WHAT’S HAPPENING TODAY: Good afternoon and happy Thursday, readers! Snow is steadily falling outside the Washington Examiner’s office as Callie and Maydeen write today’s edition of Daily on Energy. You read that right – snowfall, one day after it was the temperature was in the mid-eighties.
Speaking of unusual weather, a number of severe storms swept across the nation this week, with tornadoes, thunderstorms and large hail reported in the Plains, Appalachians, and the Gulf Coast. 🌪️🌩️☔
Today’s newsletter also brings you the latest news on the war in Iran, which the International Energy Agency says has caused the largest oil supply disruption in history. The Trump administration is upping its efforts to stabilize the markets as prices surge, now saying that naval escorts may be ready by April, and even eyeing waiving the Jones Act. 🛢️📈🚢 We have everything below.
Welcome to Daily on Energy, written by Washington Examinerenergy and environment writers Callie Patteson (@CalliePatteson) and Maydeen Merino (@MaydeenMerino). Email cpatteson@washingtonexaminer dot com or mmerino@washingtonexaminer dot com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
LARGEST OIL SUPPLY DISRUPTION IN HISTORY: The International Energy Agency is now saying that the war in Iran has created the “largest supply disruption” in the history of global oil markets.
The details: The stark assessment came in the Paris-based agency’s monthly oil report this morning, in which it slashed its forecast for oil supply growth by more than 1 million barrels per day.
The IEA expects the war in Iran to cause global oil supply to plummet by 8 million barrels per day in March, as Western nations and their allies are moving to release a record level of oil reserves to curtail the Middle Eastern disruptions.
Overall, the agency found that the Gulf countries have cut oil production by roughly 10 million barrels per day, and have also slashed more than 3 million barrels per day of refining capacity.
“The war in the Middle East is creating the largest supply disruption in the history of the global oil market,” the agency said.
A band-aid solution: The monthly report comes just one day after member states agreed to jointly release a record 400 million barrels from stockpiles. The United States alone will be releasing 172 million barrels.
If there is no sign of de-escalation, the IEA has said, the joint release is just a “stop-gap measure.”
Read more from Callie here.
PRICE WATCH: Oil markets have not reacted significantly to the IEA’s decision to jointly release millions of barrels, with international and domestic benchmarks continuing to tick up to the $100 line.
Prices surged back to $100 per barrel earlier today as three more foreign vessels were struck in the Persian Gulf overnight. But prices did start to settle later in the day. Right around 2 pm EDT, West Texas Intermediate jumped by 8.8%, selling at $94.93 per barrel. Brent crude also increased by 8.18%, and was priced at $99.50 per barrel.
With no sign of de-escalation on the horizon, Iranian officials have warned that prices could soar as high as $200 a barrel.
“Get ready for oil to be $200 a barrel, because the oil price depends on regional security, which you have destabilised,” Ebrahim Zolfaqari, spokesperson for Iran’s military command, said earlier in the week, according to Reuters.
President Donald Trump, who has for the last two weeks attempted to downplay concerns regarding the high prices, attempted to spin the price hikes as a win for the U.S. today.
“The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money,” he said.
Prices at the pump: There doesn’t appear to be any light at the end of the tunnel for drivers concerned about surging gasoline prices, particularly for those needing diesel.
GasBuddy analyst Patrick De Haan warned today that, in his view, it’s no longer a question as to whether diesel prices will hit above $5 per gallon, but when. He estimated that diesel prices will hit the $5 threshold sometime in the next few days, as average prices sit around $4.83 per gallon now.
Regular gasoline prices also continue to soar, with the national average sitting at $3.598 per gallon, according to AAA.
The largest weekly gas price jumps recorded by GasBuddy have primarily been in the Western United States, with California seeing the largest hike of $0.53. Utah and Nevada closely followed with jumps of more than $0.48.
CHRIS WRIGHT ON NAVY ESCORTS OF SHIPS IN THE STRAIT: Energy Secretary Chris Wright told CNBC today that the Navy could be in a position by the end of the month to escort tankers through the Strait of Hormuz.
“It’ll happen relatively soon, but it can’t happen now,” Wright told CNBC in response to a question about the Navy helping tankers navigate the strait.
“We’re simply not ready. All of our military assets right now are focused on destroying Iran’s offensive capabilities and the manufacturing industry that supplies their offensive capabilities,” Wright said.
There have been reports this week of ships being struck by projectiles in the strait.
Waiving the Jones Act: The administration is considering waiving the Jones Act, which requires goods shipped between U.S. ports to be carried by ships that are U.S.-built, flagged, and crewed.
“In the interest of national defense, the White House is considering waiving the Jones Act for a limited period of time to ensure vital energy products and agriculture necessities are flowing freely to U.S. ports. This action has not been finalized,” White House press secretary Karoline Leavitt told the Washington Examiner in a statement.
Bloomberg reported that the administration plans to issue 30-day waivers for the Jones Act, allowing for foreign vessels to help supply refiners on the East Coast with fuel from the Gulf Coast and throughout the country.
Read more by Maydeen here.
TRUMP SUES CALIFORNIA OVER EV ‘MANDATE’: The Trump administration is suing California over what the government has described as an electric vehicle mandate, claiming the state is violating federal law.
The details: The lawsuit was filed by the Department of Justice on behalf of the National Highway Traffic Safety Administration earlier today. The government is arguing that the Golden State is breaking the law by imposing state-specific requirements on vehicle manufacturers.
The lawsuit points to the Energy Policy and Conservation Act, which bars individual states from adopting regulations related to fuel economy.
California has imposed several fuel economy standards through its Advanced Clean Cars proposals, which date back more than a decade. The most updated regulations require 100% of new passenger vehicles to meet zero-emission standards by the 2035 model year.
The Trump administration is claiming that the standards would force automakers nationwide to “radically revamp their production lines nationwide” in order to sell vehicles in the state.
“California is using unlawful policies from the last administration to create exorbitant costs for our citizens — this Department of Justice is proud to stand with President Trump and Secretary Duffy to bring litigation that will make life more affordable for American consumers,” Attorney General Pam Bondi said.
HONDA TAKES $15.7BN LOSS FROM EV SHIFT: Honda expects up to $15.7 billion in expenses and losses as part of its restructuring of its electric vehicles strategy.
As part of the company’s reassessment of its electrification strategy, Honda said today it would cancel the development and market launch of three EV models that had been planned for production in North America.
Honda’s financial loss aligns with those of many other auto companies, such as General Motors, Stellantis, and Ford, which are restructuring their plans to shift away from EV expansion due to the change in policies.
The Trump administration year has weakened and rolled back policies and incentives aimed at accelerating the transition from gasoline to electric vehicles.
EXTREME WEATHER ALERT: There have been several extreme weather events across the country this week, ranging from the Plains to the Appalachians and the Gulf Coast.
AccuWeather said that on Tuesday there were several severe thunderstorms in the Plains and Midwest with large hail, strong winds, and tornadoes. There were at least two fatalities in connection to a tornado that hit Illinois.
The severe weather has moved toward the eastern part of the country, with reports of strong gusts of wind hitting Texas, Alabama, Ohio, and New Jersey.
Thunderstorms will continue to move east into today, bringing strong winds, hail, and torrential downpours across the Southeast.
Meanwhile, if you are in the Washington, D.C., area, you may have noticed that we are dealing with some weather whiplash as we are getting some snow today, following yesterday, when temperatures were around 85 degrees Fahrenheit.
If you want you to see some of the impacts of the severe weather, check out a video here, which shows a solar panel farm destroyed by a tornado that hit Indiana.
GERMAN UTILITY TO INVEST $20B IN US: Germany-headquartered RWE is planning to invest roughly $20 billion in renewable energy and natural gas resources in the U.S., as demand from data centers soars.
The details: Earlier today, the international energy utility announced that it would be increasing its U.S.-based investment by roughly €17 billion – around $19.66 billion – over the next five years.
This will allow RWE to expand its installed energy capacity in the U.S. from 13 gigawatts to around 22 gigawatts by 2031, drawing on wind power, solar power, battery storage facilities, and natural gas. The investments in the U.S. account for nearly half of the entire €35 billion that RWE plans to spend worldwide during the next five years.
Our take: The increased investment in energy technologies in the U.S. comes at a crucial time, as power demand soars. Building out more renewables and flexible gas-fired plants that can be used to their full potential at short notice could result in some major returns for RWE as data center developers look to secure their own power for their artificial intelligence advancements.
Demand from data centers is expected to surge dramatically in the next decade, with BloombergNEF estimating that data centers will consume more than 100 gigawatts by 2035. By comparison, data center demand in 2024 was estimated to be around 34.7 gigawatts.
ICYMI – U.S. TO RELEASE OIL STOCKPILES: The Trump administration announced late yesterday that it would be releasing 172 million barrels of oil from the Strategic Petroleum Reserve, as part of the IEA’s joint release of 400 million barrels of oil and refined products.
Energy Secretary Chris Wright confirmed the release, saying it would begin next week. The full release of the reserves is expected to take around 120 days to deliver to the market.
Wright did not offer details on the rate of the release of the reserves, meaning how many barrels per day will be tapped. Energy analysts, however, have pointed out that it will likely equate to a flow of around 1.4 million barrels per day.
This is a similar drawdown to that seen under former President Joe Biden – which has been heavily criticized by Trump and his allies – when around 180 million barrels were released from the reserves. This resulted in the release of 1 million barrels per day for 180 days.
RUNDOWN
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