Saudi Arabia, estimated to contain 229 trillion standard cubic feet of raw gas and 75bn bbl of condensate. The UAE also has promising unconventional gas resources and has been accelerating its unconventional gas developments including across the Ruwais Diyab field. ADNOC is expected to reach FID this year with TotalEnergies on an unconventional gas project.

The acquisition of NCS Multistage will also enable the provision of differentiated, technology-enabled solutions that help customers improve operational and production outcomes; and enhance growth prospects for NCS Multistage by leveraging Weatherford’s international footprint.

Girish Saligram, Weatherford’s president and chief executive officer, commented, “The acquisition of NCS Multistage is a natural complement to our completions strategy and enhances the application fit of our well construction products portfolio. NCS Multistage's technology is expected to enhance our ability to serve customers across the completion lifecycle, from well design through production optimisation and late-life interventions, while deepening our exposure to the growing unconventional resource market. We expect to realise at least US$15mn in annual run-rate cost synergies over a period of 18 months. Additionally, we see a meaningful opportunity to create additional value by bringing this technology to our global customer base.”

Ryan Hummer, NCS Multistage’s chief executive officer, added, “This is a significant step for NCS Multistage that we believe positions our business—and the talented people who built it—for the next phase of growth as part of a leading global energy services company. This combination creates an opportunity for our products, technology, and people to reach a broader set of customers and markets faster than we could on our own, supported by Weatherford’s financial strength and international footprint, providing long-term opportunity and value for our stakeholders.”

The transaction is subject to regulatory approval and is expected to close in the second half of 2026.

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