By Ron Bousso

May 21 (Reuters) - Energy Watch is a twice-weekly recap of the events and trends shaping global energy markets from ROI Energy Columnist Ron Bousso

When it comes to the Iran conflict, words are proving louder than actions. Oil prices retreated sharply on Wednesday to $105 a barrel after President Donald Trump suggested once again that talks with Iran to end the conflict were making progress, saying he was prepared to wait for a few days to get a deal done. Tehran submitted its latest offer to the U.S. this week and on Thursday said it was reviewing Washington's latest position on ending the war.

Yet six weeks since a fragile ceasefire came into force, the talks have shown little progress. Vital oil and gas transit through the Strait of Hormuz remains severely constrained while soaring oil prices have raised concern over rising inflation and the impact on the global economy.

On Wednesday, Iran released a map showing a "controlled maritime zone" in the strait, stating that transit would require authorisation from an authority set up to control the area. Tehran says it aims to reopen the strait to friendly countries that abide by its terms. That could potentially include fees for access, which Washington says would be unacceptable.

So for now, a precarious new reality is emerging in the Gulf. Sultan Al Jaber, the CEO of Abu Dhabi’s National Oil Company (Adnoc) said on Wednesday that no nation should accept “that a single country can hold the world's most important waterway hostage.” But Iran is unlikely to loosen its grip on Hormuz any time soon. This increases the chances that a new round of conflict could break out.

While the Iran conflict continues to simmer, the clock is ticking on the oil market, which is likely weeks away from the point when tightening ​supplies begin to bite in earnest. Read more in my latest column.

In other news:

• I highly recommend reading this article that offers amazing detail on how Iran is consolidating its hold in the Strait of Hormuz using a multi-tiered system for clearing vessels.

• China continued to build its massive stockpile of crude oil in April, even though imports dropped to the lowest levels in nearly four years, ROI Asia Commodities Columnist Clyde Russell wrote.

• And ROI Energy Transition Columnist Gavin Maguire notes that the share of natural gas within Texas’s power generation mix has fallen to a multi-year low so far this year as clean energy sources continue to crowd out ​fossil fuels within the top U.S. oil and gas production hub.

As ever, don’t hesitate to contact me at ron.bousso@thomsonreuters.com or follow me on LinkedIn with any questions or thoughts.

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