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KEY ITEMS ARISING FROM JUNE 1, 2026, TO JULY 5, 2026
- Iran War:
On June 17, 2026, a memorandum of understanding (MOU) was agreed between Iran and the US. The MOU provides a framework for discussions between Iran and the United States over a 60-day period. Discussions have commenced and are on-going. On July 1, 2026, Al Jazeera reported that Iran is to establish a “communication channel” with the US to report breaches of the MOU.
We have included in the schedule to this P2N0 a summary of the MOU and a link to the MOU.
As the Strait of Hormuz opens, many have reflected on the impact, in particular the time that it will take to return to the pre-February 28, 2026, status quo.
In the context of LNG, on June 30, 2026, the good folk at Reuters reported on the thinking of Shell (contained in its LNG Outlook 2026); in short, it will take three months to return to the pre-February 2028 status quo, with the result that the LNG trade will be flat for 2026, with a growth to return in 2027. The LNG Outlook 2026 states the long-term view of Shell - global LNG trade will increase from around 425 million metric tonnes to 700 million metric tonnes by 2050.
In the context of oil, a considerable number of perspectives have been shared. On July 2, 2026, the good folk at Al Jazeera reported that traffic through the Strait of Hormuz has increased faster than expected since to the signature of the MOU. A consequence of this is that oil supply has increased impacting the price of oil. At the moment, there are 90 cargoes on the water without a destination. The near-term impact of the return of supply will be cleared as these cargoes find a home.
As a mark of optimism for demand in the near-term, on July 3, 2026, it was reported that TotalEnergies was seeking to hire very large crude carriers (VLCC) to enable the carriage and delivery of millions of barrels of crude oil loaded from Basrah, Iraq.
- Energy Institute Statistical Review of World Energy: On June 30, 2026, the Energy Institute, “working in partnership with Ember and in collaboration with Kearney and KPMG” published the 75th edition of the Statistical Review of World Energy. The publication provides an overview of energy supply and demand.
The key findings are:
- Record energy demand - total energy supply (TES) increased by 1.7%, with all major energy sources rising to all-time highs for the second consecutive year.
- Low-carbon breakthrough - renewable energy development and deployment - was the largest source of TES growth for the first time outside of a recession, with solar power accounting for 71% of the increase in renewable energy capacity.
- US emissions rise faster than China - US energy-related GHG emissions grew 3.2%, driven by a 13% surge in coal-fired power - in absolute terms, four times the growth of China.
- Solar and storage surge - solar generation expanded by 30% worldwide, while battery capacity grew at 66%, reinforcing their role as the fastest-scaling clean technologies.
- Energy security pressures intensify - a 4.8% growth in oil production in the Americas, which has helped lessen the impacts of the Iran War.
- 52nd G7 Summit: From June 15 through June 17, 2026, the 52nd G7 Leaders’ Summit took place in Évians les-Bains, France. The G7 leaders welcomed the announcement of the MOU and expressed support for, and readiness to contribute to, its implementation.
In a joint statement, the G7 leaders framed the MOU as an opportunity to address the causes of the Iran War. The joint statement from the G7 may be regarded as an expression of support rather than as a basis for implementation of the subject matter of the MOU, including in respect of the cessation of sanctions. A link to the joint statement is included.Among other agenda items, the G7 leaders continued to discuss critical mineral supply through the Critical Minerals Production Alliance established under the Critical Minerals Action Plan. In this context, the G7 leaders emphasised the need to increase the development of a diversity of supply chains for critical minerals and rare earth elements. The G7 leaders have expressed intent to achieve diversity. A link to the G7 Leaders’ declaration on securing supply chains for critical minerals is included. Australia, a partner country of the G7 is stated to support the declaration. The International Energy Agency (IEA) is reported to have contributed to discussions at the G7 meeting. The IEA announced that it is looking “forward to working closely with G7 members” through its Critical Minerals Security Programme.
- TotalEnergies required to address climate risks arising from its products: On June 25, 2026, the Paris Judicial Court, in a press release (in French), found that the Duty of Vigilance Law applied to corporations in respect of climate change. As reported, and as understood, the finding makes it clear that corporations must articulate the climate change risks arising from the use of products produced by any corporation.
The consequence of the finding is that TotalEnergies is to publish a revision to its vigilance plan, with the Paris Judicial Court to review the revised vigilance plan on January 21, 2027. The finding of the Paris Judicial Court arose from an action brought by the City of Paris, Notre Affaire à Tous, Sherpa and France Nature Environnement.
By way of contrast: Edition 44 of P2N0 reported that “Shell faces action seeking end to investments in natural gas and oil projects”. The TotalEnergies case is different from the action brought against Shell: the TotalEnergies case determined whether or not a duty to disclose climate risks arising from the use of products produced by it under the Duty of Vigilance Law, not whether TotalEnergies should reduce or cease production, whereas the action brought against Shell seeks to determine whether Shell has a duty to cease investing in new hydrocarbon projects, resulting, over time, in the cessation of production.
Edition 44 of P2N0 reported that: “On April 21, 2026, it was reported widely that Friends of the Earth Netherlands had filed an action against Shell.
Edition 20 of P2N0 reported on the outcome of an earlier case brought against Shell as follows:
“Shell wins appeal: On November 12, 2024, the Court of Appeal in The Hague ruled in favour of Royal Dutch Shell (Shell) in the appeal against the decision in Milieudefensie at al v. Royal Dutch Shell. As noted in Edition 12 of P2N0, Shell appealed against the decision of the District Court of The Hague: the decision required Shell to reduce the net CO2 emissions of the Shell by at least 45% by 2030, compared to 2019 levels.”
The findings of the Paris Judicial Court have drawn attention to Scope 3 emissions, and the reporting of them: corporations producing products from fossil fuels are reporting Scope 3 emissions, i.e., being the GHG emissions that arise from the use of fossil fuels. As reported, around 90% of the total GHG emissions arising directly and indirectly from the activities of TotalEnergies and the use of its products are Scope 3 emissions.
Edition 43 of P2N0, reported on the publication by Shell plc of its LNG Portfolio – Strategic Spotlight / March 2026LNG Portfolio – Strategic Spotlight / March 20261: it is not unusual for the Scope 3 Emissions corporations producing hydrocarbons to exceed 80% of their total Scope 1, 2 and 3 Emissions.
Footnote
1. As reported, Shell plc reported 1.1 billion metric tonnes of CO2-e emissions during 2025, with Scope 3 emissions (including from the combustion of fuels produced by Shell). The net carbon intensity is 71 grams of CO2-e per megajoule of energy production on combustion of fuels.
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