The global oil market may be treating the Iran conflict as a temporary disruption. TORM CEO Jacob Meldgaard believes that could be a mistake.
In an August 26 interview with the Financial Times, Meldgaard argued that the conflict is increasingly moving toward a Ukraine-style stalemate — one that could last months or potentially years rather than days or weeks. His argument is that markets are once again assuming economic disruption will eventually force the parties toward a quick resolution, much as many expected following Russia’s invasion of Ukraine.
For the oil and gas industry, the implications go well beyond today’s oil price.
If Meldgaard is right, the conflict could reinforce a much larger structural shift in global energy markets:
The United States is increasingly becoming the world’s “safe barrel of oil.”
The Market May Be Underestimating the Duration
Meldgaard’s perspective is particularly important because TORM sits directly inside the global movement of petroleum.
The company operates almost 100 tankers transporting refined petroleum products around the world. TORM reported a record $338 million Q2 2026 net profit, compared with $59 million a year earlier, as Middle East disruptions drove freight rates sharply higher.
But Meldgaard’s bigger message isn’t about tanker profits.
It’s about duration.
Gulf producers are increasingly preparing to operate around the conflict rather than waiting for it to disappear. National oil companies are expanding tanker capacity and developing alternative logistics to continue moving petroleum despite the risks surrounding the Strait of Hormuz.
That adaptation comes with significant inefficiencies.
Meldgaard estimates that maintaining pre-war export volumes under these conditions could potentially require twice as many crude supertankers and three times as many large refined-product tankers.
In other words, Middle Eastern oil doesn’t necessarily disappear.
It becomes harder, riskier and more expensive to move.
The U.S. Barrel Looks Different
This is where the competitive position of U.S. oil becomes increasingly important.
The United States doesn’t need to move its production through the Strait of Hormuz. It has an enormous domestic production base connected through pipelines, gathering systems, processing infrastructure, refineries and export terminals.
That infrastructure gives the U.S. barrel something increasingly valuable:
Security of supply.
The U.S. has also evolved into a major energy exporter. EIA data show U.S. total energy exports reached a record 31 quadrillion Btu in 2025, while the country recorded another record as a net energy exporter. Petroleum represents the largest component of U.S. energy trade.
The Iran conflict is already demonstrating what this means commercially.
TORM itself reported that the disruption of Middle Eastern exports during Q2 resulted in global buyers looking for replacement barrels from the United States.
That is the Safe Barrel thesis playing out in real time.
Safe Doesn’t Necessarily Mean Cheap
The concept of the Safe Barrel isn’t that U.S. oil will always be the world’s cheapest barrel.
It means it can increasingly become one of the world’s most dependable barrels.
When Middle Eastern supply faces geopolitical and shipping risks, Russian barrels face sanctions and trade restrictions, and other producing regions face political or infrastructure constraints, North American production offers something global consumers increasingly value:
Reliability.
The American Petroleum Institute recently described the United States as increasingly positioned to help stabilize global energy markets when disruptions occur elsewhere — the result of sustained investment in domestic oil and natural gas production and infrastructure.
That strategic value grows if Meldgaard’s central argument proves correct.
A three-week disruption can be treated as an event.
A three-year disruption becomes part of how companies make investment decisions.
From Geopolitical Risk to North American Opportunity
This creates an important distinction for U.S. oilfield service companies.
The opportunity isn’t necessarily dependent on operators launching another massive drilling cycle.
Operators already control millions of barrels of production from existing U.S. wells.
With strong commodity prices and greater geopolitical value being placed on dependable North American production, operators have increasing incentive to protect, optimize and incrementally increase production from the assets they already own.
That means reducing downtime.
Slowing base declines.
Accelerating workovers.
Optimizing artificial lift.
Improving production chemistry.
Debottlenecking facilities.
Automating field operations.
Using AI and analytics to identify production problems earlier.
And ultimately producing more barrels while controlling Lease Operating Expense per BOE.
This is what I describe as the emerging Maintenance Plus strategy.
The Safe Barrel Needs to Be Maximized
If the Iran conflict becomes a prolonged stalemate, the U.S. industry’s role isn’t simply to drill more wells.
It’s also to maximize the enormous producing asset base already in the ground.
A producing Permian, Eagle Ford, Bakken or other U.S. shale well that can generate additional production through a workover, artificial-lift optimization, chemical program or automation improvement can potentially deliver incremental barrels much faster than developing an entirely new source of global supply.
That creates opportunities across the oilfield service ecosystem — particularly for companies focused on production optimization, artificial lift, chemicals, workovers, automation, AI, monitoring and production equipment.
The strategic question for operators increasingly becomes:
How do we get more reliable production from the assets we already have without allowing operating costs to grow at the same rate?
The Bigger Picture
Meldgaard’s warning deserves attention because it challenges one of the assumptions underlying today’s oil market: that geopolitical disruption in the Persian Gulf will eventually resolve and the system will return to normal.
It may not.
The more important possibility is that the global oil industry adapts to a prolonged period of disruption, just as global energy markets adapted following Russia’s invasion of Ukraine.
If that happens, the value proposition of U.S. production changes.
The U.S. isn’t simply one of the world’s largest oil producers.
It increasingly becomes the Safe Barrel — a large, scalable and comparatively secure source of production capable of helping stabilize global supply when other producing regions become less predictable.
And if the world needs more Safe Barrels, the opportunity isn’t limited to drilling new wells.
The next barrel may increasingly come from getting more out of the wells already producing today.
Author: phinds