Despite Strait of Hormuz conflict, oil still king in Converse County
DOUGLAS — The Strait of Hormuz remains under high restrictions despite the June 17 memorandum of understanding agreed upon by Iran and the United States – meaning the price of oil and other goods isn’t likely to change anytime soon.
If things don’t change quickly, oil could return to the nearly $100 a barrel range, which would be a good indicator for continued growth in exploration and production in Wyoming – and Converse County could see the bulk of that, according to according to Kyle Bertamini, principal analyst at Texas-based Enverus, a leading energy data analytics and software company.
Bertamini said it is worth recognizing Wyoming drilling is concentrated in oil, so local activity rises and falls with oil prices, not gas.
“(The) Hormuz normalization pace is the biggest price swing factor for the next few months,” he said.
The strait as of July 5, according to the Hormuz Strait Monitor (HSM, www.hormuzstraitmonitor.com), is dealing with multiple challenges with ongoing mine clearance, low transits of just 40-43 vessels each day (60-130 per day was normal pre-conflict), and recent escalatory incidents such as drone and missile attacks on two vessels in late June.
While the Fourth of July holiday period paused “diplomatic momentum,” only a handful of weeks are left in the 60-day negotiation period until the Aug. 17-18 deadline for a full cease fire, according to HSM.
If the agreement between the U.S. and Iran is not met, the 60-day free passage window established under the MOU will end, as will the U.S. emergency shipping waivers. The ongoing Strait of Hormuz debacle has made predicting the oil and gas markets future anything but easy, according to many energy experts.
Closer to home
Converse County continues to lead the Cowboy State in standing oil rigs with 10 (June 30, 2025). Campbell County saw two standing rigs last month, and Sublette, Carbon, Sweetwater
and Johnson counties came in with one each, for a statewide total of 16 new wells, according to Bertamini.
“Converse leads and is climbing,” he said. “The new rigs (people are seeing) track the data. Activity is firm. Statewide rigs are up from early years, and the Lower 48 count sits above (Strait of Hormuz) pre-conflict levels.
“The drilling is broad across the continent, not just in Wyoming. We expect U.S. oil output to grow ~300 Mbbl/d (millions of barrels per day) and gas ~1.7 Bcf/d by year-end, with more gains in 2027,” Bertamini said.
Oil and gas companies working in Converse County are applying for various permissions and permits to government entities such as Wyoming Department of Environmental Quality and others. And those who take a short drive from Douglas up WYO 59 to Walker Creek Road will see for themselves new drilling pads, with standing oil rigs claiming well sites within the entire area, including along Manning Road and others.
As an example, Continental Resources, Inc. applied to WDEQ in June to construct and operate a new sweet crude oil and natural gas production facility to consist of four wells, with two vapor recovery units and one common smokeless dual-tip flare (to control volatile organic compound and hazardous air pollutant emissions associated with the vapor recovery towers and produced gas during pipeline downtime).
These new wells are approximately 18 miles north-northwest of Douglas, WDEQ said.
O&G companies Anschutz, Devon Energy, Chesapeake Energy, EOG Resources and Continental are just a handful of companies who have a dominant role in petroleum extraction and production in the Powder River Basin.
What’s next?
Those who are paying attention to the situation at the Strait of Hormuz are likely aware the price of oil has gone down considerably as the U.S. and Iran continue to work out an agreement to open up the waterway connecting the Persian Gulf to the Gulf of Oman.
The waterway, according to the BBC, functions as a critical global shipping chokepoint, facilitating the daily transit of approximately 20% of the world’s oil and liquefied natural gas.
“As of June 24, Brent (Crude) has dropped below $77 (per barrel), near $75, down roughly 40% from its wartime peak, on the Hormuz reopening and U.S. and Iran talks,” Bertamini said. “The on-again, off-again headlines drive most of the swings: talks stalled June 19 and prices rose, the reopening firmed and prices fell.
“Our view is the sell-off is financial / trader positioning, not fundamentals,” he continued. “Physical flows take months to normalize, inventories sit at multi-decade lows, and we expect a recovery toward ~$100/bbl averaged for (the second half of 2026) and 2027.”
As of early evening July 5, Brent Crude sat at $72.12 per barrel, while West Texas Intermediate was selling for $68.29 per barrel, and Murban Crude was at $66.48 per barrel.
These figures are considerably lower than the more than $100 a barrel figures seen during the months of Hormuz conflicts.
Looking out a year from now, Bertamini said his company forecasts “constructive, higher-for-longer (prices).” Even as Middle East barrels return, the world must rebuild depleted stockpiles, which keeps a floor under prices.
For Wyoming, that supports continued drilling, weighted to 2027, he said; the main risk is a faster Hormuz reopening and a return to pre-war levels, “worth roughly $15/bbl to the downside.”
Natural gas
“(Natural gas) is the weaker story,” said Bertamini. “Henry Hub sits near $3 (relatively weak when compared to recent history), held down by supply outpacing soft domestic demand. LNG (liquid natural gas) exports are the one real growth engine, headed above 20 Bcf/d (billion cubic feet per day) by year-end.
“Wyoming is a solid gas producer but not a price-setter and is a small piece of the U.S. pie,” Bertamini explained. “The basins that move the national market are Appalachia, the Haynesville, and Permian associated gas. State rig activity is oil-led, so Wyoming tracks oil far more than gas.”
This story was published on July 8, 2026.
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