WHAT’S HAPPENING TODAY: Good afternoon and happy Friday, readers! With the busy news cycle this week, we hope you take some time this weekend to unplug – Callie and Maydeen would recommend tuning into Harry Styles’ new album released today. We have it on repeat. 🎶🕺🪩
We are continuing to watch the impact the Iran war is having on the energy market, as oil and gas prices remain on the rise. 🛢️📈💸 It looks like both the international and domestic benchmarks could near the $100 per barrel mark.
Meanwhile, the U.S. International Development Finance Corporation, along with the Treasury Department, has released a plan to provide some reinsurance to maritime trade in the Gulf. We’ve got all the details below. 🚢
Welcome to Daily on Energy, written by Washington Examiner energy 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.
QUOTE OF THE WEEK: “If you think of the Strait of Hormuz in terms of our circulatory system, it’s like shutting down the aorta. You’re going to have a heart attack,” Rystad Energy chief economist Claudio Galimberti told Callie this week. “If it goes on for too long, and probably three or four days is enough for the market, for the oil and gas market to have a heart attack. Which would mean, basically, price is going up much more than they do right now.”
OIL AND GAS PRICES CONTINUE TO SOAR: Oil and gas prices are surging for the fifth consecutive day, with international and domestic benchmarks quickly creeping up to the $100 per barrel line – a level that would shock prices at the pump.
Where prices stand: Just before 3 p.m. EST, West Texas Intermediate was up an extraordinary 12.41%, selling at $91.06 per barrel. This time last week, it was priced at around $67 per barrel. Brent Crude was also up 8.51%, and was priced at $92.68 per barrel. This is up by roughly $20 compared to last week, when Brent was around $72 per barrel.
And unfortunately for the market, there’s no immediate signs of those prices going down.
A stark warning: Earlier today, Qatar’s energy minister Saad al-Kaabi told the Financial Times that the Iran war could force all energy exporters in the Gulf region to shut down their operations within just a matter of days. The move could send oil to a whopping $150 per barrel in just two to three weeks.
“This will bring down the economies of the world,” Kaabi told the outlet. “If this war continues for a few weeks, GDP growth around the world will be impacted. Everybody’s energy price is going to go higher. There will be shortages of some products and there will be a chain reaction of factories that cannot supply.”
He warned that it would take weeks, or even months, to repair damage to Qatar’s onshore operations and return to a normal flow of exports into the global market.
Kuwait has already begun to cut its oil production as it runs out of storage space, according to the Wall Street Journal.
Strain at the pump: Oil prices at $100 per barrel or higher would send domestic gasoline prices soaring even further. Pressure brought on by the lack of flow through the Strait of Hormuz is sending gas prices to the largest weekly gains seen in years, with some cities seeing hikes of nearly $1.
Data compiled by GasBuddy found that Laredo, Texas, saw the largest weekly increase in prices of $0.72 per gallon. Cincinnati, Ohio; Fort Wayne, Indiana; and Winchester, Virginia followed closely behind with gains of $0.64 per gallon.
Energy Secretary Chris Wright attempted to alleviate concerns while speaking with Fox News this morning, insisting that price hikes at the pump are “temporary.”
As for when prices could start to come down, Wright said it is a matter of “weeks, not months.”
President Donald Trump, however, continues to dismiss high gas prices as an issue. CNN’s Dana Bash said earlier today that when she asked the president about rising prices, he reportedly told her “It’ll be short term. It’ll go way down very quickly.”
When Bash told the president that prices are already “pretty high” right now, Trump reportedly said, “No, they’re not.”
LATEST ON EUROPEAN NATURAL GAS: As the week ends, Europe faces constrained natural gas supplies and soaring prices thanks to the war in Iran.
The pause in shipments through the Strait of Hormuz and shutdown of major liquefied natural gas supplier Qatar has led prices to rise in Europe.
Today, European natural gas futures settled up 4% to €52.80 per megawatt-hour, or about $58.08. The benchmark has risen by more than 50% this week.
However, the situation could get worse for Europe, as Russian President Vladimir Putin said he is considering halting gas shipments to the region.
“Now other markets are opening up. And perhaps it would be more profitable for us to stop supplying the European market right now. To move into those markets that are opening up and establish ourselves there,” Putin told state television earlier this week.
Russia used to supply Europe with oil and gas, but since the war in Ukraine, the European Union has gradually reduced its reliance on those supplies.
Russia’s Deputy Prime Minister Alexander Novak today said he has talked with domestic energy companies about moving Russian LNG from Europe to other markets, such as India, Thailand, the Philippines, and China, Reuters reports.
Read more by Maydeen here.
$20BN MARITIME REINSURANCE PLAN FOR THE GULF REGION: The U.S. will offer reinsurance coverage of up to $20 billion in the Gulf to help stabilize the transit of oil and gas shipments.
The plan, announced by the U.S. International Development Finance Corporation along with the Treasury Department, is meant to “restore confidence in maritime trade” after oil and gas shipments had been paused in the Strait of Hormuz, a key trading route, due to the war in Iran.
As part of the plan, DFC said it would provide reinsurance on a rolling basis for vessels that meet criteria. To start, the insurance will focus on Hull & Machinery and Cargo. DFC noted that it will coordinate closely with CENTCOM on the next steps in the implementation of the plan.
DFC CEO Ben Black said, “Working alongside CENTCOM, DFC coverage will offer a level of security no other policy can provide. We are confident that our reinsurance plan will get oil, gasoline, LNG, jet fuel and fertilizer through the Strait of Hormuz and flowing again to the world.”
The announcement is part of the president’s plan to provide war risk insurance for ships traveling through the strait to address the disruptions on global energy flow caused by the war in Iran.
A ‘DRILL, BABY, DRILL’ UPDATE: As global oil markets face pressure from the Middle East, oil and gas producers in the U.S. finally saw some forward momentum in the last week as the number of active rigs rose for the first time in four weeks.
Data released by Baker Hughes this afternoon found that two rigs, located on land and offshore, were added to the total count, while one rig in inland waters was removed. This brought the net count of new rigs to plus one, increasing the number of active rigs in the U.S. to 551.
While the rig count is up, it is still 41 fewer than this time last year.
EU HITS BACK ON TRUMP NET-ZERO PRESSURE: The Trump administration in recent weeks has upped its pressure on European allies to abandon their climate change- and net-zero-related policies. While administration officials say these rules and regulations could impose barriers on trade with the U.S., one European Union official says it’s an issue on which they will just have to “agree to disagree.”
“We have our policy choice, and the U.S. has its policy choice,” EU ambassador to the U.S. Jovita Neliupšienė told Callie earlier this week. “We do believe that we have a global responsibility to make sure that we have the planet for our children and grandchildren.”
Neliupšienė explained there is pressure on EU officials to come up with the right balance on how to hit their net-zero emission targets with cleaner and affordable energy.
“I do understand that we have to be careful to make sure that whatever are our interests and aims, in this case, to make sure that businesses still keep up,” she said.
When pressed on whether she believed the EU could achieve net-zero emissions by 2050, the ambassador held a more optimistic view saying, “otherwise I would not be working for the EU.”
Callie will have more on this in an article going live this weekend, be on the lookout!
SEVERE STORMS HITS THE CENTER OF THE COUNTRY: Powerful storms hit Oklahoma yesterday, leaving at least two dead with more severe weather expected today.
According to the Weather Channel, at least three tornados were sighted or confirmed late Thursday in the Texas Panhandle, northwest of Oklahoma, and southern Kansas.
Authorities said that a mother and daughter were struck by a tornado while driving through a state highway in northern Oklahoma.
Republican Oklahoma Governor Kevin Stitt issued a statement: “Severe weather struck Major County last night and tragically claimed the lives of a mother and daughter. I am praying for the family as they grieve this tragic loss, as well as all those impacted by the storms.”
“More weather risks are expected across Oklahoma this weekend. Please stay weather aware and follow guidance from local officials to keep your family safe,” he added.
Storms are expected to intensify today, with more than 7 million people at the highest risk of severe weather, including in Missouri, Oklahoma, and Nebraska.
On X today, the National Weather Service said, “Severe thunderstorms are expected from the southern Plains to the Midwest this afternoon into tonight. Severe storm hazards may include very large hail, severe wind gusts, and tornadoes. Additionally, storms could produce heavy rain that may lead to flash flooding.”
ICYMI – PERMITTING REFORM BACK ON THE TABLE: Meanwhile, on Capitol Hill, discussions on permitting reform are back underway, as two key Democratic senators have reopened negotiations.
Quick reminder: Permitting reform talks came to a halt in December, after the Interior Department paused leases for five under-construction offshore wind farms — heightening Democratic fears that the Trump administration would not fairly implement bipartisan permitting reform once passed.
While all five projects were ultimately granted permission by federal courts to resume construction, Democratic Sens. Sheldon Whitehouse of Rhode Island and Martin Heinrich of New Mexico refused to resume negotiations until they received commitments from the White House.
What’s new: The two Democrats released a statement yesterday saying they were reopening negotiations. It comes just one week after reports revealed that the Interior Department was weighing clearing the permitting pathway for some large solar projects to move forward.
“We are hopeful that recent developments are indicative of a positive direction from the Trump administration,” the senators said, appearing to refer to movement at Interior. “As we move forward, we expect that there will be no further interference with already-permitted wind projects and that the initial movement we’ve seen on solar project permitting will accelerate, and other renewable projects will move forward as well.”
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