Global Oil Dynamics: Unintended Consequences of US-Led Sanctions
Understand how sanctions against Russia, Iran, and Venezuela have reshaped oil trade, benefiting China and complicating Western energy policies.
On Today’s Energy Shots:
Weekly Energy Industry News Recap
Global Oil Dynamics: Unintended Consequences of US-Led Sanctions
Weekly Energy News Recap:
Canadian Supreme Court Rules Against Impact Assessment Act (IAA)
On Friday, Canada’s Supreme Court ruled against the federal government’s Impact Assessment Act (IAA).
The IAA, passed by PM Trudeau’s government, granted federal authorities the power to cancel natural resource projects based on environmental impact reviews.
The Supreme Court’s ruling gives more power to provincial governments to invest in energy sector development projects, such as oil and gas projects in Alberta.
The takeaway: The SC’s ruling reduces barriers to Canadian oil and gas production.
Biden Administration Grants $7B to Hydrogen Hubs
This week, the Biden Administration announced the recipients of $7B in federal grants to develop seven regional hydrogen hubs across 16 states.
The administration has a clean hydrogen production target of 10 million metric tons by 2030 and 50 million metric tons by 2050.
The allocation of funds:
Mid-Atlantic Hub (PA, DE, NJ): $750 million
Appalachian Hub (WV, OH, PA): $925 million
California Hub: $1.2 billion
Gulf Coast Hub (TX): $1.2 billion
Heartland Hub (MN, ND, SD): $925 million
Midwest Hub (IL, IN, MI): $1 billion
Pacific Northwest Hub (WA, OR, MT): $1 billion
New York Rejects Offshore Wind PPA Adjustments:
On Thursday, the New York Public Service Commission rejected requests from offshore wind developers Orsted, Equinor, and BP to increase their contract-guaranteed energy prices.
Read here for more background on the state of offshore wind in the US.
Finland Tightens Security Around LNG Port
On Friday, Finland restricted access to parts of the Inkoo port that receives LNG imports following last Sunday’s damage to the Balticonnector pipeline.
The Balticonnector gas pipeline connects Finland and Estonia. Seismologists reported blast-like waves in the area on Sunday. Investigators have not ruled out sabotage.
When US-led Sanctions Backfire
Crude prices jumped nearly 6% on Friday, posting their highest daily percentage gains since April.
Front-month Brent rose 5.7% to $90.89/barrel, while Front-month WTI climbed 5.8% to $87.72/barrel.
Friday’s gains were dominated by the escalating situation in the Middle East, as Israel broadcasted its preparations for a ground-based invasion of the northern Gaza region.
Friday’s supply-side dynamics were amplified after Thursday’s reports of the first US sanctions imposed on tankers carrying Russian oil above the G7 price cap of $60/barrel.
Today’s Energy Shots expands on the second-order consequences of US-led sanctions on Iran, Venezuela, and Russia as the conflict in the Middle East unfolds.
Part 1 reviews the global implications of Western policymaking in a misguided echo chamber.
Part 2 highlights the forward-looking supply-side risk caused by G7/US sanctions in the context of the evolving Middle East conflict.
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