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By David Gaffen, Editor, Energy Markets

Hello Power Up readers! The markets have become more concerned about the escalation of attacks in the Middle East against shipping channels and in general, with oil rising over the last few days. Whether this will amount to something of an ongoing diversion or more serious disruptions isn’t easy to determine – but it is at top of mind for the oil market right now. Here’s what’s happening:  

Today’s top headlines:

• Activist investors fret over Exxon Mobil’s lawsuit bypassing US regulator
• Nigeria oil enters unclear new era after Shell’s onshore asset sale
• QatarEnergy, Excelerate Energy sign 15-year supply contract for LNG

That’s the Marlin Luanda, a merchant vessel, on fire after being hit by a Houthi anti-ship missile in Gulf of Aden. (@indiannavy via X/Handout via REUTERS)

The oil market has been rising in recent days with concerns growing after Yemen’s Houthi rebels on Friday stepped up attacks on vessels transiting the Red Sea, as Reuters reports here. One attack hit a fuel tanker operated on behalf of trading firm Trafigura – which was carrying Russian naphtha that was bought in line with G7 sanctions, a Trafigura spokesperson said. 

Oil vessels have kept using the Red Sea route because many of those transiting were not targeted by the Houthis, who have been concentrating on U.S., U.K. or Israel-affiliated ships, particularly container tankers. However, this attack prompted the vessel Free Spirit, chartered by Vitol to carry crude oil, to turn around before reaching the Gulf of Aden, shortly after the attack on the Marlin Luanda, according to data from LSEG. 

Crude prices have been elevated in recent days – with Brent nearing $84 a barrel, its highest in several weeks, a signal that traders are starting to worry about more near-term problems as major world nations attempt to contain fallout from the Gaza-Israel conflict. 

That’s a big LNG tanker. Yeah, they’re massive. REUTERS/Issei Kato/File Photo

The Biden administration has put approvals for pending and future applications to export liquefied natural gas (LNG) on hold, which cheered by climate activists even though some warned that it would hurt U.S. strength in this market, as the nation has become one of the largest LNG exporters worldwide.  

The decision could keep action from taking place until after the Nov. 5 election, as Reuters reports here, as it will involve review that will take several months. However, short-term supply isn’t likely to be affected, as the U.S. is now the largest exporter of LNG and there are other projects under construction that has added to U.S. capacity already. Europe has been taking in more imports from the U.S. as it weans itself off Russia’s gas. 

Administration officials vowed that the pause would not hurt allies, as it has an exemption for national security should they need more LNG. 

That’s the logo of the Organization of the Petroleum Exporting Countries (OPEC), outside its headquarters in Vienna. REUTERS/Leonhard Foeger/File Photo

The group of oil exporters known as OPEC+ will likely make a decision on oil production levels for April and beyond in coming weeks, Reuters reports here, citing OPEC+ sources, as a coming ministerial meeting would likely be too soon to figure out where the cartel is going on policy.  

The group will meet online during this week – but the decisions on whether to extend cuts of 2.2 million barrels per day past the first quarter will come down the road. In general, when the group has decided to extend voluntary cuts, it has done so about a month in advance, so it could be a few more weeks before OPEC+ makes a firm determination.  

Natural gas! The German flag! It’s pretty simple. REUTERS/Dado Ruvic/Illustration

The European Commission is looking to its energy regulator ACER to examine whether a tariff Germany put on its natural gas exports is a possible breach of competition rules, as Reuters reports here. The tariff stems from the European energy crisis that peaked in 2022 after Moscow cut gas flows to Europe following its invasion of Ukraine. Berlin had to fill its stocks up in advance of the winter – but the cost of that left it with a bill of nearly 10 billion euro ($10.84 billion) to deal with. 

Germany still needs to recover 8.5 billion euros – but regulators were against the levy in the first place, and other nations are getting sourer about it, with Italy and Austria recently complaining about the tariff, suggesting as well that they may end up imposing their own fees also.

“If companies are now leaving the less capital-intensive onshore operations to focus on offshore operations, it sends a perfect picture of the risk involved in doing business in Nigeria.”  

Seyi Awojulugbe, senior analyst at SBM Intelligence in Lagos, on the country’s recent production issues. 

U.S. liquefied natural gas company Freeport LNG said on Friday that one of three liquefaction units at its Texas plant will be out of service for about a month, as Reuters reports here, due to technical issues that came up after the recent deep freeze across the state.  

It’s the latest in a series of incidents at the plant – which shut for eight months from June 2022 to February 2023 following a fire and explosion. Since April, at least one liquefaction train at the plant has shut or tripped – sometimes several times, according to company filings with state environmental regulators. “One of our refrigeration electric motors at our liquefaction facility experienced an electrical issue that will necessitate a replacement of the motor with an on-hand spare,” the company told Reuters about the latest incident in an email. 

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