WHAT’S HAPPENING TODAY: Good afternoon and happy Tuesday, readers! There may be a light at the end of the tunnel for the energy markets, as President Donald Trump has unveiled his plan to resume the flow of oil and gas through the Strait of Hormuz. 🚢🛢️ Crude oil and gas prices began to stabilize in the minutes after his announcement.
Today’s edition of Daily on Energy has everything you need to know on where oil, gasoline, and natural gas prices stand, and we’ll continue to follow those numbers throughout the week. 📈💲
Plus, in case you missed it in the flurry of Iran news yesterday, keep on reading for the latest update on the Potomac River wastewater spill – there’s some good news for D.C.-based fishermen. 🎣
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.
TRUMP UNVEILS PLAN TO HANDLE SOARING OIL: Tankers unable to transport oil and gas through the Strait of Hormuz in the aftermath of Operation Epic Fury are now poised to receive help from the U.S. government.
The details: President Donald Trump unveiled a plan this afternoon to resume flows of oil and gas through the crucial waterway, in an effort to stanch the surge in energy prices seen so far this week. Trump said the U.S. will be offering financial and logistical help, including U.S. Navy escorts, to shippers navigating the waters around Iran.
“Effective IMMEDIATELY, I have ordered the United States Development Finance Corporation (DFC) to provide, at a very reasonable price, political risk insurance and guarantees for the Financial Security of ALL Maritime Trade, especially Energy, traveling through the Gulf,” Trump wrote in a post to Truth Social, minutes after meeting with Energy Secretary Chris Wright and Treasury Secretary Scott Bessent.
Read more from Callie here.
What’s not included: It’s worth noting that utilizing the government’s massive reserves of oil was not part of the announcement from Trump. Tapping the Strategic Petroleum Reserve, which holds around 415 million barrels, and releasing more crude into the market could help temporarily prevent prices from rising much further.
It would, though, go directly against the administration’s promise to refill the reserves, as Trump has repeatedly criticized the Biden administration for letting levels fall so low in the aftermath of Russia’s invasion of Ukraine.
Where prices are now: Global oil markets were on track to see the largest daily gain in years yesterday, rising by around 6%. Those gains extended today, with domestic and international benchmarks jumping by nearly 8% before midday.
The price hikes slowed dramatically following Trump’s announcement, dropping to increases of just 2-3%. Just before 3:30 p.m. EST, West Texas Intermediate was up by just 2.93%, selling at $73.32 per barrel, while Brent crude was up 3.29% and priced at $80.30 per barrel.
GAS ON THE UP: High oil prices are complicating Trump’s campaign promise to keep prices at the pump down, as crude oil is the largest component of the retail price of gasoline.
Yesterday, gas prices saw a significant hike of around $0.12 per gallon, the largest daily increase seen since early March 2022, during the immediate aftermath of Russia’s invasion of Ukraine. This brought the national average to $3.109 per gallon, marking the fourth largest single-day increase in gas prices since 2005, according to data released by GasBuddy.
While there are fears that a prolonged closure of the Strait of Hormuz would send oil and gas prices soaring, price hikes at the pump shouldn’t be too dramatic. GasBuddy analyst Patrick De Haan said this morning that he does not foresee the national average of gasoline hitting $4 per gallon anytime soon, estimating that gas will climb to around $3.30-$3.35 per gallon.
NATURAL GAS SOARS: Natural gas prices jumped another 30% in Europe as a result of the pause in LNG production in Qatar.
European natural gas futures settled up 20% at about €53.60 per megawatt, or around $63. European LNG futures were up over 50% yesterday after Qatar’s state-owned energy giant QatarEnergy announced it would stop its LNG production.
Many countries rely on LNG from Qatar, which sent more than 70% of its LNG exports to Asia and 25% to Europe in 2022.
The lack of LNG production comes as the European winter is still in full swing. Bloomberg reported earlier this year that Europe is also withdrawing natural gas at the fastest pace in five years.
GLOBAL LITHIUM DEMAND TO EXCEED 13 MILLION TONNES BY 2050: The global demand for lithium is expected to grow as the world transitions toward electrification.
Global demand for lithium could top 13 million tonnes by 2050 under an accelerated energy transition, more than double Wood Mackenzie’s base-case projection. It warned that, without significant new investment, substantial shortfalls could appear as early as 2028.
Under the group’s base case scenario, current supply projects are unlikely to meet demand beyond the mid-2030s.
Allan Pedersen, a research director at Wood Mackenzie, said, “The lithium market is heading into a supply crunch much sooner than many industry players expect.”
“The industry needs to act now should governments progress policies towards Net Zero. Projects approved today will determine market balance in the critical 2030s,” he said.
Electric vehicles remain the primary driver of lithium demand growth, Wood Mackenzie said, accounting for 72-80% of lithium consumption.
The group added that total investment required to meet demand under a net zero scenario would be around $276 billion.
GOP SENATOR RIPS IN NOEM OVER FEMA SPENDING: Republican North Carolina Sen. Thom Tillis lambasted Homeland Security Secretary Kristi Noem this morning, accusing her of breaking federal law by holding up disaster aid from the Federal Emergency Management Agency.
“You failed at FEMA,” Tillis said to Noem during a Senate Judiciary Committee hearing. He criticized her policy of personally signing off on large FEMA expenditures, claiming it was delaying hurricane relief aid for North Carolina residents.
“People are hurting in western North Carolina from the most significant storm they’ve ever experienced,” he said, referring to the 2024 Hurricane Helene.
The Republican pointed to the Homeland Security Act of 2002, which prohibits the secretary of Homeland Security from restricting or diverting FEMA resources from the agency’s mission.
“I have reason to believe you’re violating the law, either knowingly or unknowingly,” Tillis added.
Quick reminder: In an effort to cut spending last summer, Noem implemented a sweeping rule requiring any contract or grant worth $100,000 to be approved with her personal signoff before funds can be released. The rule has been criticized by both Democrats and Republicans as it delayed the major projects related to hurricane response and even border wall construction.
JUDGE REJECTS TRUMP BID TO END NEW YORK’S CONGESTION PRICING: A federal judge has ruled against the Transportation Department effort to end New York’s congestion pricing program.
U.S. District Judge Lewis Jeffrey Liman today ruled against the administration, stating that DOT’s efforts to cancel the program were unlawful.
DOT last February attempted to cancel federal approval of New York’s congestion pricing program, arguing that it left drivers without toll-free highways.
The administration’s efforts were quickly met with a lawsuit brought by the Metropolitan Transportation Authority and the New York Transportation Department, along with other plaintiffs.
“The judge’s decision is clear: Donald Trump’s unlawful attempts to trample on the self-governance of his home state have failed spectacularly. Congestion pricing is legal, it works, and it is here to stay,” Democratic New York Gov. Kathy Hochul said.
New York’s congestion pricing program is the first of its kind in the country. The program, which started in January 2025, charges passenger vehicles $9 to drive during peak hours in the congestion pricing zone to help reduce vehicle congestion and pollution.
ICYMI – POTOMAC RIVER SEWAGE SPILL UPDATE: Yesterday, the Washington, D.C., health department lifted its recreational advisory for the Potomac River, allowing residents to engage in some activities in the river, which was contaminated with millions of gallons of raw sewage in January.
What is allowed: Dr. Ayanna Bennett, director of the D.C. health department, revealed the decision came after a careful review of the last three weeks of water quality data. The existing advisory only applies to waters within the District of Columbia. Officials are still encouraging residents located outside those boundaries to follow guidance from neighboring jurisdictions.
Recreational activities such as fishing are now permitted, as the river’s bacterial levels are within safe limits. However, swimming is prohibited without a special permit.
Quick reminder: The sewage spill began when the Potomac Interceptor sewer line in Maryland collapsed on Jan. 19, releasing more than 240 million gallons of untreated sewage into the Potomac River. As a result, E. coli levels were dangerously high for human contact. Drinking water was not affected in the incident.
Read more from the Examiner’s David Zimmerman here.
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