Trump’s Iran War Could Send Oil Prices Past $100 a Barrel

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THE TOP FIVE

1. Trump’s Iran war could send oil prices past $100 per barrel

Smoke billows from a missile strike in Tehran. Fatemeh Bahrami/Anadolu via Getty Images

The aerial assault the United States and Israel launched on Iran this past weekend is already sending oil prices upward. By Sunday evening, the price for West Texas Intermediate crude, the benchmark for the oil drilled in the U.S., had risen 2.78% to just over $67 per barrel. Brent crude, the benchmark typically used to measure Europe’s production, 2.87% to nearly $73 per barrel. Murban crude, the benchmark set out of Abu Dhabi, surged by more than 4% to north of $74. By rendering the Strait of Hormuz — the waterway between the United Arab Emirates and Iran through which 15% of global oil flows and which tapers to just 20 miles wide at its narrowest point — impassable, the conflict could send prices per barrel as high as $100 or more, the consultancy Wood Mackenzie warned Sunday night. “The key question is when do vessels re-establish export flows,” Alan Gelder, Wood Mackenzie’s senior vice president of refining, chemicals and oil markets, said in a statement. “No doubt, tanker rates and insurance will increase dramatically, but these costs would only be a small part of the oil price impact associated with a curtailment of oil flows if they last for more than a few days.”

The rise in prices began weeks ago as the biggest U.S. troop buildup in the Middle East since 2003 seemed to presage war. The market isn’t just reflecting a fear of an unpredictable and prolonged halt to tanker traffic through the Strait. Insurers are threatening to cancel policies on vessels that dare to pass the waterway right now, the Financial Times reported. Iranian attacks on buildings and infrastructure belonging to America’s Arab allies across the Persian Gulf suggests the rest of the region’s oil production could face damage. “Right next door, you’ve got Iraq, you’ve got Saudi Arabia, and you’ve got the Emirates and others who collectively are more like 20 million barrels per day. And that is obviously a much bigger deal,” Rory Johnston, petroleum analyst and author of Commodity Context, told Heatmap’s Matthew Zeitlin.

2. Greenpeace USA ordered to pay crippling damages over pipeline protest

A North Dakota judge finalized a $345 million judgement against Greenpeace USA on Friday, ordering the American chapter of the famed activist group to pay out the damages from its protests against the construction of the Dakota Access Pipeline. The ruling came after judge James Gion decided in October to slash almost half the $667 million that a jury awarded developer Energy Transfer Partners a year ago. The Dallas-based company called the ruling an “important step in this legal process of holding Greenpeace accountable for its unlawful and damaging actions against us.” In its own statement, Greenpeace said, “this is not the end of the case — or Greenpeace USA.” Rather, the group said it will request a new trial and, if necessary, “appeal the decision to the North Dakota Supreme Court.” The organization, which has since its founding in 1971 embarked on audacious acts of protest to raise awareness about environmental destruction, cast its fight against the ruling as a battle to protect Americans’ First Amendment rights. “In the years since the Standing Rock protests, anti-protest laws have spread across the U.S. and the world. Two of the most important components of change and progress throughout human history — free speech and peaceful protest – have never been more endangered,” Greenpeace said in the statement. “We must defend those rights. Our future depends on it.”

3. U.N. seabed authority chief promises to legalize deep-sea mining this year

Last year, the International Seabed Authority, a little known United Nations agency based in Jamaica, debated how to establish rules for giving private companies permits to collect mineral-rich nodules off the deep ocean floor in waters far from any country’s maritime borders. Under outside pressure from the U.S., which is not a signatory to the ISA and has vowed under the Trump administration to go it alone on deep-sea mining, countries failed to reach an agreement. When the body reconvenes this week in the capital city of Kingston, the head of the ISA is determined to finalize a plan. In an interview with The New York Times, ISA chief Leticia Caravalho promised to broker a deal this year, lest an area in international waters become what she called the Wild West. “The world agreed 30 years ago that this is an area that belongs to all of us, and we should go there collectively,” she said. Banning mining outright, as some countries (and groups such as Greenpeace) have called for, would only take money away from scientific research and delay setting strict environmental protections, she said. “Being able to make the rules before activity starts is unique in human history,” she said.

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4. America’s biggest green hydrogen plant nears completion

The 220-megawatt ACES Delta green hydrogen project in Utah is by far the largest in the U.S. Now it’s ready to launch. As of last week, all 40 of the electrolyzers at the facility were installed and fully operational, supplier HydrogenPro told the trade publication Hydrogen Insight. It’s a critical milestone for a sector facing mounting challenges as the federal tax credit known as 45V begins its earlier phase out next year and the Trump administration yanks funding for the two regional hubs meant to hasten deployment of green hydrogen technology. Not every project is panning out as well. In New York, the developer Plug Power announced plans to abandon a 120-megawatt plant and sell the land to a data center company.

There’s a lot going on in hydrogen, including entirely new colors added to the rainbow scheme that describes how the fuel is made. If you want a quick 101 guide, this episode of Heatmap's Shift Key podcast is a good place to start.

5. Yet another European country looks to buy one of GE-Hitachi’s SMRs

At this stage in the new nuclear race, the company that looks likely to deploy the first small modular reactor in North America is GE Vernova Hitachi Nuclear Energy, the U.S.-Japanese joint venture building its debut BWRX-300 at the Darlington nuclear plant in Ontario, Canada. The developer is set to build another one of the third-generation, 300-megawatt reactors at the Tennessee Valley Authority soon after, and, as I reported for Heatmap, received major funding from the Department of Energy last year to pull it off. Until now, five European countries have been considering buying their own BWRX-300s: Czechia, Estonia, Finland, Poland, and Sweden. Now add a sixth. Lithuania just signed onto a memorandum of understanding in Washington promising to assess the potential to deploy the reactor, according to World Nuclear News.

THE KICKER

There is a bright spot for clean energy in the Middle East. In Iraq, the first 250-megawatt section of what’s designed to be a 1-gigawatt solar farm is expected to enter operation in the next few days after the facility’s transmission connection powered on for the first time. Located in the Basra region, site of some of the bloodiest battles of the Iraq war, the project is a joint venture between the French giant TotalEnergies, which has a 45% stake; the Basrah Oil Company, which commands 30% of the solar farm; and QatarEnergy, with 25%, according to Renewables Now.