Thursday, May 28, 2026

Europe’s Arctic Oil Dilemma Deepens as Supply Fears Grow

A dozen financial institutions from Scandinavia have urged the European Commission to remain firm in its opposition to Arctic oil drilling even as the bloc faces physical oil shortages in weeks, according to energy experts.

“The Arctic is one of the planet's most vulnerable ecosystems and home to unique wildlife .... Further oil and gas expansion would add pressure to these globally significant ecosystems, by increasing the risk of oil spills and leakages,” the lenders said in a letter organized by the Nordic Center for Sustainable Finance and sent to the Commission today.

The letter features more than 130 signatories from the financial and energy industries, trade unions, and individuals, including Germany’s former economy minister, now senior Arctic analyst at a Danish research facility.

“Further oil and gas expansion would add pressure to these globally significant ecosystems by increasing the risk of oil spills and leakages, which could cause irreversible environmental damage, while increased shipping, noise, and physical disturbance would further intensify the environmental stress on the region,” the letter also said.

The European Union has increased its imports of U.S. crude oil significantly lately to replace lost Middle Eastern supply, but, as Carlyle Group’s Jeff Currie recently warned, the U.S. oil, coming from inventories, will run out sooner rather than later, leaving the EU scrambling for supply. The EU has banned imports of Russian crude.

Norway, which is not a member of the EU, is campaigning for a change in attitude about Arctic oil drilling as it faces a decline in oil production due to natural depletion at its North Sea fields. The Nordic country is the biggest local supplier of the EU with oil and gas, as the UK decimates its oil and gas industry in favor of a transition to alternative energy and electrification.

By Irina Slav for Oilprice.com

 

Mozambique Contests TotalEnergies' $2 Billion Cost from LNG Project Delay

The government of Mozambique disagrees with TotalEnergies’ estimate that the years-long delay in the Mozambique LNG project has cost it and its partners $2 billion in overruns, a source familiar with the matter told Bloomberg on Wednesday.

TotalEnergies and its partners in the $20-billion Mozambique LNG project had to suspend work and declare force majeure for several years amid serious concerns about security due to Islamist attacks near the site.

A recent audit report by UK-based consultancy Bayphase could not confirm the costs TotalEnergies claims to have incurred due to the delay. So Mozambique is not inclined to accept the $2-billion cost overrun estimate, according to Bloomberg’s anonymous source.

Mozambique has yet to approve an updated development plan for the massive LNG export project, which could transform the economy of one of Africa’s poorest countries and increase supply to the global LNG market in the medium to long term.

However, in order to approve the updated plan, Mozambique and the project developers need to be on the same page about costs. The government and the French supermajor continue discussions on the costs and the plan and they could still reach an agreement on how to proceed, Bloomberg’s source said.

After a five-year hiatus, in January 2026 TotalEnergies formally re-launched the Mozambique LNG project.

At the end of last year, TotalEnergies lifted the four-year-long force majeure on the Mozambique LNG project, which was stalled due to the precarious security situation near the site of the planned export facility. The project site is close to the town of Palma in the Cabo Delgado province, where Islamic State-affiliated militants were active for years.

In the spring of 2021, following Islamist militant attacks in towns close to the construction site, TotalEnergies declared force majeure and suspended works on the project. Mozambique LNG was Africa’s largest foreign investment when announced.

Due to the force majeure, the goal to achieve first LNG production has slipped, first to 2027, and later, to 2029.

By Tsvetana Paraskova for Oilprice.com

 

Dallas Fed Pres Says World Needs To Consume Less Oil And Gas

Federal Reserve Bank of Dallas President Lorie Logan says that the world may eventually have to reduce its consumption of oil and natural gas to bring volatile energy markets into a balance. Speaking at a closed-press conference, Logan emphasized the reality of physical supply constraints, noting that the current rate of oil and gas consumption is not sustainable. Logan expects energy markets to stabilize before too long, though it may force a downward adjustment in global consumption.

The Bank of Dallas chief did not provide near-term economic forecasts; however, she was one of three Fed policymakers who strongly objected to post-meeting statement language that hinted the Fed's next move would be an interest rate cut following the April 2026 Federal Open Market Committee (FOMC) meeting. Logan argued that forward guidance should accurately reflect the policy outlook, and that because inflation risks were elevated, an interest rate hike was just as likely as an interest rate cut.

The dissent was heavily driven by surging energy and oil prices tied to the ongoing conflict in the Middle East. The three officials expressed deep concerns that higher energy prices would trickle down to consumer goods and transportation, risking prolonged inflation above the Fed's target inflation rate at 2.0%.

Logan spent a significant portion of her speech urging the central clearing of the Fed's own Treasury securities, warning that highly leveraged investors pose a risk as leveraged positions can unwind rapidly during sudden price or funding shocks.

Logan previously noted that U.S. oil producers are highly unlikely to ramp up production in the near term, pointing out that producers require prolonged, stable high prices to justify investing in the equipment needed for expansion. Global energy markets have been facing massive volatility due to an ongoing Middle East conflict, with the continued closure of the Strait of Hormuz taking ~14% of the world's oil supply offline resulting in a heavy drawing-down of global storage reserves.

By Alex Kimani for Oilprice.com

 

IEA Forecasts a $3.4 Trillion Energy Investment Boom

Global energy investment is set to jump to $3.4 trillion this year, the International Energy Agency said today, noting that the rise will be driven by countries’ efforts to address the second energy crisis in less than five years.

Of the global total, $2.2 trillion is expected to be spent on electricity, including grids, storage, nuclear, wind, solar, and efficiency, the agency said, with the balance of $1.2 trillion to be poured into oil and gas, as well as coal. Interestingly, the IEA sees crude oil investment specifically declining this year, for the third year in a row, to $500 billion, despite the price surge triggered by the war in the Middle East.

Natural gas investment, on the other hand, is seen surging to $330 billion, which would be the highest annual total investment in gas in ten years, the IEA said. Yet investments in solar power are expected to top this, reaching $365 billion in 2026. Total investments in what the IEA calls renewable power are estimated to reach $665 billion.

“We are in the midst of the largest energy security crisis the world has ever faced – and I believe this will reshape investment strategies globally, with parallels to the major changes the energy world witnessed after the oil shocks of the 1970s,” IEA’s secretary-general Fatih Birol said.

“We are already seeing intensified efforts by both producer and consumer countries to diversify trade routes and energy sources – such as advancing new pipelines and other supply infrastructure, on the one hand, and turning more to domestically available resources, on the other,” Birol added.

These efforts include a surge in interest in Canadian oil and gas, and plans by the United Arab Emirates’ national oil company ADNOC to double the capacity of its oil pipeline to Fujairah as soon as next year as a means of bypassing the Strait of Hormuz.

By Irina Slav for Oilprice.com

FirstEnergy Seeks Ohio Rate Hikes Under New Three-Year Grid Plan

FirstEnergy’s Ohio electric utilities have filed a three-year rate plan with state regulators that would fund roughly $800 million annually in grid upgrades while gradually increasing customer bills to support reliability investments.

FirstEnergy’s Ohio subsidiaries - Ohio Edison, The Illuminating Company, and Toledo Edison - submitted their first Three-Year Rate Plan to the Public Utilities Commission of Ohio, outlining proposed investments in electric infrastructure, vegetation management, and customer assistance programs.

Under the proposal, the company would invest an average of $800 million per year in poles, wires, and grid technologies designed to reduce outages and speed restoration times. Another $83 million annually would be directed toward tree trimming and vegetation management, one of the leading causes of outages across Ohio.

The filing comes as U.S. utilities accelerate spending on grid hardening and modernization amid rising electricity demand, aging infrastructure, and increasingly severe weather events. Multi-year rate plans have become more common across regulated utility markets because they provide greater visibility into capital spending and reduce the frequency of rate cases.

FirstEnergy said the proposal is also aimed at making customer bill increases more gradual and predictable. Residential customers using around 1,000 kilowatt-hours per month would see average annual bill increases ranging from 2.2% to 2.8% over the three-year period, depending on the utility territory.

The plan includes expanded customer assistance initiatives, including the creation of a new $4 million Energy Assistance Fund in 2029 through the consolidation of existing programs. The company also proposed a separate $1 million Emergency Energy Support Fund for customers facing disconnection or attempting to restore service.

Additional energy-efficiency and conservation programs would continue through the duration of the plan, including weatherization assistance, smart thermostat rebates, and programs aimed at helping customers better manage electricity consumption.

The proposed rate adjustments would apply only to the distribution portion of customer bills and would not affect electricity supply costs, which are determined separately by competitive suppliers.

 The Public Utilities Commission of Ohio will now review the filing and open the proposal to public comment before issuing a decision.

By Charles Kennedy for Oilprice.com

 

LG Energy Solution and DTE Sign 6-GWh Michigan Battery Storage Deal

LG Energy Solution Vertech has signed an agreement with DTE Energy to supply 6 GWh of battery energy storage systems for eight projects in Michigan.

The deal includes the delivery of battery storage systems with 1.5 gigawatts of power capacity and 6 gigawatt-hours of energy storage capacity to DTE Energy over a two-year period.

The projects will use battery cells manufactured in Michigan and at other facilities in the United States and Canada. The companies said all eight projects will meet domestic content requirements.

The systems are designed to store power when generation exceeds demand and discharge electricity during peak demand periods, helping DTE reduce grid strain and improve reliability.

The deal comes as utilities across the United States are expanding battery storage to manage rising electricity demand, renewable generation, and grid volatility. In Michigan, DTE is also preparing for new load growth from data centers, including Oracle’s planned data center in Saline Township.

DTE said the battery systems funded through the Oracle contract would be sufficient on their own to meet the utility’s share of Michigan’s 2030 clean energy standard for battery storage.

The agreement also reinforces Michigan’s role in the North American battery supply chain, with LG Energy Solution tying the storage rollout to domestic manufacturing and job creation.

By Charles Kennedy for Oilprice.com

 

High Freight Costs Force Asian Buyers to Cancel U.S. LPG Cargoes

The Middle East supply crunch has led to soaring freight rates to ship liquefied petroleum gas (LPG) to Asia from other regions, prompting some buyers to cancel U.S. cargoes due to the high shipping costs.

Buyers have so far canceled at least two cargoes of LPG, the main cooking fuel in India and a key petrochemicals feedstock in China, which were previously slated to depart from the U.S. Gulf Coast in June, sources with knowledge of the matter told Bloomberg on Thursday.

Buyers are also in discussions to cancel additional cargoes as the high freight costs eat into the margins of the LPG importers, according to Bloomberg’s sources.

Buyers in Asia, including top energy importers China and India, have turned to U.S. LPG to partially replace the supply lost from the Middle East.

LPG exports from the Persian Gulf supplied 92% of India’s and 26% of Southeast Asia’s imports in 2025, according to data by Vortexa.

With Middle Eastern exports now constrained, the U.S. is sending higher volumes of LPG, propane, and butane to Asia.

“As uncertainty persists over Middle East Gulf LPG production and exports, US LPG is likely to remain firmly positioned in the Asian markets at least through May – H1 June,” Anna Zhminko, associate market analyst at Vortexa, said at the end of March.

However, the soaring freight rates are now easing demand for U.S. LPG cargoes, according to Bloomberg’s sources.

Meanwhile, India, which uses LPG as its main cooking fuel and has felt shortages since the Iran war choked supplies at the Strait of Hormuz, seeks to boost its supply agreements. Earlier this month, India signed a strategic agreement with the United Arab Emirates to receive liquefied petroleum gas from the UAE.

In addition, India-bound LPG tankers have started to move through the Strait of Hormuz with transponders off on part of the route as dark activity rises among commercial shipping and a growing number of vessels exit the chokepoint.

By Tsvetana Paraskova for Oilprice.com

 

BHP Killed Its Own Hedge Against the Green Steel Shift

  • Leaked internal documents show BHP scrapped a beneficiation plant at its Jimblebar mine that its own analysis rated positively and projected to cut 1.7 million tonnes of scope-three emissions annually – the exact kind of higher-grade ore China’s decarbonizing steel sector and new DRI-based steelmaking technology increasingly requires.

  • The cancellation came as BHP also halted a $400 million solar project, deferred a $1.3 billion renewables plan to 2031, and purchased 62 new diesel trucks locking in fossil fuel use through at least the late 2030s – all while a 2023 internal memo by BHP Australia president Geraldine Slattery warned that slow emissions progress risked "reputational impacts" and threatened the company’s "licence to operate."

  • With Simandou’s high-grade exports ramping up, China’s steel ETS tightening toward absolute caps by 2027, and Australia’s iron ore revenue forecast already declining, BHP’s decision to delay the projects that would have positioned it for a greener steel market is a strategic question as much as a climate one.
blast furance in industrial plant

China just expanded its national emissions trading scheme to cover steel production. The EU's carbon border adjustment mechanism entered its definitive phase in January, putting a financial penalty on emissions-intensive steel. Simandou, the world's largest untapped deposit of high-grade iron ore, shipped its first cargoes to China in late 2025. The market for lower-grade ore is contracting. The market for ore that can feed cleaner steelmaking is growing.

BHP just canceled the project that would have positioned it for the second market. Instead, it bought 62 diesel trucks.

That's the core of what hundreds of leaked internal documents obtained by The Guardian and the Australian Broadcasting Corporation actually reveal. Yes, they expose the gap between BHP's public climate pledges and its internal decisions. But the more consequential story is commercial. The world's largest miner just walked away from its best hedge against the structural shift in its most important market.

The canceled facility was a beneficiation plant at Jimblebar in Western Australia's Pilbara region. The purpose was to upgrade BHP's iron ore to a higher grade – the kind that steelmakers need to produce lower-emissions steel. BHP's own analysis rated the project as having "excellent social value" and "well-aligned" to its climate targets. The projected return on investment was positive. And it would have cut scope-three emissions by 1.7 million tonnes annually, the equivalent of removing more than 350,000 cars from the road.

BHP shelved it in mid-2025. The reasoning cited internally: marginal economics, competition for capital. That calculus was made before China's steel ETS tightened, before the EU's carbon levy moved from paperwork to actual financial liability, and before Simandou – grading at 65% iron against Pilbara's typical 58-62% – started displacing lower-grade supply. The math may look different now.

The documents also show BHP paused a board-approved $400 million solar-and-battery project at Jimblebar, citing "cash prioritization requirements," and deferred a $1.3 billion plan for solar, wind and battery infrastructure to support electric trucks and trains – with no major spending now expected before 2031. To make up the gap, BHP purchased 62 new diesel trucks, locking in fossil fuel operations at the site through at least the late 2030s and potentially 2041. A 2023 memo from BHP Australia president Geraldine Slattery warned explicitly that "slow emissions reduction progress" in the Pilbara risked "reputational impacts" and undermined the company’s “licence to operate, sustain and grow.” The company’s response to that warning was to slow the reduction further.

A BHP spokesperson told Bloomberg the company had cut emissions 36% from its 2020 baseline by mid-2025, with 70% of total electricity now drawn from renewable sources, and that key decarbonization technologies for heavy equipment “are not yet ready to be deployed.” BHP did not respond to a separate request for comment.

BHP’s main Pilbara rival is taking a different approach. Fortescue is pushing ahead with electrification and renewables despite industry skepticism about its timelines, and is investing in green iron as a commercial product, not just a climate commitment. The divergence matters because this is no longer a story about reputation. Australia’s iron ore export revenue is forecast to drop from A$116 billion to A$97 billion by 2026-27. China is building direct reduction ironmaking capacity at scale, which requires higher-grade ore than Australia typically produces. Beijing has issued mandates requiring steelmakers to increase green energy use. Chinese demand for standard Pilbara ore has already peaked.

BHP has a 30% emissions reduction target for 2030 and a net-zero pledge for 2050. Those commitments are now backed by diesel trucks ordered to last until 2041 and a beneficiation plant that got canceled because the economics were deemed marginal. The internal documents make clear that BHP knew the reputational risk. What they also reveal, unintentionally, is the commercial one.

By Michael Kern for Oilprice.com 

Floating Solar Could Be a Lifeline for Land-Scarce Nations Facing Energy Crises

  • A new NTUT study found offshore floating photovoltaic systems generate 12% more energy over their lifetime than equivalent land-based solar, due to seawater’s natural cooling effect.

  • Taiwan — 99% dependent on imported natural gas and battered by the Hormuz closure — faces acute pressure to find land-scarce renewable alternatives.

  • Researchers say OFPV is a “strategic solution” for any densely populated country with limited land, with potential applications across Southeast Asia and West Africa.

Floating solar farms could be significantly more efficient than solar farms on land thanks to the natural cooling effects of seawater, according to new findings from a comparative study conducted by researchers from the National Taipei University of Technology (NTUT) in Taiwan. The floating solar panels used in the study produced 12 percent more energy than the on-land models, with potentially huge implications for global energy security and decarbonization pathways.

The study, published this month in the Journal of Renewable and Sustainable Energy, compared the life cycles of an offshore floating photovoltaic (OFPV) in the waters off of Taiwan to a solar farm on the island. The study found that the OFPV system generated about 12 percent more energy in its lifetime thanks to the natural cooling effects of the seawater, which increased the system’s efficiency. Moreover, it found that OFPV also enhanced emission reductions.

“Because of this higher energy output, they also achieve greater carbon emission reductions,” study co-author Ching-Feng Chen, PhD, was recently quoted by Interesting Engineering. “In simple terms, even though both systems use similar technology, placing solar panels on water can make them more effective,” Chen went on to say.

This could have enormous implications for Taiwan, which is currently experiencing an existential energy crisis. Taiwan’s energy grid is totally isolated and strained, supporting a population of 23 million as well as an enormous and energy-intensive tech manufacturing sector with extremely limited land and energy resources. On top of that, Taiwan’s energy sector also faces major security threats from China and is simultaneously being battered by a still-unfolding energy crisis driven by the closure of the Strait of Hormuz.

At present, Taiwan is 99 percent dependent on imported natural gas. This renders the island extremely vulnerable to the kind of market shocks we’re seeing now due to the U.S.-Israel war in Iran. Asian markets have been hit extremely hard by the closure of the Strait of Hormuz, and Taiwan is no exception – in 2025 about one-third of the island’s liquefied natural gas imports came through the Strait. “For a country where gas-fired plants generate around half of all electricity, this is a direct hit to the fuel that was supposed to make Taiwan’s power system cleaner, flexible and secure,” Oilprice reported last week.

Taiwan desperately needs to update and diversify its energy mix, but the country’s small size and high population density pose major challenges for building out utility-scale clean energy resources. Solar and wind farms take up a lot of space, and Taiwan simply doesn’t have the land to spare. But what Taiwan does have a lot of is coastline. Offshore solar could therefore offer a lifeline to the island’s beleaguered energy sector.

As land-use conflicts surrounding renewable energy become more commonplace and more intense around the world, OFPV could offer a win-win for energy security as well as national security, within and beyond Taiwan. The potential advantages of the NTUT study extend to many other countries with similar land and population constraints.

“From a broader perspective, our work shows that offshore floating solar is not just a technical alternative but a strategic solution for other countries with limited land resources that can help expand their renewable energy capacity while still meeting environmental and land-use constraints,” Chen elaborated in a press release accompanying the study.

In fact, the idea of offshore solar as a lifeline for “population hotspots” is not a new one. In 2023, World Energy suggested that “vast arrays of solar panels floating on calm seas near the Equator could provide effectively unlimited solar energy to densely populated countries in Southeast Asia and West Africa.” The discovery that such solar panels can be even more productive than on-land models is just the cherry on top of this land-use issue.

By Haley Zaremba for Oilprice.com

Sanctioned Russian Diesel Tanker Fails to Reach Cuba

A Russian tanker carrying 270,000 barrels of diesel fuel, which is under US and EU sanctions, spent weeks trying to reach crisis-hit Cuba, which is also under US sanctions, as well as amid what's essentially become a full energy blockade, but has failed to reach the island nation and turned southward toward Brazil.

The exiled Russian outlet, The Insider, has detailed the following based on maritime tracking data:

The Russian-flagged tanker Universal (IMO: 9384306), which had been drifting for almost a month in the Sargasso Sea approaching the Antilles, has finally moved. However, the vessel is heading south, not toward Cuba, according to data from the Starboard Maritime Intelligence ship tracking service provided to The Insider. The vessel's current destination is listed as FOR ORDER. Judging by the vessel's movements, the United States has denied the tanker permission to transit Cuba. (machine translation)

via The Insider

It had been bound for Cuba since its departure from Russia in April, and was for a month drifting in an area some 1,000 miles northeast of Cuba.

Its destination remains listed as "For order" - which means it is still in a holding pattern awaiting routing and final destination instructions.

According to more details of it prior movements via The Moscow Times, "The Universal departed from the Russian Baltic port of Vistino in the Leningrad region on April 6 and, according to Britain's The Telegraph, was escorted through the English Channel by a Russian military convoy."

It was the Russian Black Sea Fleet frigate Admiral Grigorovich that accompanied the vessel into the Atlantic. Such extreme measures as a full military escort are deemed necessary due to prior EU country interdictions of sanctioned Russian ships.

Especially going back to April, Cuba and its population have been facing tightening economic strains where rolling blackouts and fuel shortages have intensified public hardship.

This energy crisis has become a central issue in its relations with Washington, as the government seeks relief from sanctions that limit access to fuel imports. A main supplier, Venezuela, has curtailed oil shipments to Cuba since the United States captured dictator Nicolás Maduro in January.

The White House has repeatedly proclaimed that the Cuban government is in a weakened state. President Trump has also threatened "Cuba is next". "The country is very weak. They’re in a very weak position economically, obviously, and financially," WH Press Secretary Karoline Leavitt said back in April.

By Zerohedge.com