Nuclear fuel supply chain unprepared for rising demand, analyst warns
Oil futures settled at their highest level since May 22 on Wednesday as strikes between the U.S. and Iran escalated and Houthi attacks on Saudi Arabian oil infrastructure intensified, with analysts warning that continued conflict could send prices above $100 a barrel.
Brent crude settled up 3.4% at $101.21 a barrel and West Texas Intermediate rose 3.2% to $96.05, according to The Wall Street Journal’s energy and utilities roundup of market analyst notes. The Nymex diesel benchmark climbed 5.1% to $4.8010 a gallon — its highest close since April 28, 2022, and the second-highest on record — as Ukrainian attacks on Russian refineries and Persian Gulf disruptions tightened supply.
Phil Flynn of the Price Futures Group said diesel is where the squeeze is concentrated. “Watch diesel harder than crude. That’s where the real squeeze lives,” Flynn said in a note. “Russia can’t export diesel. The U.S. and India are running flat-out to fill the gap.”
John Deal, managing director of capital markets at Post Oak Group, pointed to the risk of further escalation. “I frankly think we’re in really risky territory right now,” Deal said, citing the significant risk of damage to Saudi infrastructure. “I wouldn’t be surprised, if this conflict doesn’t wrap up soon, I think we could be looking at prices over $100 maybe as high as $120.”
Nikos Tzabouras of Tradu said renewed fighting has dimmed prospects for a settlement, creating room for sustained upside in crude. He added that the U.S. continues to prefer pressuring Tehran through economic measures and that “President Trump may also be incentivized to seek an off-ramp as the conflict increasingly clashes with his domestic agenda, with the midterms getting closer.”
The roundup also featured analyst notes from across the global energy sector. In Mexico, the federal government’s 2027 budget proposal includes transfers of around $4.5 billion to state oil company Pemex for debt payments, deferring plans for the company to be financially self-sufficient next year. Analysts at Banamex wrote that while the lower budget support is an improvement over 2026, “it doesn’t break the financial link to the sovereign or show that Pemex can finance its operations, investment and financial obligations by itself.” The plan projects crude oil exports at 426,600 barrels a day, down from 522,400 this year, and Mexico’s average crude price at $61.80 a barrel, down from an estimated $78.40 for 2026.
At the Barclays CEO Energy-Power Conference in New York, TotalEnergies CEO Patrick Pouyanne said he does not see a physical gas supply risk in Europe but that the continent will need to compete with Asia for LNG cargoes, potentially supporting prices. Pouyanne described his outlook for oil as “more uncertain.” Barclays analyst Lydia Rainforth, who hosted Pouyanne at the conference, said it is unclear whether the drop in Chinese demand since the conflict began reflects structural changes or temporary demand destruction. Separately, Rainforth wrote that TotalEnergies is exploring oil and gas investments in the U.S., with the company’s upcoming capital markets day expected to provide clarity on its strategy through 2035.
On nuclear energy, UxC President Jonathan Hinze said the setup for nuclear growth “is the best it has been in a very long time,” citing energy security concerns, climate policy and rising power demand from data centers. “At the same time, the nuclear fuel supply chain is not yet fully engaged in responding to this rising demand outlook despite significant increases in prices,” Hinze said, warning of a potential shortfall by the 2030s that would require substantial new uranium mine development.
In Asia, Yuanta Securities Korea initiated coverage of Korea Gas with a buy rating and a 47,000 won price target, projecting 14% growth in consolidated operating profit to 2.404 trillion won in 2026, with overseas operations rising to 25% of profit from 15% in 2025 as LNG fields in Canada and Mozambique increased production. Shares were 0.4% higher at 36,300 won. In Malaysia, CIMB Securities analyst Muhammad Afif Bin Zulkaplly said upstream development spending could accelerate as higher oil prices improve project economics, while RHB Chief Economist Barnabas Gan projected Brent to fall to $85 a barrel by end-2026 and $75 a barrel by end-2027, assuming a renewal of geopolitical easing. Malaysian crude grades have continued to command significant premiums over global Brent, Gan said.
On the Strait of Hormuz, Barclays analyst Ramachandra Kamath wrote that disruption of the waterway has strengthened the case for Adnoc Gas to have export capacity on the U.A.E.’s east coast, though questions about who would pay for the plant remain. The U.A.E. government is considering options to de-risk its reliance on the waterway, Kamath said, and ownership versus usage will be the key question for Adnoc Gas investors.
In Australia, Macquarie maintained an “underperform” call on power generator and retailer AGL Energy with an A$7.94-per-share price target, below Wednesday’s close of A$8.78. Macquarie said consensus expectations for fiscal 2027 Ebitda of A$2.04 billion are materially too high and that “power pricing is likely to stay below A$100/MWh (New South Wales) in FY28 and FY29.”