On Monday, CuspAI launched the AI Materials Foundry, a coalition of more than 48 technology giants, industrial firms and research facilities. The goal of this body — whose members include Nvidia Corp., Meta Platforms Inc., and Hyundai Motor Group — is to pool computing and scientific resources with the aim of building software that can help researchers develop new materials for chipmakers and other industries at a faster pace and for a lower cost than today’s methods.  

To make this work, the Cambridge, UK-based company has raised $450 million in Series B financing from investors including Jeff Bezos’s fund. Chad Edwards, CuspAI’s co-founder and chief executive, said much of that funding will go towards supporting labs with foundry partners in Cambridge, Singapore and the San Francisco Bay area.

On the research front, he noted, 80% of its efforts this year will go toward work on semiconductors. One potential focus, he added, is to reduce or eliminate the use in chipmaking of rare metals with supply-chain risks, such as ruthenium and iridium.

The new funding — led by venture firms Kleiner Perkins and NEA, with “significant participation” from Bezos Expeditions, according to CuspAI — gives the startup a $2.6 billion valuation, up from $520 million last September. Bloomberg and the Financial Times previously reported on elements of the deal.

CuspAI initially started out with a focus on finding new materials for carbon capture and water purification. But Edwards said that the company decided to pivot over the past year in response to intense demand from the chip manufacturing supply chain, whose products are critical to powering artificial intelligence. Severe shortages of semiconductors, particularly in memory chips, sank shares last week across a range of tech companies dependent on the hardware. Chipmakers and semiconductor suppliers are “frantically searching for new materials,” Edwards said in an interview. “We’ve been literally pulled by all four limbs.”

Geetika Gupta, a senior director at Nvidia, said the chipmaker is seeing  huge demand for new materials across its entire market, from energy storage systems to data center cooling. Through the Foundry, Gupta said Nvidia will most likely work on novel materials in “three-way collaborations” between CuspAI and a third partner. “All of these companies, they treat a lot of this information as a secret sauce,” she said.

CuspAI is among the growing number of AI developers turning to science to open new markets. Earlier AI systems have shown they can learn from biological data, like protein shapes, to potentially discover new drugs. Newer models can, in theory, sift through huge swaths of molecular data to generate designs for materials that could be useful for manufacturing and renewable energy. Investors have piled into the field to back efforts led by former OpenAI and DeepMind researchers, as well as Prometheus, a $41 billion new company launched by Bezos. Google DeepMind has also indicated that it will soon begin work on material discovery for AI. 

CuspAI is trying to set itself apart with talent. Max Welling, its other co-founder, is a respected AI researcher. Yann LeCun and Geoffrey Hinton, two pioneers of modern AI techniques, are on the startup’s advisory board. On Monday, the company also named Abhi Talwalkar, a semiconductor veteran and the director of Advanced Micro Devices Inc to the board. AMD’s venture unit joined in the latest round of CuspAI financing. CuspAI moreover said it hired John Giannandrea, a former Google and Apple executive, to work part-time setting up the startup’s California outpost. 

Machine learning systems have “certainly” sped up the process of developing new materials, said David Fairen-Jimenez, professor of molecular engineering at the University of Cambridge. But he cautioned that designing novel materials that radically improve upon existing ones is a long and expensive process, and AI can only be of limited help. “It’s super useful,” he said. “What I don’t agree with is that there will be some magic coming from machine learning alone.” Fairen-Jimenez has founded two material science startups but doesn’t work with or advise CuspAI.

CuspAI is already familiar with how much trial and error goes into AI materials discovery. One of the startup’s early projects involved working with researchers from Meta to find new materials capable of capturing planet-warming carbon dioxide and slowing down climate change. To do this, CuspAI started their search with 300 trillion possible structures within a class of chemicals called metal organic frameworks, or MOFs, which have a metal atom surrounded by carbon-based molecular chains and are especially good at carbon capture. The system then whittled that list down to 10.

Turning that theoretical work into useful outcomes proved more difficult. CuspAI was able to synthesize six out of 10 of those chemicals, and none outperformed what was already commercially available, said Edwards. “They weren’t state of the art,” he added.

But Edwards stressed that the company accomplished this in six months, a dramatic improvement over typical industry timelines. The startup is now using a similar process to find new materials capable of removing toxic “forever” chemicals from water. Kemira Oy, a Finnish chemicals company, will try to synthesize and test 20 of these new structures this year.

Despite its high-profile partnerships and investors, none of the CuspAI’s projects have delivered a candidate molecule good enough to leave the lab. That’s true for its major rivals too.

Yet Welling, the CuspAI cofounder, isn’t worried. He cites the lack of reliable data, testing facilities and computing power as problems that companies in the field has struggled with — and which CuspAI hopes to address with its foundries. “People underestimate the friction of actually doing the experiment,” he said. “It feels maybe simple, but it’s not at all.”

(Updates with further context on the industry in 14th paragraph and additional details from Edwards on the synthesis process. A previous version of this story incorrectly identified CuspAI's focus area for the year.)

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“The picture is genuinely tight,” analysts including Martijn Rats said in a July 19 note. “Our supply/demand modeling points toward European diesel inventories falling to multi-year lows toward year-end,” they added.

Global energy markets have been jolted this month by the fresh flare-up in the US-Iran war, although petroleum product prices have rallied harder than underlying crude oil. The market for diesel — a workhorse fuel that powers trucks, agriculture and industry — has been tightening on a host of factors including the disruptions in the Strait of Hormuz, but also Ukrainian attacks against Russian refineries, and a diesel-export ban imposed by Moscow.

“The real bottleneck in the oil system right now is refining, more so than crude,” the analysts said, pointing to some unsold African oil cargoes, as well as bearish contango pricing in some parts of the market. “The epicenter of all this is the diesel market, and Europe in particular.”

Diesel-refining margins in Northwest Europe — known as crack spreads — have surged to a record, they said. Local stockpiles are expected to draw steadily from August, reaching a low of about 299 million barrels in November - the smallest for the time of year since at least 2015, they added.

Further afield, industry conditions in China were also contributing to the tightness as refiners processed less crude. “China never supplies Europe with diesel directly,” the analysts said, but when “China runs less, there’s simply less product in the global system to spill westward.”

Still, Morgan Stanley cautioned that the tightness was already reflected in prices, advising investors against betting on more gains from current levels. The market is “full priced — don’t chase,” they said.

European diesel futures traded as much as 3.5% higher at $1,219.50 a ton on Monday, the highest level since May 20. In crude oil, Brent contracts rallied to top $90 a barrel, taking gains this month to 24%.

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The global benchmark rose almost 4% before paring gains to trade around $90 a barrel, the highest since mid-June, while West Texas Intermediate was above $84. Iran said a ceasefire with the US had effectively collapsed, raising the prospect of deeper disruptions to energy flows through the strait.

The US conducted its ninth consecutive night of strikes against Iran in an effort to further degrade the country’s military capabilities used to attack commercial vessels and civilian mariners, according to US Central Command. Kuwait also reported intercepting Iranian drone attacks.

The Iranian Navy said Sunday that it had halted four unidentified vessels attempting to use an “unsafe route” through Hormuz after they disregarded warnings. Two “met with accidents and were stopped in their tracks,” while the others “abandoned the route and turned back,“ the navy said.

The UK Maritime Trade Operations said it had received information from military authorities that a vessel is on fire northwest of Kumzar, Oman. The cause of the blaze has not been verified, it added.

A week of tit-for-tat attacks by both sides has expanded beyond strictly military targets to include bridges, utilities and port facilities, signaling little prospect of a return to the fragile truce. Kuwait Petroleum Corp. said Iran struck an oil facility on Saturday, causing significant damage.

Intensifying strikes “all point to scope for the conflict to broaden in scope and length,” said Saul Kavonic, senior energy analyst at MST Marquee. “Targeting of oil infrastructure in the region, or any successful attempts by the Houthis to hinder the Red Sea route, would be needed to accelerate” price gains.

The Iran-backed Houthi militants in Yemen have disrupted commercial shipping through the Red Sea chokepoint in periods of elevated tension in the Middle East. Last week, their chief threatened to attack Saudi oil facilities after firing ballistic missiles and drones on the kingdom.

Escalating hostilities in the Middle East have raised concerns over a supply crunch. Excluding China, global stockpiles are at a record low, according to JPMorgan Chase & Co., leaving the world with “little room for error.”

Kuwait bore the brunt of Iran’s retaliation over the weekend, while Bahrain was also targeted. Israel said Sunday that it intercepted an Iranian drone near the Israel-Syria border. US forces struck Qeshm Island in the Gulf, as well as southern cities including Shadegan, Iranian media reported.

The US has resumed blockading Hormuz while Iran’s attacks on ships around the waterway have jeopardized the “shuttle run” trade through which Gulf producers ferried out cargoes. US Energy Secretary Chris Wright said the number of ships going through Hormuz is down, but larger tankers are now transiting. He made the remarks in an interview with ABC’s .

Iran was hit “very hard” again in response to recent US troop deaths, President Donald Trump told reporters on Sunday. Separately, Secretary of State Marco Rubio said Iran continues to send signals that it wants to negotiate.

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The Kavomaleas, a products tanker, started signaling early Monday near the tip of the Musandam Peninsula, indicating that it’s anchored and empty. The previous broadcast from the vessel was in the Gulf of Oman early Sunday, suggesting the ship had initially had been transiting through the strait into the Gulf with its transponder turned off — a tactic to avoid detection.

A few hours before the re-appearance of Kavomaleas, the Islamic Revolutionary Guard Corps issued a statement that four vessels had attempted to transit the narrow waterway via an “unsafe route” after disregarding warnings. The ships had switched off their transponders, and two were “met with accidents and were stopped in their tracks,” Iranian media reported, citing the IRGC.

The UK Maritime Trade Operations said it had received information from military authorities that a vessel is on fire northwest of Kumzar, Oman, adding that the cause of the blaze has not been verified. The group didn’t name the ship, but the location mentioned in its alert was close to Kavomaleas’s location.

Greece’s Dynacom Tankers Management manages Kavomaleas, and fixtures seen by Bloomberg show it was chartered to pick up a cargo in the Gulf over the weekend. The company didn’t immediately respond to an emailed request for comment sent outside of business hours. Dynacom was among the first shipowners to get tankers out of the gulf with their transponders off.

Visible traffic through Hormuz appeared at a near standstill early Monday after a weekend of escalating hostilities between the US and Iran. The vessel attacks will likely raise fresh concerns over the safety of ships transiting the waterway while hugging the Omani coast — often with their transponders switched off, known as going dark, and at times with the support of the US military.

A Marshall Islands-flagged bulk carrier is among the few ships that appeared to be attempting to transit Hormuz on Monday, exiting the Gulf after going dark while approaching the strait near Oman. A liquefied petroleum gas carrier that’s been marked as being part of the dark fleet involved in Iranian exports also appeared to be approaching the strait.

Another bulk carrier that’s registered with Marshall Islands began signaling from the Gulf of Oman after indicating that it was in the Gulf early Sunday, suggesting that it had crossed Hormuz dark.

Oil traders and shipping executives have been monitoring whether vessels are getting through Hormuz along the Iran-approved corridor further to the north, which would expose charterers and shipowners to compliance risks, or the Omani route to the south.

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The company added that the acquisition will enhance its ability to deliver long-term earnings growth and cash flow through a broader industrial offering and an expanded portfolio of recurring aftermarket services.

“Chart’s thermal management solutions bring complementary capabilities and aftermarket service offerings that accelerate our portfolio strategy,” said Lorenzo Simonelli, Chairman and Chief Executive Officer of Baker Hughes.

“Together, we will expand the solutions we deliver across a broader range of energy and industrial markets and create greater value for customers and shareholders,” Simonelly said, adding “we welcome our new colleagues to Baker Hughes and look forward to working with them to deliver disciplined execution and maximise synergies as we move forward.”

Serving multiple industries 

As part of the integration, Baker Hughes has appointed Jim Apostolides, the company’s Chief Infrastructure & Performance Officer, as Senior Vice President to lead the new Chart business segment. Apostolides has overseen integration planning since July 2025 and brings more than 25 years of operational and supply chain leadership experience.

Chart will operate as a separate reporting segment within Baker Hughes, reflecting the strategic importance of its capabilities in air and gas handling, thermal management, and lifecycle services. The company generated $4.3 billion in revenue in fiscal year 2025 and serves customers in more than 50 countries across sectors including gas infrastructure, nuclear energy, data centres, carbon capture and storage (CCS), geothermal, space, and other industrial markets.

The acquisition forms part of Baker Hughes’ broader portfolio optimisation strategy, which aims to expand its presence in industrial and lifecycle-driven markets while streamlining non-core businesses. The company said it remains focused on disciplined capital allocation and continues to target a net leverage ratio of between 1.0x and 1.5x within the next 24 months.

Baker Hughes has launched a company-wide integration programme aimed at aligning operations, product and technology platforms, engineering capabilities, commercial activities, and digital services. The company expects to achieve annualised cost synergies of $325 million within three years, with early savings focused on manufacturing, supply chain operations and corporate functions.

Honeywell said the acquisition enables the company to offer a broader end-to-end suite of solutions for industrial customers. 

“This acquisition significantly enhances Honeywell Technologies’ ability to deliver end-to-end solutions that help our customers drive efficiency, reduce emissions, and accelerate energy security goals,” added Ken West, President and CEO of Process Technology at Honeywell Technologies. “By combining Johnson Matthey’s differentiated catalyst expertise with our leading technologies and digital capabilities, we are creating a strong platform for future growth while enabling our customers to immediately unlock the benefits of a more robust set of offerings.”

The completion of the deal comes as Honeywell Technologies continues to reshape its business following a series of portfolio changes. The company completed the separation of its Aerospace Technologies business, now operating as Honeywell Aerospace, on 29 June 2026. That followed the spin-off of its Advanced Materials business, Solstice Advanced Materials, in October 2025.

Since 2023, Honeywell Technologies has completed around $11.5 billion in acquisitions aimed at strengthening its technology portfolio. These include Compressor Controls Corporation, SCADAfence, Carrier Global’s Access Solutions business, Air Products’ LNG business, Sundyne, and Li-ion Tamer.

The company has also streamlined its operations through divestments. It completed the sale of its Personal Protective Equipment (PPE) business in 2024 and expects to close the previously announced sales of its Productivity Solutions and Services and Warehouse and Workflow Solutions businesses during the second half of 2026.

Operations at mooring 1 and mooring 3 were suspended after the attack, which happened when the Asia and Nissos Ios tankers were being loaded, the CPC said in a statement Sunday on Telegram. The drone strike was the fifth attack on CPC facilities, it said. 

The consortium comprises oil companies from Russia, the US, Kazakhstan and several European counties. CPC oil mostly comes from Kazakhstan and such shipments aren’t subject to Western sanctions.

Crews extinguished fires on the vessels, no injuries were reported and no oil spill occurred, the Kazakh Energy Ministry said in a statement that didn’t specify where it thought the drones originated from. The mooring facilities weren’t damaged and information about resumption of loading operations will be provided when it’s available, it said. 

“Kazakhstan demands an immediate halt to these attacks and the adoption of comprehensive measures to ensure the security of the infrastructure used for the export of Kazakh hydrocarbons,” the Kazakh Foreign Ministry said in a separate statement.

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From 2027, new renewable generators should receive support “in a way that benefits both the market and the system,” according to a draft law published by the Economy Ministry late Friday. That means rewarding projects that respond more closely to electricity demand and don’t worsen grid congestion.

Fixed feed-in tariffs for new installations would be gradually phased out under the proposal. 

The changes could slow investment in onshore wind and solar projects, where developers already face higher costs and falling revenues as power prices increasingly turn negative. Still, the ministry is sticking to its target of raising renewables’ share of Germany’s gross electricity consumption to 80% from about 58% by 2030, and plans additional auctions for wind capacity.

Germany’s feed-in tariffs, generally granted for 20 years, and recent efforts to cut red tape have helped renewable capacity expand at a record clip. But power lines have failed to keep pace, creating bottlenecks and forcing operators to temporarily curtail generation. Producers can claim compensation for the lost output.

The state is expected to spend about €16 billion ($18.3 billion) on renewable support this year, fueling criticism as Chancellor Friedrich Merz’s government seeks to rein in spending, including on pensions and healthcare. Additional payments for curtailed generation of as much as €3 billion have also drawn criticism.

As part of the reform, grid operators would be allowed to reduce curtailment payments for new projects in areas where the network is already frequently congested. The provision is a softer version of an earlier proposal opposed by developers. 

To comply with European Union requirements, the draft Renewable Energy Act would also cap subsidies and introduce a clawback mechanism allowing the state to recover excess profits. That would bring Germany’s system closer to the Contracts for Difference model used by the UK, where the state tops up generators’ revenue when market prices are low but recovers money when prices rise above a predetermined level.

The proposal would also end subsidies for solar installations smaller than 25 kilowatts and require larger projects to be paired more frequently with batteries, helping to shift power supply into the evening. The draft law is subject to changes as the ministry solicits input from stakeholders.

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Argentina is rushing to grow production of natural gas out of its booming shale patch Vaca Muerta, which has more recently been focused on oil as it is easier to transport and export. Natural gas in used in the output of fertilizers, giving drillers another customer base for the energy product. The plant will also strengthen domestic supply chains for the crop input and reduce reliance on shipments from the Middle East.

The plant, which will produce 2.1 million tons a year of ammonia and urea, received a final investment decision, the company said in a regulatory filing Friday.

The project has been closely watched by equity analysts tracking Pampa’s growth. It has the potential to create $1 billion in annual revenue, executives said on an earnings call in May. The company, chaired by Argentine business mogul Marcelo Mindlin, is already a major power generator and natural gas producer and has been making a push in shale oil.

The plant, to be built over three years in Argentina’s petrochemicals hub in Bahia Blanca, underscores a broader trend of the nation finding ways to monetize its vast shale gas reserves. These include the Southern Energy SA liquefied natural gas project, in which Pampa has a stake, and another bigger LNG venture involving Italy’s Eni SpA and Adnoc, Abu Dhabi’s national oil company, which still needs to secure financing. Profertil SA, an existing Argentine fertilizer operation, is also considering a big expansion.

Pampa’s final investment decision is another major coup for RIGI, President Javier Milei’s marquee investor program featuring major tax breaks. RIGI approval is “essential,” it said in the filing and pending. RIGI has drawn a slew of applications in shale-drilling areas and in pipeline and processing infrastructure — supercharging development in the Vaca Muerta.

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Elodie Laugel, Amundi’s chief responsible investment officer, says excluding fossil-fuel producers from such funds would make it harder for money managers to pressure them to reduce their carbon emissions over time.

“The more you have exclusion constraints on the transition category, the more you are missing the objective of actually using asset managers like us to help companies to transition,” she said in an interview.  

The comments from Europe’s biggest money manager come as Brussels rewrites the world’s most comprehensive regulatory framework for sustainable investing, the Sustainable Finance Disclosure Regulation. Efforts to overhaul the rule-set have overlapped with the ongoing war in Iran, which is forcing Europe to focus more on energy supply.

Some of the proposed revisions to SFDR, which covers assets worth about $14 trillion, currently don’t go far enough in allowing asset managers to hold oil and gas companies in transition funds, Laugel said. The EU’s proposal on such funds, which represents just one plank of the revised SFDR framework, is a “challenge for us,” she said.

SFDR, which was originally enforced in early 2021, is being overhauled after facing criticism it was a confusing piece of regulation that failed to prevent greenwashing. Transition funds are expected to address those concerns, and provide a credible pathway for investing in companies that stand to benefit from the push toward a lower-carbon economy

Lawmakers have been debating though whether to require transition funds to exclude fossil-fuel companies still expanding production. Their inability to reach agreement led to the delay of a critical vote on revisions to SFDR that had been due to take place earlier this month.

Proposals to include oil and gas exposures in transition funds come as companies including BP Plc and Shell Plc wind back earlier commitments to invest in renewable energy. Against that backdrop, some asset owners and managers have been stepping up exclusions of the sector, according to Covalence SA, a Geneva-based ESG ratings company.

Fossil energy accounted for 30% of all sector exclusions in the second quarter, up 4 percentage points in just three months, according to an analysis conducted by Covalence. 

At the same time, companies that depend on fossil fuels to power operations are increasingly being penalized in the market, according to an analysis by Bloomberg. Top renewable-power users outperformed them by 6% as of May. That’s in part as sources of energy that aren’t disrupted by the Iran war see their appeal rise, the analysis found.

Money managers have long disagreed on the extent to which oil and gas companies belong in funds that claim to be supporting the clean-energy transition. Purists argue that investment clients would rightly be surprised to find that their sustainable fund holds fossil fuels. Energy companies have countered they’re more likely to transition if they’re not shut out by investors.

TotalEnergies SE, the biggest oil and gas producer in France, has said that “excluding companies solely because they invest in new oil and gas projects, while disregarding their significant and expanding contribution to low-carbon energy, weakens key objectives the European Union aims to achieve,” according to an April document discussing SFDR and seen by Bloomberg.

Nareg Terzian, head of strategy and communications at the International Association of Oil & Gas Producers Europe, says the war in Iran — and an unpredictable administration in the US — means the EU needs to focus more on energy independence. There is “nascent discussion” among member states to tap reserves, and “we make sure that it’s on their minds,” he said.

Supporting domestic energy production “is definitely part of the answer,” Terzian said. And it “should get greater attention.”

Against that backdrop, oil, gas and coal companies should be included in transition funds, says Mitch Reznick, group head of fixed income at Federated Hermes in London. 

“Where returns justify the risk, transition funds should be able to invest in high-emitting sectors demonstrating genuine decarbonization through their governance, strategy and capital allocation,” he said.

Laugel of Amundi says she “completely” understands that there might be greenwashing concerns. But “more transparency” could resolve that, while a ban would eliminate the leverage that asset managers have, she said.

“If you are not around the table, there is this expression: that it’s likely that you are on the menu,” Laugel said.

EU lawmakers are expected to take up the question when they reconvene after the summer holidays in Europe. Any agreement would then need to be reconciled with member states’ proposed requirements, which in June stipulated oil companies with “time-bound” plans to cut emissions should be allowed in transition funds. 

(Adds timeline of lawmaker talks)

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Over past months, the European Commission has resisted pressure from the US, the oil and gas industry, and more than half of its member states to revise its methane rules, opting instead to issue non-binding guidance. It is set to recommend next week that penalties should not be applied between 2027 and 2029, except for “cases of large-scale fraudulent breaches,” according to a draft document seen by Bloomberg News on Friday.

Disagreements over the rules — which target emissions of the potent greenhouse gas within the EU and impose new requirements on fossil fuel imports — have intensified after the US, Qatar and other gas-producing nations warned the bloc that the regulation could jeopardize energy shipments. 

Beginning in 2027, fossil-fuel imports into the EU will have to comply with monitoring, reporting and verification requirements aimed at reducing methane emissions, a greenhouse gas that traps about 80 times more heat than CO₂ over its first 20 years in the atmosphere. By 2030, imports exceeding a methane-intensity threshold will face penalties. Under the current framework, companies could be fined as much as 20% of their annual turnover.

The US, which has become Europe’s largest supplier of LNG, has warned that its supplies will head elsewhere if the bloc refuses to ease the regulation. 

The debate comes as the EU seeks to bring down stubbornly high energy costs and diversify supplies amid the conflict in the Middle East and efforts to end reliance on Russian energy. It also underscores the challenges the bloc faces in extending stricter environmental standards to imports from third countries.

The industry has repeatedly said that the recommendations pledged by the EU are not enough and that importers risk being pushed into non-compliance. They cited verification as a major bottleneck, with too few recognized protocols and verification bodies.

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Major state-owned buyers, including Sinopec and PetroChina Co., are in discussions with exporters of the fuel that don’t depend on the Gulf for shipments, according to people with knowledge of the matter.

The Chinese companies are looking to sign contracts for deliveries that would begin before 2030 for a term of at least a decade, the people said, declining to be named discussing a sensitive matter. Canada is one source being considered, said two of the people. 

Sinopec and PetroChina didn’t immediately respond to requests for comment.

Such a shift would mark one of the clearest signs yet that the war in Iran could dramatically reshape the global LNG market, as major importers reassess their exposure to the Gulf. 

Largest Customer

China, the world’s top LNG importer, is Qatar’s largest customer, and the emirate accounted for almost 30% of its supply last year. The two countries have signed some of the industry’s biggest deals in recent years, helping underpin Doha’s massive expansion plans.

China isn’t expected to try and cancel its existing agreements with Qatar, which are binding, the people said.

Another consideration for the Chinese companies is to avoid locking in supply from the US, the world’s biggest LNG exporter, due to trade tensions, the people said. Shipments between the two countries plunged after Beijing slapped tariffs on US LNG last year in retaliation to American levies on Chinese goods.

Qatar had been aiming to quickly revive production shuttered in March following Iranian attacks. However, renewed conflict in the strait has once again effectively shut the vital waterway, forcing Qatar to pause its efforts to restart Ras Laffan, the world’s largest LNG plant.

China imported only about 100,000 tons of the fuel from Qatar between April and June, according to ship-tracking data compiled by Bloomberg. That compares to 4.7 million tons over the same period last year.

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Carso, through a subsidiary, will purchase TotalEnergies’ 30% stake in the EP Mexico Block 30, according to a securities filing on Thursday. UK driller Harbour Energy Plc will control and operate the remaining 70% of the block, and the deal’s closing will be subject to government approvals, according to the filing.

The deal extends Slim’s holdings of the bits and pieces of Mexico’s oil and gas sector that aren’t under state control. While state driller Petroleos Mexicanos is seeking private partners to boost slumping crude output and shore up struggling finances, Slim said earlier this year his companies would steer clear of new joint ventures with Pemex.

In January, Carso purchased Fieldwood Mexico from Russia’s Lukoil, cementing its full ownership of two key Gulf fields. That followed a $2 billion contract with Pemex last year to drill more than 30 wells in the Ixachi oil and gas play, a project Slim says will roughly double crude production from that field to around 200,000 barrels a day within three years.

Carso’s other deals in recent years, including purchases of stakes in Talos Energy Inc. and US-based refiner PBF Energy Inc., have positioned the company as Pemex’s single largest private partner.

Slim said earlier this month Mexico’s total oil and gas output could reach as much as 2.5 million barrels a day with private sector help. Pemex produced 1.65 million barrels of crude and condensates per day as of the end of April.

Slim, 86, is Latin America’s richest person with a fortune of about $130 billion, according to the Bloomberg Billionaires Index, largely through telecommunications giant America Movil SAB. 

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Burnham’s team has asked the civil service to draw up plans for new energy and water policies that can be revealed as soon as next week, according to people familiar with the matter. He will succeed Keir Starmer as premier on Monday and is planning a series of public statements in his first days to mark a change from the previous administration.

Officials are working on a range of options, the people said. They include signaling a willingness to approve new drilling at the Jackdaw gas and Rosebank oil fields off the coast of Scotland, and an expansion of so-called tie-backs which allow further drilling on or near existing ones.

No final decision has been made on what form the North Sea announcement will take, but Burnham is likely to indicate that he is in favor of more drilling, the people said. A spokesperson for Burnham declined to comment. 

The future of North Sea oil and gas has become even more of a political flashpoint since the start of the Iran War, which has prompted countries to turn to homegrown energy sources. The current Energy Secretary Ed Miliband has resisted calls from some corners of business and politics to allow new drilling licenses, instead ramping up renewables. 

But he has faced powerful critics including US President Donald Trump and RenewableUK, a professional association with members from both the traditional energy sector and the newer, cleaner one. 

Government officials expect Burnham eventually to back at least the Jackdaw project, but public consultations have recently been launched on Jackdaw and Rosebank so his government may not be able to formally approve them before those have run their course — a constraint that has also bound the current energy secretary. 

Previous approvals for the fields were overturned by the courts. And the ultimate decision will rest with the person Burnham names to Miliband’s post, because such project approvals are not a cabinet decision.

Burnham has said he won’t name his new ministers until he takes office Monday. Miliband has been a staunch supporter of net zero policies, although has expressed a willingness to be pragmatic on North Sea oil and gas.

New drilling would draw criticism from environmentalists and some on the left of the Labour Party who have opposed it on the grounds that it would damage Britain’s net zero commitments.

One official said approving Jackdaw and Rosebank wouldn’t breach Labour’s manifesto pledge to ban fresh licenses to explore new oil and gas fields, because the licenses were granted under the previous Conservative government.

The proposal was criticized by those who support a transition to green energy. Tessa Khan, executive director of nonprofit campaign and research organization Uplift, said it would be a “mistake” for Burnham to “cave into the demands of the profiteering oil and gas industry” and warned such a decision would be “out of step with the majority of voters.”

The policy was also attacked by Green Party leader Zack Polanski who said new drilling in the North Sea would be a signal the UK is stepping back from its climate commitments. He said the government should be focusing on renewable energy instead.

Thames Water

Burnham’s aides have also tasked the civil service with preparing an announcement on the public control of Thames Water. They have told officials they want to make water a priority.

One of the options being drawn up is putting Thames Water into special administration, a form of temporary nationalization. Some officials working on the transition plans see it as likely Burnham will proceed with that outcome for the utility, which supplies 16 million customers in London and the surrounding areas.

Explainer: Why Thames Water Is Edging Closer to State Control

Burnham said in an interview with the Guardian in June that Thames Water should be nationalized. However, it remains unclear if he means temporary or permanent nationalization and the regulator Ofwat is holding off on any decision about the future of Thames until it has greater clarity.

Talks between Ofwat and senior creditors — including Apollo Global Management, Elliott Management and Silver Point Capital — have ground to a halt amid the transition of power from Starmer to Burnham. Thames Water yesterday said it needed a decision on a rescue deal by October, as it is due to run out of money in December.

The chief executive of Thames said he would respect whatever decision the new prime minister makes on the future of the company, and is keen to work with him on his plans. 

“I very much respect for him needing or saying that there needs to be greater public control,” Thames CEO Chris Weston said in an interview. “I would point out there is a huge amount of public control already over water companies.”

In recent weeks the government has shifted its stance on the future of Thames, saying it is now prepared for any outcome, having previously said it prefers a market-led solution. Polling by YouGov showed 82% of Britons support nationalizing water companies.

Burnham is interested in pursuing an approach similar to mutualization, which would see water companies converted into not-for-profit cooperatives owned and run for the benefit of customers, according to people familiar with the matter. 

The new prime minister favors the approach which would cost less than straightforward nationalization and would be more feasible to achieve, the people said. Politically it would also have the support of Labour MPs who argue it offers an route to public ownership that’s more affordable within the country’s current fiscal constraints.

Burnham will give a speech on Friday - his first since being confirmed as the next Labour Party leader - in which he will criticize the move to increased privatization in the UK since the 1980s and underline his commitment to more public control.

Burnham will argue that an “authentically Labour” administration should press ahead with a program of more public control, reindustrialization and putting more power into the hands of communities through devolution.

©2026 Bloomberg L.P.

Both firms are fracking into the sandstone that makes up the Basel Belly River formation in an area southwest of the Alberta’s provincial capital Edmonton called Willesden Green. For the first half of the year, 15 drilling licenses targeting or ending at the formation were granted, the most for that span of time in 14 years, Alberta Energy Regulator data show.

The new wave of oil drilling gained attention in early June when Obsidian agreed to buy 35 sections of land in the field from Highwood Asset Management Ltd. for C$105 million (about $75 million) in cash. The deal included the equivalent of about 2,500 barrels of oil a day of hydrocarbon production, about 9% of the company’s total output. A total of about 75% of the production is light oil. 

“You started to see some initial wells drilled in the Basil Belly River that had good success on the backs of those that we licensed,” Steve Loukas, Obsidian’s chief executive officer, said in a recent interview with Bloomberg. “Our initial well in the fall of 2024, and we’ve had constructive results that have carried through into 2025 and ultimately 2026.”

The push to drill for oil is part of a broader trend in Western Canada, where companies target liquid-rich areas of shale formations including Montney and Duvernay after years of depressed gas prices. Western Canadian gas has traded at an average of about $1.70 per million British thermal units less than US gas over the past five years, a discount that’s persisted since the start of liquefied natural gas exports off British Columbia last year. At the same time, local oil prices have been supported by the war in the Middle East and the opening of new export pipelines including the expanded Trans Mountain system to the Pacific.

Obsidian plans a six-well development program next year to boost the production of the acquired assets to the equivalent of 3,000 barrels a day, Loukas said. Each well can be developed for about C$5 million. 

The uptick in interest in Basel Belly River marks a revival of the formation. Two decades ago, natural gas prices were rising to records of almost $16 per million British thermal units, and companies including Ember Resources Inc. and Ovintiv Inc., then known as Encana, were tapping into the rock layers for natural gas. More than 1,000 wells were drilled in 2005 that either targeted or terminated at the formation, 95% of them extracting natural gas, according to AER data. 

Things changed when the US shale revolution took off around 2009, unlocking supplies from Pennsylvania to Oklahoma and sending gas prices tumbling. By 2014, the number of wells drilled in the Basel Belly River formation had dropped to single digits and remained there until two years ago. 

Combined with Obsidian’s existing production from Basel Belly River, the company’s output could be boosted to 7,000 barrels a day, making up most of the formation’s output in Willesden Green. Total production from the area, Obsidian estimates, is equivalent of between about 10,000 to 13,000 barrels a day. 

©2026 Bloomberg L.P.

The Japan Organization for Metals and Energy Security, better known as Jogmec, has invited bids for “asset valuation and related services for the sale of equity interests in LNG projects in Asia and Oceania,” according to a tender published on Wednesday.

The government-backed company did not identify the projects being considered for potential divestment, and declined to share details in a response to Bloomberg’s request seeking comments.

Jogmec has stakes in several LNG projects across Asia and Oceania, including in joint ventures that own part of Australia’s Wheatstone LNG project and a share in Indonesia’s Tangguh LNG plant.

Managing long-term LNG supplies remains central to energy security for resource-starved Japan. Jogmec’s mandate includes early-stage financing for high-risk resource projects before transferring or selling its stakes to Japanese companies once these become commercially viable.

©2026 Bloomberg L.P.

Under the deal, ABB’s biggest-ever acquisition, Rotork investors will get £5.03 ($6.81) in cash per share, a premium of around 60% on its latest three-month average price, the Swiss industrial company said Thursday. ABB also signaled it has deep pockets for more purchases.

Rotork makes equipment that opens and closes industrial valves to control the movement of liquids and gases through pipelines and plants. The Bath, England-based company has significant exposure to energy, water infrastructure and utilities. Its sale marks the latest in a string of acquisitions of UK firms by foreign buyers this year.

ABB’s chief executive officer, Morten Wierod, has streamlined its portfolio since taking over nearly two years ago to tap into burgeoning investment in the data centers underpinning the AI boom. The Zurich-based manufacturer, which makes the transformers that enable power grids to feed the centers’ energy needs, last year sold its robotics division for more than $5 billion and focused on targeted acquisitions.

Its push into industrial AI and automation has helped drive its shares up about 70% in the past year. They slipped about 3.3% in Zurich Thursday, while Rotork surged by as much as 67% to a record £4.86.

Wierod said ABB has a pot of $13 billion available for additional purchases, telling Bloomberg TV the company is “in a very strong position with a strong balance sheet.”

“When we want to do M&A we can do,” he added. “We’re taking a wide view and are looking at every area.”

With the Rotork deal, the value of takeovers of UK companies listed in London has risen almost 130% this year to roughly $64 billion, data compiled by Bloomberg show. Well-known names like asset manager Schroders Plc, ingredients maker Tate & Lyle Plc and insurer Beazley Plc have all agreed to be acquired by overseas rivals. 

This boom in acquisitions comes at the same time as the UK’s stock exchange struggles to attract new listings - posing concerns over the country’s status a global business hub.

ABB rivals like Germany’s Siemens AG and Schneider Electric SE of France have also benefited from the spurt in AI-related demand and have been active as well in dealmaking. Schneider agreed this month to buy Cognite in a $3.1 billion all-cash deal to expand its industrial data and AI software operations, part of an accelerating push to modernize Europe’s factories.

RBC analyst Mark Fielding said the Rotork purchase makes sense for ABB and includes “an attractive premium.” However, the fact that the British firm is “a niche asset” means there could be a counter bid from among “the larger process-equipment companies,” Fielding said in a note.

Having already raised its revenue outlook for the year in April, ABB did so again on Thursday, predicting low double-digit to low-teens growth.

ABB also reported second-quarter orders that surpassed expectations, jumping by 30% compared with the same period a year earlier to $12 billion, comfortably beating estimates.

“When we talk with customers, the pipeline is very strong so the outlook in this sector for the next quarters and years is very strong,” Wierod told Bloomberg TV, referring to ABB’s electrification business. “And we are well positioned to capture that.”

ABB had already announced Wednesday that it bought French company Advantics, adding high-efficiency silicon carbide power-conversion technology to its portfolio. It didn’t publish financial details.

The purchase reinforces its position across the AI power chain, according to Bloomberg Intelligence, which expects ABB’s data-center revenue to rise to about €9.9 billion ($11.4 billion) by 2030 from €3 billion last year.

“Schneider and Vertiv should retain leadership, but ABB looks well placed to narrow the gap as AI data centers shift toward higher-value power architectures,” Omid Vaziri, a senior BI industry analyst, said in a note.

Barclays Plc is advising ABB on the Rotork deal, while JPMorgan Chase & Co., Rothschild & Co. and Jefferies Financial Group Inc. are working with Rotork.

©2026 Bloomberg L.P.

State-owned Pakistan LNG Ltd. purchased a cargo for July 21-22 delivery at around $20.70 per million British thermal units via a tender that closed on Wednesday, according to traders with knowledge of the matter. That’s the priciest LNG purchase for the South Asian country since 2022.

Pakistan was forced to buy the shipment because a planned delivery from Qatar was canceled due to the disruptions in Hormuz — a key conduit for about a fifth of global LNG supply. This is the fourth cargo Pakistan purchased from the spot market for July delivery, as Islamabad scrambles to stave off a gas crunch and energy shortage.

Asian LNG prices have surged this month after the US and Iran resumed attacks in the Middle East. Gas flows through Hormuz have dropped since a Qatari tanker was attacked last week, forcing some buyers to rush to find replacement supply.

©2026 Bloomberg L.P.

“Markets are nervous” and grappling with “big uncertainty” due to an escalation of attacks from both sides that threatens to disrupt shipments of oil, fertilizer, natural gas and other cargoes through the key waterway, Birol said in an interview on the sidelines of the Aspen Security Forum in Colorado on Wednesday.

Visible traffic through the strait has thinned markedly over the last week as vessels were attacked and the US reimposed its blockade of Iranian shipping. Saudi Arabian oil loadings from inside the Gulf have slumped in the wake of strikes on supertankers, while the International Maritime Organization has said the waterway remains too dangerous for commercial vessels to transit.

“If the Strait of Hormuz remains closed we may again have some difficulty for global economies, including those in the region and developing nations and Asia,” Birol said. “It is not months, it is weeks” after which the strait needs to be “fully open, unconditionally open,” he said.

Although the disruption to Gulf energy and feedstock deliveries has impacted economies such as South Korea and Japan, countries like Bangladesh, Pakistan and India are far more vulnerable to such cutoffs, Birol said.  

©2026 Bloomberg L.P.

Perhaps the most profound consequence of the crisis has been the return of energy security to the centre of policymaking. Major economies have accelerated efforts to reduce exposure to supply disruption.

For global energy, this broader transformation represents a fundamental inflection point. The restoration of energy flows around the world now hinges on rewriting the risk calculus for shipping consortiums, underwriters, producers, and sovereign buyers alike, as well as on the creation of bold new energy infrastructure and supply chain routes across the Gulf and the Middle East. 

Critically, the first four months of this disruption shattered historical assumptions about global energy market vulnerability. The swift deployment and scaling up of alternative supply routes, contingency measures and the market’s unexpected resilience under maximum pressure has fundamentally altered how energy security is defined. Consequently, the legacy of the Middle East conflict is not a temporary disruption, but the catalyst for a transformational market reset. The crisis has accelerated structural shifts that had been percolating for decades: such as the return of energy security as a strategic priority, greater emphasis on supply chain resilience, increased investment in diversified energy systems and a renewed recognition of geopolitical stability as central to economic security.

Hormuz: The critical chokepoint

At the centre of the crisis lies the Strait of Hormuz, through which around 20 mbpd, or nearly 20% of global oil consumption, normally transits, alongside roughly 20% of globally traded LNG, primarily from Qatar. With few alternative maritime routes at a comparable scale, Hormuz represents one of the most concentrated sources of systemic risk in the global economy. Asian markets remain particularly exposed, accounting for approximately 84% of crude oil and more than 80% of LNG flows through the Strait. This reinforces its importance not only for Gulf producers, but for global manufacturing, electricity generation, and industrial competitiveness.

Although Iran declared the Strait closed, some limited flows continued, but at levels insufficient to stabilise markets or prevent disruption. The situation therefore evolved into constrained operations, elevated security risks, and weakened commercial confidence rather than a fully enforced physical blockade. Alternative export routes partially mitigated the scale of the shock. Saudi Arabia’s East–West pipeline, connecting the Eastern Province to Yanbu on the Red Sea, possesses a capacity of 5-7 million barrels per day (mbpd), while the UAE’s Habshan–Fujairah pipeline added a further capacity of approximately 1.5–1.8 mbpd. Together, these routes enabled the redirection of roughly 8–9 mbpd of crude exports away from Hormuz, cushioning the physical supply impact even as market disruption continued.

Risk pricing replaces physical shortages 

Initial market reactions reflected Hormuz’s strategic importance. Oil prices rose sharply, LNG markets tightened, freight rates increased, and insurance premiums surged. Yet the anticipated system breakdown did not occur. 

Instead, the crisis demonstrated how global energy markets have evolved since earlier shocks. Strategic oil reserves, diversified production, flexible LNG trade, demand adjustments, and increased supplies from the United States, Brazil, Guyana and Norway helped prevent widespread physical shortages. The result was not a scarcity-driven crisis, but one defined by elevated risk premiums. Markets continued to function, albeit at higher prices, with greater volatility and higher operating costs.

With few alternative maritime routes at a comparable scale, Hormuz represents one of the most concentrated sources of systemic risk in the global economy.

This distinction is important. Previous oil shocks were driven by physical supply losses, whereas the Hormuz disruption increasingly reflected the pricing of geopolitical risk. Markets responded not only to lost barrels, but to the probability of future disruption.

Why oil never reached US$200

One defining feature of the crisis is that oil prices remained far below extreme forecasts. At the height of the crisis, some analysts warned that a prolonged closure could push prices above US$150–200 per barrel, given that around 20% of global supply normally transits the Strait. Those scenarios did not materialise.

Five structural factors explain why:

• More diversified global supply, supported by US shale and increased output from Brazil, Guyana, Norway and other producers
• The availability of strategic reserves
• More flexible LNG and crude markets enabling rapidmrerouting
• Continued demand management and stabilisation in key consuming markets, particularly China; where strong import relationships with key suppliers, including Iran, alongside proactive measures to redirect domestic supply and manage exports, helped absorb volatility and reinforce market confidence
• Markets pricing probability rather than certainty

In addition, alternative export routes, including pipeline infrastructure from the UAE and Saudi Arabia that bypasses Hormuz, helped sustain partial flows and reduce the scale of physical disruption.

However, resilience is not unlimited. The US strategic oil reserve currently holds around 400 million barrels, down roughly 45% from 2009, reducing the buffer available to absorb future shocks. While these mechanisms helped prevent a more severe price spike, they also highlight a structural constraint: the system absorbed part of the shock by drawing down its own safeguards.

This broader lesson is that stability did not reflect reduced geopolitical risk, but the simultaneous availability of multiple emergency buffers, including strategic reserves, spare production capacity, diversified supply and demand flexibility. If not replenished, future disruptions may be absorbed less smoothly.

From energy shock to economic shock

The economic consequences have extended wellmbeyond energy markets. Higher fuel prices have affected transportation, aviation, petrochemicals, fertilisers, and manufacturing, while freight and insurance costs have lengthened delivery times and added inflationary pressures. Maritime chokepoints affect far more than oil and gas flows. They shape food prices through fertilisers, industrial competitiveness through manufacturing costs, and consumer inflation through transport and logistics.If elevated prices persist over a prolonged period, they could add between US$1 trillion and US$2 trillion annually to global energy expenditure. This underscores a broader lesson: geopolitical instability now carries systemic economic costs.

This broader lesson is that stability did not reflect reduced geopolitical risk, but the simultaneous availability of multiple emergency buffers, including strategic reserves, spare production capacity, diversified supply and demand flexibility.

This reinforces the strategic case for diversification. Investments in domestic energy systems, electricity grids, renewables, storage, and alternative fuels are no longer driven solely by climate objectives; they have become instruments of economic resilience that reduce exposure to future geopolitical shocks. 

The return of energy security

Perhaps the most profound consequence of the crisis has been the return of energy security to the centre of policymaking. Major economies have accelerated efforts to reduce exposure to supply disruption. Europe has intensified diversification strategies, China continues expanding strategic reserves and import corridors, while India, Japan and South Korea are broadening supplier portfolios. 

Maritime infrastructure and shipping lanes have reemerged as instruments of geopolitical influence. Energy security now stands alongside affordability and decarbonisation as a core pillar of energy policy. 

The rise of energy addition

One of the key structural shifts accelerated by the crisis is the emergence of an energy addition paradigm. Global demand continues to rise, driven by population growth, urbanisation, industrialisation, AI, data centres, and electrification. Meeting this demand while maintaining affordability and reliability requires more energy from all sources, rather than substitution between them. Higher prices and security concerns have reinforced the case for continued investment in oil and gas, while also increasing the strategic value of renewables, storage, grids, hydrogen, and carbon management technologies. Rather than competing in a zero-sum manner, oil, gas, and clean energy are expanding in parallel. For Gulf producers, this aligns with existing national strategies. The UAE, Saudi Arabia and others are investing across the entire energy spectrum, reflecting a broader shift toward energy addition rather than energy substitution amidst a broader strategy to enhance  energy security and ensure uninterrupted exports to international markets.

The UAE, for instance, has announced it will accelerate the construction of a new oil pipeline to double its export capacity via the port of Fujairah by 2027, reinforcing the country’s status as a reliable global energy supplier, while strengthening Fujairah’s position as a major international oil hub. The existing Abu Dhabi Crude Oil Pipeline (ADCOP), also known as the Habshan-Fujairah pipeline, can carry up to 1.8 mbpd and has proved crucial as the UAE seeks to maximise exports from the Gulf of Oman coast, just outside the Strait of Hormuz.

The path towards reopening

The US-Iran MoU and subsequent negotiations in Switzerland have increased expectations that Hormuz will gradually reopen and energy flows will normalise. However, the process remains uncertain, with implementation dependent on continued diplomatic progress over the coming weeks. Even under optimistic scenarios, recovery will be gradual. Shipping c ompanies are expected to re-enter the Strait cautiously. Risk premiums must decline, maritime security confidence must return, and backlogged vessels will take time to clear. Unlike the Suez Canal, the Strait of Hormuz lacks a formal convoy or priority transit system, making recovery more dependent on insurer confidence and commercial decisions than structured traffic management.

Historical experience suggests tanker traffic could recover to 70- 80% of pre war levels within several months, while a full return to pre-conflict conditions may take considerably longer.

Historical experience suggests tank er traffic could recover to 70-80% of pre-war levels within several months, while a full return to pre-conflict conditions may take considerably longer. 

How quickly can Gulf production recover? 

Recovery will depend on three factors: the reopening of maritime traffic, the restart of shut-in production and the extent of infrastructure damage. Where facilities remain intact, production could resume within weeks once shipping conditions stabilise. More severely damaged facilities may require months to return to full capacity.

Qatar, one of the world’s largest LNG exporters, is expected to restore output at Ras Laffan gradually, with around half of capacity returning within the first month of improved conditions and up to 80% in the following month. 

However, commercial confidence, shipping availability and insurance conditions are likely to be as important as technical capacity in determining the pace of recovery.

A new energy geography

The crisis has reshaped global energy flows rather than creating clear winners and losers. Non-Gulf producers, including the United States, Norway, Brazil and Guyana, have benefited from higher prices and increased demand for diversified supplies. Several African exporters have also gained commercial interest. For Southeast Asia, the crisis has underscored a structural challenge: how to meet rising energy demand while reducing exposure to concentrated imported risk.

The Gulf’s role in global energy security remains central. However, competitiveness is increasingly defined not only by production volumes, but by reliability, resilience and redundancy.

The Gulf’s role in global energy security remains central. However, competitiveness is increasingly defined not only by production volumes, but by reliability, resilience and redundancy. Alongside strategic investments in new energy infrastructure and hydrocarbon capacity expansion, Gulf states such as the UAE are also increasingly focusing on the full spectrum of energy portfolios and managing an integrated mix of fossil fuels, transition fuels such as LNG, and renewables. The UAE is aggressively expanding into clean energy, AI-driven energy solutions and sustainable technologies, alongside global partnerships that further strengthen its capabilities of delivering energy solutions to countries and customers around the world.

A more fragmented but resilient system

Four months into the crisis, the world has avoided the worst-case scenario. The US-Iran negotiations have reduced the immediate risk of escalation, but uncertainty remains. Over the coming weeks, markets will focus less on geopolitical tension and more on diplomatic implementation, maritime security and the gradual restoration of commercial confidence. 

Reopening the Strait of Hormuz will not restore precrisis energy order. The disruption has accelerated structural shifts in global energy markets, reinforcing the importance of resilience, diversification and strategic redundancy alongside efficiency. 

The emerging energy system is becoming more diversified, more complex and, in many cases, more expensive. Yet it is also becoming more resilient. The defining legacy of the Hormuz crisis may therefore not be disruption itself, but acceleration of a transition already underway towards an energy system shaped equally by security, resilience, diversification, and energy addition.

• This Market Outlook report was produced as a part of ADIPEC’s Energy & Geopolitics series. For more information and coverage, visit: https://www.adipec.com/press-media/insights/

Disruptions to shipping through the Strait of Hormuz following the renewed US-Iran conflict have thrust energy security back to the forefront of global oil and gas markets, marking serious concerns over supply shortages.

As concerns over supply risks grow, countries are investing in alternative trade routes and infrastructure while diversifying sources of crude oil, natural gas, and LNG. Moreover, traders have reported burning through all their buffer stock, creating worries of a supply shortage. In this context, the global oil and gas landscape is being reshaped in ways that could have lasting impressions on producers, consumers, and energy markets alike.

Is there an oil supply crunch?

Global strategic petroleum reserves have been drawn down significantly during the latest Middle East crisis, as governments turned to emergency inventories to stabilise markets and prevent sharper price spikes. The US Strategic Petroleum Reserve (SPR) fell to 316.5 million barrels, the lowest in 43 years, according to Department of Energy data. 

The International Energy Agency (IEA) member countries also coordinated the largest collective emergency oil stock release in the organisation’s history. As of March 2026, IEA members collectively held around 1.8 billion barrels of oil in strategic reserves. 

However, the agency has said that almost three-quarters of the planned 400-million-barrel emergency release announced in March has already been delivered to the market, leaving only a limited volume available before those additional supplies are exhausted.

Emerging economies continue to account for much of the world’s oil consumption growth as industrialisation, transport demand and rising incomes increase fuel use. 

Vandana Hari, Founder of Vanda Insights and columnist for Energy Connects, said, “The US-Iran interim peace deal has not formally collapsed. But it has been overtaken by the very disputes it was supposed to manage, thrusting the oil market back into supply uncertainty less than three weeks after it had begun pricing a return to normality.”

On the other hand, IEA Executive Director Dr Fatih Birol has warned that while advanced economies such as South Korea and Japan have experienced disruptions to Gulf energy deliveries, countries including Bangladesh, Pakistan and India remain considerably more vulnerable to prolonged supply interruptions because of their growing dependence on imported fuels and more limited strategic reserves. 

“The US-Iran interim peace deal has not formally collapsed. But it has been overtaken by the very disputes it was supposed to manage, thrusting the oil market back into supply uncertainty less than three weeks after it had begun pricing a return to normality.”

- Vandana Hari, Founder of Vanda Insights

Local news reported South Korean Prime Minister Han Seong-sook as saying, “We should take instability in international oil prices as a constant and take mid- and long-term steps. We should thoroughly check on the supply situations of crude oil and naphtha and actively seek to use detour routes and diversify supply chains.”

South Korea already convened an emergency meeting on Wednesday to assess its crude supply security in case further disruptions occur. These geopolitical tensions suggest that energy security concerns are becoming central to government policy. 

Is crude going into backwardation?

One of the clearest indicators of tightening supply has emerged in the futures market. Brent crude has moved into backwardation, a market structure in which prompt delivery contracts trade at a premium to contracts for future delivery.

This typically reflects expectations of tighter near-term supplies, with buyers willing to pay more to secure oil immediately rather than wait several months. According to Reuters, the first-month Brent contract traded $8.92 per barrel above the sixth-month contract this week, which is the largest premium since June.  

Such pricing often indicate concerns about immediate physical availability rather than longer-term shortages. European wholesale diesel futures also climbed 14% this week. Diesel remains essential for freight transport, manufacturing, and agriculture, meaning sustained price increase can affect multiple industries.

How are countries expanding supply capabilities? 

The latest supply shock has accelerated efforts by producing countries to diversify export routes and expand production capacity. The US has transformed itself into one of the leading producers and exporters of oil and natural gas, mainly through the growth of shale production. 

American LNG exports have become increasingly important in supplying Europe and Asia, while policymakers continue to view domestic production as a strategic geopolitical asset. Canada is also seeking to strengthen its position in global markets by expanding pipeline infrastructure and export capacity particularly to Asia. 

Meanwhile, Saudi Arabia has invested in its East-West Pipeline, which transports crude oil from the Eastern Province to the Red Sea port of Yanbu, thereby avoiding the Strait of Hormuz. Similarly, the UAE is doubling the export capacity of its Habshan-Fujairah pipeline to roughly six million barrels per day. 

Shipping practices are also evolving. During the recent conflict, some tankers travelled through the strait with their tracking transponders switched off to reduce security risks. Countries like China have expanded domestic crude storage, which has spent years building large strategic petroleum reserves.

Where does natural gas fit into the equation? 

Natural gas has emerged as both a lower-carbon alternative to coal and as a flexible source of power generation that complements renewable energy. As more countries expand wind and solar capacity, gas-fired power plants continue to provide the reliability needed when renewable output fluctuates.

Demand growth is expected to remain particularly in Southeast Asia, where the region continues to increase LNG imports. According to Shell’s latest LNG Outlook, global LNG demand could approach 700 million tonnes annually by 2050, driven by industrial growth, power generation, and energy security. 

Shell added that around 180 million tonnes per annum (mtpa) of new liquefaction capacity will come online by 2030, led by projects in North America and Qatar. The recent disruptions in the Middle East have also reinforced Europe’s need to diversify supply sources, forcing it to make tough decisions. 

Why is Europe still buying Russian gas?

Despite political commitments to reduce dependence on Russian energy, Europe continues to import significant volumes of Russian LNG. As Europe prepares for another winter with rising energy prices, it is hesitant to eliminate a key source of supplies before alternatives are available.

European companies also remain tied to agreements signed years ago, including contracts linked to Russia’s Yamal LNG project, in which France’s TotalEnergies holds interests. Exiting these agreements will be complex. The European Union has announced plans to phase out Russian fossil fuel imports by 2027. Until then, Russian LNG will continue to enter European markets.

What does the future hold for both producers and buyers? 

Major exporters are racing to expand production. Qatar continues to increase LNG capacity through its North Field expansion, while the US is adding new export terminals along its Gulf Coast. Canada is vying for entry into Asian markets, by proposing a one-million-barrel-a-day pipeline from Alberta to Japan, Korea, China, and India via its Vancouver port. 

The UAE is pursuing plans to raise its oil production capacity to 5 million barrels per day while investing heavily in both upstream production and LNG. New suppliers are also entering the market. Argentina’s Vaca Muerta shale formation is attracting substantial investment, adding another source of supply diversification for global buyers.

Standalone battery storage systems averaged 299 cycles of charging and discharging a year in 2025, more than double the level in 2022, Ember analyst Biqing Yang said in the report on Thursday. Co-located systems, in which batteries are installed alongside wind and solar farms, also more than doubled their utilization to 199 cycles.

The gains reflect a broader shift in China’s battery storage industry. After years of requiring many renewable projects to install batteries, Beijing is increasingly relying on market-based mechanisms that let storage operators earn revenue by providing services to the power grid. While the earlier mandate helped the industry expand, it left many batteries underused because they were installed mainly to satisfy regulations.

“As the power system integrates more renewables, the true value of batteries to China’s energy transition is becoming undeniable,” Yang said. 

China added a record amount of new battery storage facilities in 2025, ending the year with more than half of global capacity. Growth has continued this year, with installed lithium-ion battery storage reaching almost 150 gigawatts by the end of the first quarter, according to Ember. The country is targeting 300 gigawatts of battery storage capacity by 2030, up from 136 at the end of 2025, in addition to expanding its fleet of longer-duration pumped hydro storage to around 160 gigawatts from 66.

The government ended co-location requirements last year and most new battery storage projects are now standalone systems that can earn revenue through a variety of ways, such as by purchasing electricity when prices are low and selling it when they rise.

Still, China can do more to improve utilization as its systems still fall short of the internationally recognized benchmark of about 350 cycles a year, Yang said. If they had reached that level last year, they could have captured and stored an additional 23 billion kilowatt-hours of renewable electricity, enough to power Singapore for about five months.

©2026 Bloomberg L.P.

European Commission President Ursula von der Leyen first floated the ETS Investment Booster in March as part of its Emissions Trading System reform due later this week, with details to be announced later. The European Commission now plans to propose a decade-long framework for companies to use support under the booster, people familiar with the matter said, asking not to be named discussing non-public information. 

The 10-year time frame will likely allay concerns that the carbon market could be flooded by allowances in the short term, while offering companies more leeway to adapt to less polluting technologies. 

The ETS reform has risen to the top of the EU political agenda as energy-intensive industries such as steel and chemical makers struggle to compete with peers in China and the US. Some governments and industry groups are concerned that carbon costs are adding to already high prices for power and gas. 

The EU will propose allocating 400 million emission allowances based on a fixed carbon premium to selected firms that pursue decarbonization projects. The permits from the ETS Investment Booster will be released periodically to the companies after their projects become operational, for a maximum of 10 years, the people said. 

The booster will be the first stage of Europe’s planned Industrial Decarbonization Bank, with a total of €100 billion in carbon market-based funding. The 400 million allowances in the booster will come from an existing buffer of free permits, and if it has fewer permits than needed, the EU will top it up with certificates from a special reserve for new entrants, according to the people.

The commission, which is due to unveil the carbon market reform on July 17, declined to comment. The proposal may still change before adoption. 

The support program will be granted on a first-come, first-served basis, with allowances to be reserved for the projects between 2028 and 2030. The commission and several member states have already signaled they will want to bring the starting date forward to 2027, as they plan to finish legislative work on the proposal as soon as in the first quarter of next year. 

The EU’s executive arm will publish the exact conditions for the projects later this year, including the eligibility criteria and fixed premium rate per metric ton of avoided emissions.

To apply, companies will need a completion bond, which is a form of performance guarantee, to be issued by a financial institution, according to the people. Construction of projects will have to start within 30 months and once they start operations, they will get allowances periodically over up to a decade following an independent verification of emissions avoidance.

To calculate the allocation, the commission will take into account the avoided emissions, the premium rate and the price of carbon permits at auctions.

©2026 Bloomberg L.P.

The higher revenue from data centers will be used to pay for public electricity costs, such as streetlights, Deputy Interior Minister Polapee Suwunchwee told reporters after Wednesday’s meeting by the energy policy committee chaired by Prime Minister Anutin Charnvirakul. 

The Energy Regulatory Commission will determine the rate for data centers as early as the August billing, the official said. 

The plan comes as Thailand seeks to win billions of dollars of investment in AI infrastructure and hyper-scale data centers while limiting the impact of their rapidly rising electricity demand on its citizens. Alphabet Inc.’s Google, Amazon.com Inc., Microsoft Corp. and ByteDance Ltd.’s Tiktok are among tech giants investing in Thailand to tap rising demand for AI and cloud computing. On Wednesday, the Board of Investments said US semiconductor company Analog Devices Inc. plans to nearly double its workforce in Thailand and increase exports from the country.

Thailand’s move to make data centers pay more for electricity follows a widening trend globally. In the US, Portland General Electric raised power prices for data centers by about 30%, while large data centers in California may soon be required to pay surcharges to cover the cost of increased energy demand they generate under a bill aimed at helping offset the extra cost data centers impose on communities.

The committee also approved expanding the direct power purchase agreement framework to cover a broader range of industries seeking access to clean electricity, according to the energy ministry statement. 

Previously focused on data centers, the program will now also cover other industrial users with demand for clean energy. The expanded framework will enable eligible businesses to procure renewable electricity directly from generators, helping them meet increasingly stringent international trade and sustainability standards that emphasize the use of clean energy.

The move is also intended to open Thailand’s clean electricity market and promote greater competition in the power sector, the ministry said.

©2026 Bloomberg L.P.

At least 11 million barrels of US crude were sold to Asia late on Tuesday, and more deals may follow, according to traders. The buyers included refiners in South Korea, Japan and Thailand and some of the oil may load as soon as this month, they said, asking not to be named as they’re not authorized to speak to the media.

The upsurge in interest follows a hiatus when the trade went quiet due to waves of backlogged supplies from the Middle East hitting the spot market. Those flows are now under threat as the ceasefire between the US and Iran looks all but over.

The purchases came after at least three executives involved in selling US crude and procuring for Asian processors told Bloomberg they have once again started to negotiate for spot sales of American cargoes, asking not to be named as they’re not authorized to speak publicly.

The sudden spurt in US oil buying also coincided with a rally in Middle Eastern crude prices, which narrowed the price differential between the two regions.

Attacks on ships have increased in recent days, while Washington reimposed a blockade of Iranian ports. The deteriorating situation has upended shipping and oil markets, which had, until recently, been busy recalibrating as they adjusted to a recovery in energy flows from the Gulf. As of Wednesday, there was only a trickle of observable traffic going through Hormuz, although Iran has been sneaking crude tankers out of the gulf with their transponders turned off.

©2026 Bloomberg L.P.

Barito has made a non-binding cash offer that gives First Gen Corp.-backed EDC an equity value of more than $5 billion, according to the people. Including debt, EDC could reach a valuation of up to $7 billion, the people said, asking not to be identified discussing confidential information.

First Gen shares rose as much as 33% in Manila, their biggest intraday gain since the initial public offering in 2006, lifting the market capitalization to roughly $1.3 billion. Barito Renewables gained up to 3.6% in Jakarta, before paring some of the gains. Its stock has dropped more than 60% this year, giving the company a market value of almost $26 billion.

An acquisition of EDC may potentially rank as one of the largest renewable energy deals in Asia in recent years, according to data compiled by Bloomberg. It would also be among the biggest ever takeovers in the Philippines, the data showed.

The companies have been working with advisers on the potential deal, the people said, adding that deliberations are ongoing and there’s no certainty they’ll result in a transaction.

Barito Renewables is part of Barito Pacific Group. Its assets include geothermal and wind power plants, which are operated by different subsidiaries.

EDC’s backers also include Macquarie Asset Management and Singaporean wealth investor GIC Pte. The company voluntarily delisted from the Philippine Stock Exchange in 2018.

Representatives for Barito, EDC and First Gen didn’t respond to requests for comment. Macquarie Asset Management and GIC declined to comment.

First Gen, controlled by the Lopez family, is a Philippines-based clean energy company with assets spanning geothermal, hydro, wind, solar and natural gas.

©2026 Bloomberg L.P.

The collaboration combines SLB’s expertise in modular infrastructure and global project execution with Liberty Energy’s capabilities in modular power generation, behind-the-meter intelligent power controls, and operations.

Together, the companies aim to help developers deploy new data centre capacity faster while overcoming power supply constraints.

Quicker project turnaround 

The rapid expansion of AI is driving unprecedented demand for data centres, placing increasing pressure on electricity infrastructure.

As a result, developers are increasingly turning to behind-the-meter power solutions that can operate independently of traditional grid connections, enabling faster project delivery while improving reliability and operational flexibility.

“The bottleneck in AI infrastructure is no longer just compute. It is the ability to deliver infrastructure and power on the timelines the market now demands,” said Gavin Rennick, President of SLB’s New Energy and Industrial business.

“By bringing together complementary infrastructure and power capabilities, we will help developers accelerate deployment of new data centre capacity,” Rennik added. 

Meeting evolving needs

Under the agreement, SLB will provide modular infrastructure solutions, project execution expertise, and global market access, while Liberty Energy will contribute modular power generation systems, intelligent behind-the-meter controls, and operational support.

Ron Gusek, Chief Executive Officer of Liberty Energy, said the alliance reflects the changing requirements of AI-driven infrastructure. “The scale and complexity of AI energy infrastructure is fundamentally changing how power systems are built and deployed,” he said.

“Building on our long-standing relationship with SLB, we are excited to bring power solutions that address immediate capacity constraints while supporting the next generation of energy systems,” Gusek added. 

Beyond infrastructure deployment, the companies also plan to collaborate on technologies designed to improve the efficiency, flexibility, and environmental performance of future data centre energy systems.

Areas of focus include hybrid power systems, digital energy management platforms and advanced power architectures.

The partnership builds on SLB’s growing presence in the sector. Since April 2024, the company has shipped more than 1.3 GW of prefabricated modular infrastructure for data centre projects and expects cumulative global deliveries to exceed 2 GW by the end of this year.

Liberty Energy, meanwhile, plans to deploy approximately 3 GW of power projects by 2029, supporting the continued expansion of AI and high-performance computing infrastructure.

Over the past decade, this has significantly improved coordination, consistency, and digital delivery across the industry. As BIM continues to mature, the next opportunity is ensuring that it not only fulfills contractual requirements but also improves how decisions are made.

Saudi Arabia has become one of the world's leading catalysts for digital engineering transformation. Through Vision 2030 and PIF's portfolio of mega and giga projects, the Kingdom has accelerated the adoption of BIM at an unprecedented scale, setting new benchmarks for engineering excellence and digital delivery.

That distinction, between BIM as a submission and BIM as a way of working, remains one of the industry's most significant challenges. On large and complex projects, it is not simply a matter of efficiency. It directly affects project performance, delivery outcomes, and long-term asset value.

The compliance ceiling

BIM maturity and BIM value are not the same thing. A project can score well on every maturity indicator, including model coverage, coordination protocols, clash detection, and information management, and still leave the asset owner with a digital handover that offers further opportunities to strengthen operational readiness and long-term value.

This remains one of the industry's next areas of focus as organisations continue to advance their digital delivery capabilities. The reason is that BIM was framed, from the outset, as a documentation requirement.

Models must be produced, information must meet defined standards, and deliverables must be submitted at prescribed stages. Compliance establishes consistency. However, compliance should be viewed as the foundation rather than the destination. The next stage of maturity is ensuring that compliance also delivers measurable business value.

Ultimately, BIM delivers its greatest value when it moves beyond demonstrating compliance and becomes an integral part of how projects are planned, delivered, and managed.

The more important question is not whether a model was produced, but whether it changed how decisions were made. Did the model shape decisions, or simply record them after the fact? Were project teams able to rely on a single trusted source of information? Did field teams have timely access to the latest project information to support informed decisions?

Ultimately, BIM delivers its greatest value when it moves beyond demonstrating compliance and becomes an integral part of how projects are planned, delivered, and managed.

From design output to delivery platform

The next stage of BIM maturity is treating information as a project control asset rather than a design output. This means using BIM to improve predictability, strengthen decision-making, and enhance delivery performance throughout the project lifecycle.

Ultimately, owners do not invest in BIM for its own sake. They invest because better information reduces uncertainty, improves predictability, strengthens project controls, and enables better investment decisions throughout the asset lifecycle.

In that sense, BIM is not simply a digital engineering capability. It is an engineering and business enabler.

This includes testing construction sequencing through 4D planning before execution begins. It includes linking progress monitoring to field-verified information that updates schedules and forecasts in near real time. 

It also includes managing interfaces, risks, and construction constraints through a connected digital environment rather than disconnected workflows.

This is the principle behind Virtual Design and Construction (VDC). BIM no longer serves only as a representation of the project; it becomes an active platform for planning, coordination, monitoring, and control.

BIM no longer serves only as a representation of the project; it becomes an active platform for planning, coordination, monitoring, and control.

When effectively implemented, BIM supports better schedule certainty, improved productivity, stronger risk management, and greater visibility across the project lifecycle.

The foundation is data governance

Achieving this level of integration requires more than a software investment. The foundation for achieving this vision is trusted information through effective data governance.

Classification systems, naming conventions, common data environments, information ownership, and quality assurance processes determine whether project information can be trusted and used effectively. These fundamentals enable digital environments to remain connected, consistent, and trusted throughout project delivery and into operations.

Reliable information is what transforms BIM from a coordination tool into a business enabler. It provides decision-makers with greater visibility, supports executive reporting, improves project controls, and creates the confidence needed to support future digital capabilities across the asset lifecycle.

The handover challenge

Even on projects where BIM is actively used during construction, handover represents one of the greatest opportunities to maximise the long-term value of digital information. As projects become increasingly complex, ensuring that handover information is fully structured, validated, and readily usable within operational systems has become an important focus for industry.

For asset owners, the true value of BIM is realised when project information seamlessly supports operations from day one. For them, handover is not the end of a project. It is the beginning of an asset's operational life.

This is particularly important on mega and giga projects, where assets are expected to operate for decades and support entire communities, industries, and economies. The quality of information delivered at handover directly influences operational readiness, lifecycle performance, maintenance efficiency, and future investment decisions.

The industry has made significant progress in digital delivery. The next step is to ensure that this information continues to deliver value throughout the operational life of the asset.

Why this matters for Saudi Arabia

Through Vision 2030 and PIF's portfolio of mega and giga projects, Saudi Arabia is delivering some of the world's most ambitious and technologically advanced construction programs. The scale, complexity, and long-term impact of these projects make the conversation around BIM increasingly important.

The industry has already demonstrated the value of BIM adoption. The next opportunity is to build that foundation by unlocking greater intelligence, operational insight, and long-term value from project information.

The path from BIM to digital twins, connected assets, and AI-enabled operations is becoming increasingly clear. However, these capabilities depend on one critical prerequisite: trusted data.

The path from BIM to digital twins, connected assets, and AI-enabled operations is becoming increasingly clear. However, these capabilities depend on one critical prerequisite: trusted data.

Artificial intelligence, predictive analytics, and digital twins will continue to unlock new opportunities as organisations strengthen the quality and governance of their information foundations. Information quality is the foundation upon which successful digital transformation is built.

As Saudi Arabia continues to shape the next generation of infrastructure, cities, and industrial assets, the ability to create trusted digital foundations will become a defining factor in long-term success.

Beyond better models

At Nesma & Partners, we see BIM as a strategic engineering capability that supports delivery excellence across the entire asset lifecycle. Realising that vision requires more than digital tools.

It requires trusted information, disciplined governance, and engineers with the capability to transform data into better decisions. That belief shapes not only how we deliver projects, but also how we develop future engineering capability.

Through our Early Graduate Programme, we are investing in the next generation of Saudi engineers, equipping them with digital engineering, BIM, and integrated project delivery capabilities so they can contribute to increasingly complex projects from the outset of their careers and help advance the Kingdom's long-term infrastructure ambitions.

Our focus is not on BIM maturity for its own sake. It is about ensuring that information continues to create measurable value through stronger project controls, improved delivery performance, and better outcomes for our clients and asset owners.

The measure of success is not whether a model was submitted. It is whether the information behind it improved decisions, strengthened project outcomes, and left owners with a foundation they can continue to build upon long after construction is complete. The future of BIM is not about better models. It is about better decisions.

PJM Interconnection LLC, which serves 13 states and Washington, DC, said Tuesday that its auction to procure power for the year starting June 2028 tied a $16.4 billion record set in late 2025. Data centers accounted for roughly $6.3 billion of that total, said Joseph Bowring, president of Monitoring Analytics, the grid’s independent market monitor. 

That data-center burden on PJM ratepayers amounts to almost $30 billion when figures from three previous auctions are included, he said during an interview. 

Meanwhile, the auction failed for a third straight time to secure enough future supply commitments to ensure reliability in coming years, underscoring the scale of the challenge posed by the artificial intelligence boom.

The failure to meet the reliability target is “not an acceptable way to go forward,” Bowring said. The grid needs to run an auction specifically for data centers so that consumers aren’t on the hook for the extra costs, he added.

The auction fell 6.8 gigawatts short of what PJM will need to guarantee system reliability during demand spikes. The shortfall is equivalent to almost seven traditional nuclear reactors.

“This year’s auction confirms an unacceptable trend: data center load growth is outpacing new electricity supply, degrading reliability, and keeping prices at the cap,” Claire Lang-Ree, a climate and energy advocate with the National Resources Defense Council, said in a statement. New power supplies “simply can’t keep up with the pace of data center load growth, and everyone is paying the price.”

The result ramps up the pressure on a grid that’s home to Virginia’s Data Center Alley and has borne the brunt of criticism for the struggle to manage the AI boom and sufficiently protect customers from soaring costs. Attention now shifts to an emergency procurement mechanism later this year that aims to shift the burden of ramping up power generation to hyperscalers.

“Such a shortage does not necessarily mean that the PJM system will be unable to serve load reliably in the delivery year,” the grid operator said in a statement. “It means that PJM would have to operate with slimmer reserves and a greater level of risk.”

The results released Tuesday show the daily cost of those payouts hit the price ceiling of $325 per megawatt-day, which will show up in users’ monthly utility bills.

Without the cap, the auction would have cleared at $554.72 for a total cost to ratepayers of almost $30 billion, PJM said. Prices in the Chicago area would have cleared at more than $775.

A searing heat dome earlier this month showed just how close the PJM grid is to reaching its limits, with power demand likely surpassing a record that had stood for over two decades. Without urgent action, the grid risks further deterioration with demand outstripping oncoming supply.

PJM already was under intense scrutiny with data centers and power generators saying they are not being connected fast enough as consumer groups and politicians hammer the grid for spiraling power bills. Those concerns are likely to come to a head at a July 23 conference called by the Federal Energy Regulatory Commission to discuss grid governance.

The latest auction result, intended to guarantee enough capacity is available for the few hours in a typical year when demand peaks, will also put further onus of an emergency measure slated for later this year to fill the supply gap and ensure data centers pay.

“PJM customers are left to pay high capacity costs while also facing the risks of undersupply,” Drew Maloney, president of the Edison Electric Institute, said in a statement. “America’s electric companies are working every day to lower costs and keep electricity as affordable as possible, but we need swift reform, in addition to the extraordinary measures currently underway, to get more power infrastructure of all types built across the region.”

PJM has yet to submit its proposal for exactly how that will work, but the process is set to get underway in September after heavy pressure from the White House and state governors. To meet that deadline, the grid operator will have to make a filing at FERC before the end of this month.

Costs would be even higher if not for the price cap first negotiated in 2024. While that has helped keep a lid on costs, PJM has noted that there’s a downside in that it deprives the market of a price signal to induce new plant construction.

PJM Chief Executive Officer David Mills recently described the situation as “untenable.”

PJM power prices jumped 76% during the first quarter due to rampant demand from data centers, according to a report from Monitoring Analytics, the grid’s independent market monitor.

©2026 Bloomberg L.P.