Six Global Issues to Watch in May 2026
A Shake-Up for the Oil Industry
The oil industry has had an extremely tumultuous 2026 and this could usher in a period of massive change for this industry. Obviously, the war in Iran has had a massive impact on the oil industry and could change the geography of the industry. Likewise, soaring oil production in the United States has shaken up the industry and prompted other oil producing countries to move to unleash higher levels of oil production at home. This certainly impacted the recent decision by the United Arab Emirates to announce its withdrawal from OPEC, a move that other OPEC member states may seek to emulate in the coming months. How Saudi Arabia reacts to these developments will be closely watched in the coming weeks. Altogether, it appears that global oil production will rise sharply once the situation in Iran is resolved, with the price of oil likely to remain very high until then.
What is Next in Iran and the Gulf
The situation in the Persian Gulf and Iran remains uncertain and this is likely to remain the case in the coming weeks. A fragile ceasefire between the United States and Iran remains in place, but could be shattered at any time. Meanwhile, the US continues to blockade Iranian ports, while Iran continues to prevent most shipping from traversing the Strait of Hormuz, resulting in a continued blockage of one of the world’s most important maritime chokepoints. Negotiations between the US and Iran in Pakistan have so far made little progress, with both sides setting conditions that the other would find hard to accept. This could lead to the United States deciding to use force to win concessions from Iran, as the US continues to build up its military forces near Iran to ensure that this option remains on the table. What is a certainty is that the disruptions caused by this conflict will last for a long time to come.
Energy Shortages
One of the disruptions caused by the war in Iran has been the proliferation of energy shortages to many different parts of the world. In Asia, many countries are threatened with severe energy shortages as they remain dependent upon oil and gas shipments from the Gulf region for much of their energy supplies. Likewise, Europe is facing yet another energy crisis due to the closure of the Strait of Hormuz, with energy supplies already running low in some parts of Europe. One area of concern is jet fuel, with analysts warning that Europe and some other regions may have just a few weeks of jet fuel left ahead of the busy summer travel season. Should the strait remain closed for a prolonged period of time, the damage to the global economy could be immense and could push the global economy into its most severe downturn since the Covid-19 pandemic.
Colombia’s Election
Not long ago, it appeared that the right-wing of Colombian politics would return to power in that country. Left-wing President Gustavo Petro was extremely unpopular, and his government was struggling with a multitude of economic and social crises. However, the president and the political-left in general has staged a strong comeback in Colombia in recent months, bolstered by President Petro’s vocal opposition to the policies of United States President Donald Trump in Latin America. Now, the left-wing’s leading candidate in this month’s presidential election in Colombia, Ivan Cepeda, is in a strong position to become that country’s next president. Polls show him easily winning the largest share of the vote in the first round of voting, with two conservative rivals vying for second place and a spot in a run-off election against Mr. Cepeda.
China’s Export Prowess
Despite efforts by the United States and other major economies to limit growth for Chinese imports, China continues to record strong export growth. In the first quarter of this year, Chinese exports increased by 14.7% year-on-year, driven largely by strong growth in manufactured and high-tech exports. Much of this growth was driven by soaring exports to Europe, which now faces a massive trade deficit with China. In contrast, Chinese exports to the United States declined by 26.5% year-on-year in the first quarter, as US trade barriers continued to curtail Chinese exports to the world’s largest economy. Meanwhile, China’s domestic market has remained subdued, as consumer confidence remains weak amid serious debt problems in the real estate and construction sectors. Thus, China is likely to continue to pursue export-driven growth, potentially provoking a backlash in some of its key export markets.
Trump May be Running Out of Time
Nearly all polls in the United States show that President Donald Trump is suffering from some of the lowest approval ratings of any recent US president. In fact, some polls now show that barely more than one-third of US voters approve of President Trump’s performance. Worse, President Trump’s approval ratings in many states that he won handily in 2024 are now below 40%. As a result, it is all-but-certain that the Democrats will win control of the House of Representatives in November’s mid-term elections, and might even win control of the Senate as well. At the same time, there are growing questions about President Trump’s health and state-of-mind, raising questions about his ability to run the US for another 32 months. That said, with the Republicans’ total control of the US government likely coming to an end in early 2027, expect the Trump Administration to remain very pro-active in attempting to push its agenda forward in the coming months.