Israel, Iran Strikes Turn Eyes to Oil Markets

Current conditions: Fairbanks will “cool” to 85 degrees Fahrenheit on Monday after NOAA issued the first heat advisory in Alaska’s history over the weekend • Nashville’s total rainfall for the year is 33.25 inches, making it the city’s wettest since 1979 • It could hit 124 degrees Fahrenheit in Ar Rabiyah, Kuwait, today, potentially setting a new hottest temperature of June so far.

THE TOP FIVE

1. Israel, Iran strikes on energy infrastructure spark fears of further escalation

An Israeli strike on the Shahran oil depot in Tehran.Stringer/Getty Images

Oil analysts and investors are bracing for further escalation after Israel and Iran’s attacks on each other’s energy infrastructure this weekend. On Saturday, Iran reported that Israel had struck its natural gas processing facility near the South Pars field, as well the main fuel depot in Tehran — targets that “suggest Israel is attempting to weaken and disrupt Iran’s domestic gas and fuel supply chains to cause shortages, rather than pursuing the country’s oil and gas production or exports, which would rock the markets,” the Financial Times writes. Iran responded on Saturday by hitting an Israeli refinery and damaging pipelines north of Tel Aviv. Israel preemptively cut off the natural-gas flow from its oil fields in case those pipelines become additional targets, with Egypt and Jordan reporting they’ve already seen disruptions to their supplies as a result, The Wall Street Journal reports.

Iran has the second-largest natural gas reserves and the fourth-largest crude oil reserves in the world, and is the third-largest producer in the Organization of the Petroleum Exporting Countries. The country has also threatened to close the Strait of Hormuz, a major transit route for a third of the world’s oil, although many analysts are skeptical of such a threat, given that it would also cut off Iran’s own export route to its biggest customer, China, Bloomberg reports. While some analysts expect President Trump to call on OPEC+ to increase its production capacity if the global oil supply is disrupted, “it’s unclear whether the Organization of the Petroleum Exporting Countries could offset a severe and prolonged outage in Iran, which pumps around 3.4 million barrels a day,” Bloomberg adds. Brent crude rose 5.5% to $78.32 a barrel at the start of trading on Monday morning, after gaining 7% on Friday — the most in three years.

2. G7 will avoid talking climate change to escape Trump’s ire

The Group of Seven summit begins today in western Alberta, but in a break with precedent, climate policy will not be on the agenda. Canada, France, Italy, Japan, Germany, and Britain will reportedly take pains to avoid “riling” President Trump at the meeting in Kananaskis, The Washington Post reports, while Bloomberg notes that “other G7 leaders won’t even try for a statement of unity on matters such as Ukraine or climate change.” Since 1975, the group has “dedicated an average of 5% of its declarations to climate change at each summit,” The Global Governance Project reports, and it has made “496 climate commitments, taking 6% of the total on all subjects.” But despite the hesitancy to contradict the U.S., certain climate policies will be “integrated into the agenda, a senior government official told a briefing this week, pointing to an effort to improve the international joint response to the growing global forest fire threat,” per the BBC.

3. Republican budget bill threatens 2 million jobs: report

The Republican budget bill could potentially threaten 2 million jobs, a new report by BlueGreen Alliance found. In addition to 300,000 direct manufacturing jobs that may be lost if the GOP follows through on eliminating the corresponding tax credits, the report also found that a million indirect jobs (like “supply chain jobs, providing parts for auto or clean energy manufacturing”) and 643,000 induced jobs (like “restaurant workers, store clerks, and the other types of jobs you’d see when an area increases in population or has more money to spend”) are also at risk of evaporating, Electrek notes. Georgia alone could lose 258,000 jobs. “Every bit of data shows clearly that repealing these credits will hurt working Americans,” Ted Fertik, the vice president of manufacturing and industrial policy at BlueGreen Alliance, said in a statement. “We hope the Senate will see reason and reverse these damaging provisions.”

4. EU will not impose ban on Russian nuclear — yet

The European Commission, which is set to propose a cut-off date for the European Union’s imports of Russian gas, will not propose similar limits on the nation’s nuclear fuel, Reuters reported Monday. Russia currently supplies the bloc with 38% of its enriched uranium and 23% of its raw uranium, and five EU countries use Russian-designed reactors intended to run on Russian fuel. “The question about nuclear is, of course, complicated, because we need to be very sure that we are not putting countries in a situation where they do not have the security of supply,” EU energy commissioner Dan Jorgensen said. Though the announcement was a reversal from the Commission’s statement in June that it would target Russian enriched uranium, Jorgensen added that “we’re working as fast as we can to also make that a part of the proposal.”

5. Meta strikes geothermal deal in New Mexico

In case you missed it, late last week Meta announced a deal with XGS Energy to add 150 megawatts of geothermal electricity in New Mexico to help the company power its local expansion into artificial intelligence. XGS specifically uses a closed-loop system to prevent water from escaping as it extracts geothermal energy from the rock, which is “especially crucial in a drought-prone state like New Mexico,” The Verge writes. The goal is for the facility to be operational by 2030.

Though the deal between Meta and XGS is no larger than a separate geothermal deal the tech company struck with Sage Geosystems last year, the proposal would still “represent about 4% of total U.S. geothermal production,” Reuters reports. Meta also announced a nuclear agreement with Constellation Energy earlier this month. My colleague Matthew Zeitlin has more on the tech clean-power buying spree, which you can read about here.

THE KICKER

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