Energy markets went into another spiral today after Iran bombed the world’s largest natural gas export facility. But the economic toll didn’t spread equally.
European natural gas futures rose by about 14 percent after Wednesday’s bombing of the Ras Laffan Industrial City in Qatar, according to data from Trading Economics analysts. Prices at both Asian and European trading hubs have been climbing all day, Jacques Rousseau, managing director of ClearView Energy, told me in an interview.
Prices in the U.S., however, have hardly budged.
That’s because the U.S. is insulated by the decadeslong fracking boom that has made it the world’s largest producer and exporter of natural gas. (It churned out a whopping 39 quadrillion British thermal units of the stuff in 2024, according to the Energy Information Administration, compared with 24 quadrillion Btus from second-ranked producer Russia.)
“By and large, the U.S. is not impacted by global gas markets, other than that it’s helpful for prices shipping out gas,” Rousseau said. “In the U.S., companies are benefiting from higher global gas prices.”
Oil and gasoline prices are an entirely different matter — even though the U.S. is also the world’s largest producer of crude. That’s because U.S. prices for those fuels follow the rise and fall of the global market.
Benchmark crude prices in the U.S. remained above $90 per barrel on Thursday, up from $67 just before the U.S. and Israel attacked Iran last month. Gasoline prices have risen to a national average of $3.88 a gallon, according to AAA, up from under $3 before the war began.
As Gregory Svirnovskiy and Ben Lefebvre write, Trump administration officials are floating the idea of lifting sanctions on some Iranian oil to try to bring those prices down. But Interior Secretary Doug Burgum assured oil executives today that the administration will not ban or limit U.S. oil exports, Sophia Cai and Ben report.
The natgas split screen
Natural gas prices in the U.S. are hovering around $3 per million Btus, according to the EIA, compared with more than $20 per million Btu in Europe and Asia.
That disparity is thanks to the massive amounts of natural gas the U.S. produces for both domestic use and for liquefied natural gas exports. Those exports are in even more demand now that Iran has blocked gas shipments through the Strait of Hormuz, the conduit for about 20 percent of the global LNG supply — sending gas prices for Europe and Asia into the stratosphere.
The Federal Energy Regulatory Commission is looking to increase U.S. LNG export capacity to fill the gap. FERC Chair Laura Swett told my colleague Carlos Anchondo today that the agency is looking at “slashing burdensome processes” in order to “get the critically needed infrastructure built and online as quickly.”
“That increase in supply that will result from the actions that we take should drive prices down,” Swett said.
Happy Thursday, and thanks for reading POLITICO’s Power Switch. I’m your host, Shelby Webb, reporting from sunny Houston, Texas. I’m part of a new POLITICO team dedicated to covering energy in the Lone Star State.
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The Iranian island in Trump’s crosshairs
President Donald Trump is targeting a tiny island responsible for virtually all of Iran’s oil exports, writes Scott Waldman.
“We can knock out their oil in Kharg Island,” Trump told reporters Tuesday. “The only thing we didn’t take down was the oil, because if we knock out, I call them the pipes, very complex, but if you do that, it will take them forever to rebuild.”
Attacking the island holds enormous risks, including soaring crude oil prices and worldwide recession if it leads to a widening conflict in the Middle East. Scott lays out how four possible scenarios could unfold.
The ever-shrinking federal workforce
The Trump administration’s “deferred resignation program” led to more than 10,700 employees leaving the Environmental Protection Agency and the Interior and Energy departments, Robin Bravender writes.
The data — recently published by the Office of Personnel Management — offers the clearest picture yet of the extent of the administration’s workforce reductions across the federal government. More than 136,000 federal workers left their jobs after the administration offered them incentives to do so.
When going green pays
Several leaders of green groups earn near or more than $1 million, Robin writes.
The latest publicly available tax records reveal the top-earning executives among major environmental and conservation groups. The Environmental Defense Fund’s 2023 filing puts total compensation for President Fredd Krupp at $1.3 million. Carter Roberts, president and CEO of the World Wildlife Fund, earned $1.29 million in 2023, while National Audubon Society CEO Elizabeth Gray received about $952,000.
This is fine: Many of the consequences of global warming, such as more intense storms and melting glaciers, are arriving faster than many scientists had expected.
Chaos incoming: A Western heat wave and possible El Niño event could set the stage for a long stretch of unpredictable and extreme weather.
A showcase of some of our best subscriber content.
The widening attacks on energy infrastructure in the Middle East have created a rift between the White House and its Gulf allies while increasing fears of a global recession.
Italy and Belgium are set to lose their natural gas supply after Iran bombed the Ras Laffan gas plant in Qatar.
Two dozen Democratic-controlled states are challenging the Trump administration’s repeal of EPA’s greenhouse gas endangerment finding.
That’s it for today, folks! Thanks for reading.
