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LARGEST ‘ENERGY SECURITY THREAT’ IN HISTORY: International Energy Agency chief Fatih Birol is still sounding the alarm that the oil and gas disruptions caused by the closure of the Strait of Hormuz have created the “biggest energy security threat” the world has ever faced.

“As of today, we’ve lost 13 million barrels per day of oil … and there are major disruptions in vital commodities,” Birol told CNBC earlier today. 

Birol has for weeks warned that an extended closure of the strait would have devastating economic consequences across the globe. Just last week, he called the situation the “largest energy crisis” in history. 

But global supply disruptions of oil and gas could prop up alternative energy resources. 

The IEA chief told CNBC that he expected nuclear power and renewables, such as wind and solar, to grow strongly in the coming months and years as governments take every avenue to secure energy resources. It won’t all be clean, though. 

“In some countries, I expect the coal may also see a push and go back up, especially in some big countries in Asia,” Birol said. 

OIL TICKING UP ON TRUMP THREATS: Tensions between the United States and Iran escalated early this morning as President Donald Trump ordered the U.S. Navy to “shoot and kill” any Iranian boats laying naval mines in the Strait of Hormuz. 

It comes just days after the latest round of peace negotiations collapsed, leaving the markets less than certain that a permanent ceasefire deal could be reached in the coming days. 

As a result, international and domestic benchmarks for crude jumped by more than $3 today. Just after 2 p.m. EDT, Brent Crude was up by 3.46% and priced at $105.44 per barrel. West Texas Intermediate also jumped 3.94% and was priced at $96.62 per barrel.

Industry reaction: Despite its direct upward pressure on gasoline prices, high barrel prices for crude are traditionally attractive for oil and gas producers. However, given the uncertainty around how long the conflict will last – and therefore how long prices will remain high – few are jumping to increase their well counts for this year. 

Earlier today, the Federal Reserve Bank of Dallas released an update to its anonymous quarterly survey published last month, asking dozens of oil and gas firm executives how the industry will react to the nearly two-month- long war. 

Roughly 43% said they believe higher prices will increase domestic oil production by less than 250,000 barrels a day this year. For 2027, around 32% said it would increase production by more than 250,000 barrels a day but less than 500,000. 

But, given the volatility of negotiations and market reactions, many hedged on making any predictions. 

“There are way too many variables for these predictions to have real value,” one exploration and production executive said. 

“The long-term consequences of this war were not fully considered,” an oil and gas support service firm executive said. “The disruption this will cause to energy markets and other macroeconomic measures will be significant. The unpredictable nature of the current administration makes business modeling near impossible.” 

PHILLIPS 66 USES JONES ACT WAIVER: Phillips 66 is the first to utilize the Trump administration’s waiver of the Jones Act by shipping crude oil from Texas to the East Coast with a foreign tanker. 

As reported by OilPrice, Phillips 66 used a foreign-flagged tanker to load crude oil in early April at a Phillips 66 terminal in Beaumont, Texas. The Malta-flagged vessel is set to carry the cargo to an oil refinery in Pennsylvania owned by Delta Air Lines subsidiary Monroe Energy. 

Last month, Trump waived the Jones Act, a law that mandates goods shipped between U.S. ports to be carried only by American-built vessels. The move was part of an effort to ease high oil prices by lowering the cost of transportation. The waiver lasts for 60 days and will remain in place through mid-May. 

There’s been no other shipment of crude between the Gulf Coast and the Atlantic Coast on foreign vessels. 

WHY REPUBLICANS PUSHED BACK ON ENDANGERED SPECIES ACT AMENDMENTS: Yesterday afternoon, House leadership suddenly pulled a bill from the floor that would overhaul the Endangered Species Act, with little explanation as to why. New reporting from E&E News offers some more insight. 

House Speaker Mike Johnson reportedly said last night that he pulled the legislation from consideration at the behest of a “few subsets of members,” some of whom represented Florida. 

“I’m trying to get a better understanding of that,” Johnson said. “You can go to any of the Floridians, and they’ll tell you they have a lot of issues down there with some of the endangered species, and they just had concerns that we weren’t aware of in advance.”

The concerns: At least six House members from Florida and other states reportedly raised concerns that the legislation as written could open protected coastal waters to oil and gas drilling. 

Specifically, the text would expand the use of the Endangered Species Committee, also known as the “God Squad,” which has the authority to lift rules meant to prevent animals or plants from going extinct. Some Republicans, including Florida Rep. Kat Cammack, are worried that the bill would allow officials to waive ESA protections to prioritize projects like oil and gas drilling. 

“What we’re concerned about is opening up any potential avenues for drilling in the Gulf,” Cammack said, according to E&E News. “We have very sensitive ecosystems that we want to protect and ecotourism is a huge part of our state’s economy, and so there’s real concerns that we want to see addressed.”

Other Republicans who opposed the ESA amendments act reportedly include New York Rep. Andrew Garbarino, Pennsylvania Rep. Brian Fitzpatrick, and Florida Reps. Anna Paulina Luna and Maria Elvira Salazar. 

You can read more specifics on the bill here. 

CONSTRUCTION BEGINS ON FIRST UTILITY-SCALE ADVANCED NUCLEAR POWER PLANT: A Bill Gates-backed nuclear energy company has begun construction on what it says will be the first utility-scale advanced nuclear power plant in the U.S. 

The details: Today marked the first day of construction for TerraPower’s flagship Natrium plant’s Kemmerer Unit 1 reactor. The milestone comes just weeks after federal regulators with the Nuclear Regulatory Commission gave the company approval to move forward. It marked the first time the NRC had issued a construction permit for a commercial-scale advanced nuclear reactor. 

Rather than using water as a coolant, like traditional nuclear power plants, TerraPower’s 345-megawatt design uses molten salt to cool its reactor. Its design also features storage technology that can boost the system’s output to 500 megawatts as needed. 

Project developers expect that, once the facility is operational, storage technology will boost its output to 500 megawatts of power as needed, roughly equivalent to the amount of energy needed to power around 400,000 homes. 

The project, which is being built in Wyoming, is expected to be completed and come online in 2030. It is just one of several reactors TerraPower is working on, as the company has agreed to build up to eight of its Natrium plants for Meta by 2035.  

EU FALLING SHORT ON REFILLING GAS STORAGE: The European Union’s energy regulatory agency warned that countries may not reach the 90% gas storage levels before next winter. 

Reuters reports that the EU’s energy regulatory agency said that countries should reach a lower level, 80%, which is allowed during challenging market conditions. However, the agency said that this level “will likely come at a premium cost” and remain vulnerable to supply disruptions. 

The agency said the EU would need to increase its liquefied natural gas imports by 13% compared with 2025 to reach 90% gas storage levels. The EU has been struggling to refill its stores of natural gas since the war in Iran started. 

The Financial Times reported earlier this week that according to data, gas storage is currently around 30% across the EU. Germany, the largest gas consumer in Europe, is at 23.5%, while the Netherlands stands at just 7.4%. 

USTR ASKS ALLIES TO PAY MORE FOR CRITICAL MINERALS: U.S. Trade Representative Jamieson Greer has asked allies to pay more for critical minerals sourced outside of China, the Financial Times reported. 

Greer said that U.S. allies could pay a “national security premium” for minerals sourced from a proposed group of trading partners, including those in Europe. The U.S. has proposed that the group of countries would trade minerals at set prices. It could also impose tariffs or restrictions on outside producers like China. 

The Financial Times said the proposal has some worried it could raise costs for businesses and ignite trade retaliation from China. The publication said that Greer blamed Western countries’ fixation on business costs for its reliance on Chinese minerals.

“When trading partners express concerns about the economic cost of price floors or mechanisms, I just say: what you’re talking about, which is cost efficiency, this is why we are in the situation we’re in,” Greer told the FT. 

“There is a premium we pay, and I call it the national security premium, and we will all pay a national security premium to have a secure supply chain,” he added, describing his message to allies. 

ICYMI – TEXAS LNG FACILITY BEGINS EXPORTS: ExxonMobil and QatarEnergy’s joint venture along the Texas Gulf Coast has officially begun exporting liquefied natural gas. 

Golden Pass LNG, the 10th LNG terminal in the U.S., shipped its first cargo from the facility’s Train 1 yesterday. 

The cargo was boarded on a vessel called Al Qa’iyyahal, according to shipping data reviewed by Reuters, although it was not immediately clear where the ship was headed. Previous reporting speculated that the first shipment would be taken to Italy. 

Project developers are still constructing the facility’s second and third LNG trains, which are expected to come online after a “stable operation” of Train 1, Golden Pass LNG said in a statement. 

Once fully operational, the facility is expected to export roughly 18 million tons of LNG annually. Golden Pass is currently the only new facility expected to begin LNG shipments this year, according to the Energy Information Administration.    

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