WHAT’S HAPPENING TODAY: Good afternoon and happy Wednesday, readers! We’ve had another glorious day in Washington, D.C., today – not too often it hits 80° in the District without heavy and thick humidity. 🔥 🌡️ Be sure to get outside if you haven’t yet!
If you missed it this morning, members of the International Energy Agency have all agreed to release a record 400 million barrels from crude oil stockpiles to stanch soaring prices. 🛢️🚢 We have yet to see how quickly these barrels will flow into the market, but have everything else that you need to know below.
Plus, today’s edition of Daily on Energy has the latest on how much energy and electricity prices rose last month before the war in Iran began. ⚡💲 Find out more 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.
IEA RELEASES 400 MILLION BARRELS: International Energy Agency member countries unanimously agreed to release 400 million barrels from strategic oil reserves to curb energy prices caused by the war in Iran.
The release is the largest ever coordinated by the agency, more than doubling the 182 million barrels it released in 2022 in response to Russia’s invasion of Ukraine.
“Oil markets are global so the response to major disruptions needs to be global too,” IEA Executive Director Fatih Birol said in a statement.
IEA member countries hold over 1.2 billion barrels of public emergency oil stocks and have another 600 million barrels of industry stocks under government control. IEA said the emergency stock would be released on timelines appropriate to each member country.
Meanwhile, Japan said it plans to release oil from its strategic reserves as early as Monday, with a plan to release 15 days’ worth of oil from private sector stockpiles and another 30 days’ worth from government reserves.
Read more by Maydeen here.
SHIPS TARGETED IN THE STRAIT: Three cargo ships were struck by projectiles off the coast of Iran this morning.
The United Kingdom Maritime Trade Operation (UKMTO) center said that one cargo vessel was hit by an unknown projectile in the Strait of Hormuz, resulting in a fire onboard and forcing crew members to evacuate.
There were two other incidents this morning, one in which a vessel was struck by a projectile about 50 nautical miles northwest of Dubai and another in which a vessel reported being hit.
According to UKMTO, since the start of the war in Iran, there have been 17 reports of incidents affecting vessels operating in and around the Arabian Gulf, Strait of Hormuz, and Gulf of Oman, with 13 reported attacks.
President Donald Trump earlier this week called out oil tankers in the Strait of Hormuz, telling them to “show some guts” and sail through the trading route.
The administration has also announced a plan to provide reinsurance for ships in the Gulf of up to $20 billion to ease oil and gas disruptions.
The U.S. International Development Finance Corporation has worked to develop the president’s plan to provide some type of war risk insurance for shippers. Today, DFC announced that Chubb, a global property and casualty insurance company will serve as lead insurance partner, issuing policies for eligible vessels.
DFC CEO Ben Black said in a statement that “we are one step closer to restoring market confidence and resuming energy and commercial trade disrupted by the conflict with Iran.”
WHERE PRICES STAND: Despite the IEA’s decision, oil prices stayed elevated throughout the day, signaling that traders are more concerned about how easily barrels can flow into global markets rather than supply levels.
The IEA’s announcement notably did not include information about the rate of the release of reserves, meaning how many barrels per day could be tapped.
As of around 2:30 p.m. EDT, Brent Crude was up by 4.89%, selling at $92.09 per barrel. West Texas Intermediate had also risen by 5.09%, and was priced at $87.65 per barrel.
The Trump administration reportedly believes it can ride out the price hikes, as long as they don’t last more than four weeks, according to a new Politico report. A source close to the White House told the outlet that the administration has three to four weeks before high oil prices become a serious political issue.
What about at the pump? Gasoline prices also continue to tick up, with the national average reaching $3.594 per gallon, the highest since May 2024, according to GasBuddy analyst Patrick De Haan. Diesel prices are staying well above the $4 line, hitting $4.81 per gallon earlier today, the highest since December 2022.
According to estimates from AAA, there is now not a single state with an average gasoline price below $3 per gallon. In case you forgot, Trump claimed in his State of the Union address just a few weeks ago that prices were below $2.30 a gallon in “most states.”
Even if oil flows were to resume and reach normal levels in the coming weeks, some analysts are warning that gasoline prices won’t hit levels seen before the war in Iran until mid-2027 – at the earliest. This week the Energy Information Administration estimated that gasoline will average $3.18 per gallon in 2027, up from its previous forecast of $2.93 per gallon.
‘THERE IS NO ENERGY INDEPENDENCE,’ CHEVRON CEO SAYS: While the president and his administration have repeatedly emphasized their commitment to achieving “energy independence,” one oil and gas executive appeared to throw cold water earlier today on whether that will ever be possible.
Chevron CEO and chairman Mike Wirth made his assessment during BlackRock’s Infrastructure Summit in D.C. earlier this morning, during a panel discussion alongside Interior Secretary Doug Burgum.
During the discussion, both Burgum and Wirth highlighted the Trump administration’s efforts to revitalize the Venezuelan oil industry, and establish safe and financially viable conditions for U.S. producers to expand and pursue new projects.
Burgum touted the administration’s energy dominance agenda, pointing out that, not only is it about achieving energy independence from other nations, it is about securing enough power to further the artificial intelligence revolution.
Wirth explained that countries like Venezuela and Canada benefit the U.S. and help the administration achieve its energy dominance goals, but shied away from saying whether the U.S. could be fully independent from other countries for energy resources.
“There is no country in the world that is energy independent,” Wirth said, noting that every country either imports or exports energy products.
“We’re a part of interconnected markets here and having the ability to trade freely, to invest across and optimize the flows of energy in all these different economies is very important,” he said.
ENERGY PRICES SURGED AHEAD OF IRAN WAR: Energy prices rose during the month of February, ahead of the U.S.-Israeli war with Iran, sending a signal that prices will surge throughout March as oil and gas markets feel the effects of supply disruptions.
The details: The Bureau of Labor Statistics released the latest update to its consumer price index on Wednesday, reporting that energy prices jumped by 0.5% for the year ending in February. Month-over-month, energy prices increased by 0.6%.
Energy services, including electricity and utility piped gas service, jumped by 4.8% and 10.9% year over year respectively. Fuel oil prices also increased by 6.2% for the year ending in February. Only commodities such as gasoline saw yearly decreases, with prices falling by 5.6%.
Month-to-month, Americans only saw some relief for electricity prices, which dropped by 0.7% compared to January. All other prices for gasoline, fuel oil, and gas services increased from the month before.
You can read more about how overall inflation held steady and where else prices rose from the Examiner’s Zach Halaschak here.
GULF LEASE SALE RESULTS: As we previewed in Daily on Energy earlier this week, the Interior Department’s Bureau of Ocean Energy Management under Trump held its second offshore lease sale in the Gulf of Mexico, which was renamed the Gulf of America last year.
Here’s what happened: The sale centered on 25 blocks covering approximately 141,000 acres in federal waters in the Gulf region. Thirteen companies submitted 38 bids for the areas, totalling more than $69 million. The agency had offered 15,000 unleased blocks. The sale ultimately generated nearly $47 million for the 25 blocks.
Some background: The Trump administration has attempted to incentivize offshore oil and gas development by lowering royalty rates for shallow and deepwater leases to 12.5% – the lowest since former President George W. Bush was in office.
Despite this, this week’s sale garnered the fewest bids since the government began holding region-wide auctions in 2017. The most recent sale, held in December, resulted in 219 bids from 30 companies.
CHEVRON AND SHELL CLOSE TO FINALIZING VENEZUELA PRODUCTION DEALS: Oil and gas majors Chevron and Shell are reportedly near finalizing the first major crude production agreements with Venezuela since the capture of former dictator Nicolas Maduro.
Five sources close to the negotiations confirmed the deals to Reuters.
The Chevron deal is reportedly focused on expanding the company’s largest oil project, Petropiar, in Venezuela’s Orinoco Belt. Under the terms, Chevron would be able to produce from the Ayacucho 9 area south of the existing project, allowing the major to increase its overall oil production and exports. If approved, the deal would make Chevron the largest private producer in the Orinoco region.
Meanwhile, Shell has already signed oil and gas contracts with the country, but the details of those remain unknown. Reuters reported that the company is seeking to produce in the Carito and Pirital fields in eastern Venezuela, allowing Shell to develop oil and natural gas assets.
ICYMI – TRUMP ANNOUNCES NEW OIL REFINERY: Late yesterday afternoon, Trump announced that the U.S. would be opening its first new oil refinery in half a century.
The details: In a post uploaded to Truth Social yesterday, Trump said the refinery would be opening in Brownsville, Texas.
“THIS IS A HISTORIC $300 BILLION DOLLAR DEAL – THE BIGGEST IN U.S. HISTORY, A MASSIVE WIN for American workers, Energy, and the GREAT people of South Texas,” he wrote.
In his post, Trump thanked Indian energy company Reliance for its “tremendous investment” related to the project.
It was not immediately clear how much the firm put into the facility, but developer America First Refining said in a press release that, in February, it received a 9-figure investment “from a global supermajor at a 10-figure valuation.”
To support the facility’s construction, America First Refining has also signed a 20-year offtake term sheet with the same company. Under the terms of the deal, the developer expects to break ground on the oil refinery in the second quarter of this year.
The company said that it planned under the agreement to buy and process roughly 1.2 billion barrels of U.S. light shale oil, producing around 50 billion gallons of refined products.
Some background: Trump has quickly claimed credit for the facility, telling reporters earlier today that “it would not have happened under a different president.”
It’s important to note, however, that this project didn’t start under the Trump administration, but appears to have begun under former President Joe Biden.
The timeline of the project can be found on America First Refining’s website, under a small press release section. There, the news releases refer to the energy developer as Element Fuels. This appears to be the company’s former name, as links to social media pages, including LinkedIn, still feature that name in some URLs.
In June 2024, Element Fuels announced it had completed site preparation and pre-construction for the project. At the time, the company expected the facility to be operational by 2027.
RUNDOWN
Politico A data center opened next door. Then came the high-pitched whine.
Associated Press Human waste backing up in basements is a gut-churning sign of US infrastructure problems
Canary Media Offshore wind farms race toward completion despite Trump’s attacks
