Daily on Energy: An exclusive chat with Chris Wright, Cuba runs out of oil, and where gas prices stand

QUOTE OF THE WEEK: Following the passage of a House bill for year-round E15, Republican Sen. John Barrasso of Wyoming expressed opposition to the measure, arguing it would harm small oil refineries. 

“I oppose a year-round E15 mandate. I oppose it because it hurts small refineries and all of the people around the country who work in these small refineries,” Barrasso said on the Senate floor earlier this week. 

“Small refineries have been ignored so far in the current E15 debate. It is time for their voices to be heard,” he added. “Affordable, available, reliable American energy never comes from a one size fits all government mandate, comes from regulatory certainty, from permitting reform, and it comes from people who are working hard every day, like our Wyoming energy workers.” 

EXCLUSIVE – A CHAT WITH CHRIS WRIGHT: Earlier this afternoon, Callie had a chance to speak with Energy Secretary Chris Wright as he wrapped up a trip to Texas and Louisiana touting the administration’s efforts to increase exports of liquefied natural gas. 

The trip comes as the war in Iran continues, leaving the U.S. in a position of opportunity to help European and Asian nations reduce their dependence on the Strait of Hormuz for oil and gas imports. 

The war has been hallmarked by surging oil, jet fuel, and gasoline prices across the world. At the end of April, Wright told Congress that gasoline prices seemed to have already peaked, a prediction he walked back today. 

“A few weeks ago, I said it ‘appears’ because we had hit a peak and gas prices started to pull down,” he said. “It looked like we may have a resolution, but you know we are dealing with the Iranians, everything is unpredictable.” 

While he steered clear of offering any timeline, Wright acknowledged that gasoline prices will not come down significantly until the Strait of Hormuz fully reopens. 

“When gasoline prices start to go down depends on when we get traffic flowing the Strait of Hormuz,” he said. 

An opportunity for Alaska: While the administration looks to leverage the United States’ Gulf coast to increase energy exports to Europe, Wright also indicated today that Alaska could play a key role in diversifying oil and gas imports across Asia. 

Wright pointed to the lease sale held in the National Petroleum Reserve of Alaska back in March, which brought in historic levels of bidding from oil majors. 

“I think we’ll see more than a doubling in Alaskan oil production over the next five or six years, and that will have, yeah, very, very welcome buyers across Asia,” he said. 

Stay tuned for more from Callie’s interview with the secretary later today. 

WHERE PRICES STAND: As we close out the week, oil prices remained fairly elevated with both Brent Crude and West Texas Intermediate staying above the $100 per barrel line. Just after 3 p.m. EDT, Brent was up 3.41% and selling at $109.33 per barrel. WTI had also jumped 4.20% and was priced at $105.42 per barrel.

Analysts like Peter Cardillo with Spartan Capital have pointed out that while China has agreed with the U.S. that Iran cannot obtain a nuclear weapon, and will increase energy purchases from the U.S., the overall situation in Iran remains unresolved. And with the Strait of Hormuz still closed, there is only one direction prices can go: up. 

As for gasoline, those prices appeared to plateau this week, with AAA reporting the national average price to be $4.528 a gallon, down from $4.546 one week ago. Diesel, however, is still ticking upwards. As of Friday, AAA reported the national average price of diesel to be $5.662 a gallon, just shy of the 2022 record of $5.816 a gallon. 

UAE SETS PLAN TO DOUBLE CRUDE EXPORTS: The United Arab Emirates has revealed that it is constructing a second pipeline to double its ability to export oil around the Strait of Hormuz.

At a board meeting earlier today, Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin ⁠Zayed instructed the state-owned Abu Dhabi National Oil Company, the Emirati government said. The West-East Pipeline is now expected to be completed sometime next year.

The new pipeline would allow the UAE to export its current full capacity by land. The country produces 3.2 to 3.6 million barrels per day under the former OPEC quota, which the UAE left at the start of the month.

‘DRILL, BABY, DRILL’ UPDATE: Higher oil prices appear to be boding for the domestic oil industry as the number of active oil and gas rigs operating in the U.S. ticked up by three this week. 

Data released by Baker Hughes this afternoon shows that the total number of active oil and gas rigs in the U.S. is 551, just 25 fewer than this time last year. Specifically, Baker Hughes found that four land rigs were brought on while one offshore rig was taken offline, bringing the total number up by three. 

IMPROVEMENTS IN CHINESE RARE EARTHS EXPORTS: U.S. Trade Representative Jamieson Greer said exports of Chinese rare earths to the U.S. are improving but Beijing is still slow to approve shipments. 

“We’ve certainly seen the rare ⁠earths come back up to better levels. Sometimes it’s slow. There are times when we have to go and make our point,” Greer told Bloomberg Television in China. 

As a reminder: China last year imposed export controls on rare earths in response to the president’s sweeping tariffs. Last October, the U.S. and China reached an agreement to allow shipments of some rare earths to the U.S. 

CUBA RUNS OUT OF OIL AND CIA TAKES A VISIT: CIA Director John Ratcliffe led a U.S. delegation yesterday to Havana to meet with Cuban government officials amid a growing energy crisis on the island. 

A CIA official told Reuters that Ratcliffe delivered a message to Cuban officials, stating that the U.S. would “seriously engage” with their government on economic and security concerns, but “only if it makes fundamental changes.” 

The visit from Ratcliffe comes as Cuba has run out of fuel. 

“The sum of the different types of fuel: crude oil, fuel oil, of which we have absolutely none; diesel, of which we have absolutely none … the only thing we have is gas from our wells, where production has grown,” Cuban Energy Minister Vicente de la O Levy said on state media earlier this week. 

The energy crisis in Cuba has prompted rolling blackouts across the island and raising prices on food and other essential supplies. 

The Trump administration since January has blocked fuel from entering Cuba, resulting in the fuel supply to run low. Russia sent two ships last month with fuel but those supplies did not last long. 

Meanwhile, the Justice Department is preparing to seek an indictment against former Cuban President Raúl Castro over his alleged role in the 1996 shootdown of four planes operated by the Miami-based exile group Brothers to the Rescue, the Associated Press reports.

Associated Press Iran war energy shock drives interest in ethanol and other biofuels across hard-hit Asia