1) Major oil companies reap massive profits as war drives prices higher
American oil and gas giants posted massive spring profits as fighting between Iran and the U.S. impeded petroleum shipments, causing increased fuel prices and shortages worldwide. The conflict, now in its sixth month, halted most shipping through the Strait of Hormuz, the narrow waterway that previously carried a fifth of the world’s oil and natural gas. With global supplies constrained, Brent crude soared from around $70 to above $100 a barrel for much of the spring, peaking at $126. Exxon Mobil reported that second-quarter profit doubled to $14.53 billion, boosted by record diesel production, while revenue rose 42 percent to $116.02 billion. Chevron nearly quadrupled its profit to $12.07 billion, with revenue up 56 percent to $70.06 billion. Six of Europe’s largest oil companies posted combined first-quarter profits of $22 billion, more than 40 percent higher than last year.
2) Trump made clear he wants to see prices fall at the pump while meeting with small, mid-sized, and large refiners
This past week, White House discussions covered concrete ways to expand capacity, including regulatory changes, faster permitting, and additional investment. Refiners said they support the President’s commitment to lowering costs and want to increase capacity, though it’s unclear what immediate steps they might take. A White House official said Trump is prioritizing near-term measures to boost capacity. The U.S. Energy Information Administration reported that refineries ran at 97.4 percent of capacity in the week ending August 21, leaving little spare capacity in the U.S. Some analysts note that translating expanded refining capacity into savings at the pump could take months or years, depending on the scope of the work.
3) Trump says U.S. has a deal to take huge stake in Venezuela’s oil reserves
President Trump announced that Venezuela agreed to give the U.S. majority control of more than 65 billion barrels of its proven oil reserves, a deal he said would more than double U.S. oil reserves and eventually lower gas prices. The announcement comes amid widespread frustration over high gas prices caused by the Iran war, which has also depleted the U.S. Strategic Petroleum Reserve. Trump described the arrangement as a “partnership with private business,” but the White House released no further details — including its structure or companies involved. The agreement would cover a fraction of Venezuela’s 300 billion barrels of proven oil reserves. Venezuela’s estimated crude oil reserves are among the largest in the world, representing about 20 percent of total supply, according to the U.S. Energy Information Administration.
4) Department of Interior raises $82 million in disappointing Gulf oil and gas lease sale
According to Interior’s Marine Minerals Administration, 16 companies submitted 69 bids on 59 tracts in the Gulf of America. The bureau had offered roughly 15,100 unleased blocks covering more than 80 million acres in the sale, making results the second-weakest for a Gulf auction since at least 2013. The sale underscores that many oil and gas companies remain wary of the long-term prospects for drilling off U.S. coasts, despite the Trump administration’s aggressive push to expand production and high crude prices driven by the war in the Middle East. Deepwater offshore projects can take a decade or longer to develop and generally require sustained high prices to make financial sense for producers.
5) The White House extends Jones Act waiver through mid-November
The Trump administration announced it would extend by 90 days (until mid-November) its Jones Act waiver that allows foreign ships to transport energy products and other commodities between U.S. ports while supplies remain constrained by hostilities with Iran. The Jones Act, a 1920 law, requires that cargo moved by water between U.S. ports travel on vessels built, owned, registered, and crewed in the U.S. The White House has credited the waiver with helping temper the surge in U.S. energy prices during the Iran conflict by allowing more fuel to flow to import-reliant states like California. Data from the U.S. Maritime Administration show that shippers have invoked the waiver more than 200 times since March, driving a significant increase in domestic deliveries of essential products, such as gasoline, diesel, and jet fuel, as well as fertilizers and soybean oil.
