Photo by Zbynek Burival on Unsplash The oil market continues to be on edge as the market is worried about the timing and the fall-out of Israel’s expected ground offensive into Gaza in response to the Hamas terror attack. The New York Post reports that, “The US is now reportedly pressuring Israel to hold off any ground invasion pending further Qatar-led negotiations.” The hope is that these negotiations can get more hostages released and Israel can find a way to reach its military objectives while minimizing as much as possible the impact on the civilian population. Israel is warning that people should leave the area as the offensive is being delayed. It is still coming.Obviously, there’s international pressure on Israel to try to run this operation in such a way that it won’t cause the entire world to erupt into war. The risk of the war spreading yes is very high and for Israel, it appears time could be on their side. The AP is reporting that, “The United States warned Iran or its allies against any “escalation” in the wake of Israel’s war with Hamas, two top US officials said Sunday, hours after the Pentagon moved to step up military readiness in the region. With tensions mounting, Washington also announced Sunday it had ordered non-emergency staff to leave its embassy in Iraq. “We are concerned at the possibility of Iranian proxies escalating their attacks against our own personnel, our own people,” Secretary of State Antony Blinken said on CBS News. “We expect there is a likelihood of escalation.” “No one should take advantage of this moment to escalate to further attacks on Israel or, for that matter, attacks on us on our personnel.” Blinken said the United States, which has sent two carrier groups to the eastern Mediterranean, was “taking every measure to make sure that we can defend them. And if necessary, respond decisively.”Obviously, these tensions and the risk to global oil supply continue to be high at a time when global inventories are extremely low. Vortexa has reported that crude oil that sits in floating storage is at the lowest level in 4 years clocking in at 63.5 million barrels. This comes after Saudi Aramco’s CEO said that his company has a spare oil production capacity of 3 million barrels per day. If that is true, then that means that global spare capacity is about 1.5 million barrels a day than we thought we had but still not enough to offset a potential loss of Iranian oil. The pressure is on to shut down Iran’s oil exports as they are the world’s most notorious state sponsor of terror.Whenever I talk to people and debate them about the energy transition, they always point out to me how the energy transition is doing great in places like the Netherlands. Well S&P Global seems to throw some cold water on that argument. They report that the Dutch government acts as a power network near peak overload. They are warning that electrification is ‘too fast for grids’ Jetten sets out a program of support. “Households are installing solar panels, heat pumps, and electric vehicle charge points while companies are switching away from gas, with grid operators noting an explosion in demand for space on the network across the Netherlands. Electricity grids cannot keep up with this pace of energy transition, despite significant investments by network operators of more than Eur5 billion this year,” Jetten said.While annual network investment was due to reach Eur8.00 billion ($8.47 billion) from 2025, this was still not enough to accommodate all growth, Jetten said.  The government would act to secure land for grid expansions while streamlining permit procedures, “for example, by designating certain network extensions as of important social interest, in order to potentially shorten the licensing procedure by 1.5 years,” the minister said.Oil mergers are hot. The Wall Street Journal reports that, “Chevron CVX  said it would buy Hess; in an all-stock deal worth $53 billion, in the latest sign of consolidation in an oil-and-gas industry flush with cash.The U.S. energy giant said buying Hess would upgrade and diversify its portfolio, adding a large oil asset in Guyana and bolstering its U.S. shale operations. Chevron also highlighted the attraction of Hess’s assets in the Gulf of Mexico and its natural-gas business in Southeast Asia. The deal values Hess at $171 a share based on Chevron’s closing price on Friday, with Hess shareholders receiving 1.0250 shares of Chevron for each Hess share. The price represents a premium of 10.3% on a 20-day average based on Friday’s closing prices. Including debt, the transaction has a total enterprise value of $60 billion. The deal comes at a time when oil-and-gas companies are flush with cash after energy prices rocketed in the wake of Russia’s invasion of Ukraine.For oil and products, we have to pray for the best but prepare for the worst. Volatility is going to continue to be high based on evolving events. There is still significant risk to the upside.Natural gas futures are pulling back as seasonal pressure is leading us down. Start to bargain hunt for those winter call options as the market retests the lower Bollinger bands.More By This Author:The Energy Report: Hope And PrayerThe Energy Report: Defensive CongestionThe Energy Report: Escalation Fears Mount/Embargo On Table