Political Wire

Chevron Will Explore Creating Strait of Hormuz Alternative

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“Chevron intends to sign preliminary deals Friday to invest in two Iraqi oil fields and will join a consortium of investors exploring the construction of a pipeline to connect Iraq’s oil patch with the Syrian coast,” the Wall Street Journal reports.

“Iraq and other Middle East oil producers are scrambling for alternatives to the Strait of Hormuz, which Tehran has sought to shut down and put it under its control, triggering a U.S. military response. About 20% of the world’s oil transited the waterway before the Iran war began.”

GOP Governors Back Trump Grid Cost Pledge

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“President Donald Trump is expanding his data center pledge to include some Republican governors and several large utilities, according to state officials and industry executives,” Politico reports.

”Montana Gov. Greg Gianforte, Wyoming Gov. Mark Gordon and Missouri Gov. Mike Kehoe have all signed the White House’s so-called Ratepayer Protection Pledge, a set of principles committing data center developers to pay for their fair share of energy and water use, along with electric grid improvements and maintenance, according to officials in each state. Electric utilities are also expected to sign the pledge.”

How Oil Producers Are Bypassing the Strait of Hormuz

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“The oil market’s top players aren’t waiting around to see who winds up with control over the Strait of Hormuz — countries and companies are scrambling to bypass the waterway,” Axios reports.

“Why it matters: The Iran war threw a spotlight on the strait as the longtime center of the global energy trade, and the industry now has a huge incentive to reduce its dependence, regardless of the war’s outcome.”

Suddenly, Hormuz Is Less Crucial Than It Was

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Paul Krugman: “Are we back at war with Iran? Did the war ever stop? The U.S. is, once again, bombing Iran while Iranian drones strike shipping. Iran, giddy with its success in defying America, is demanding sovereignty over the Strait of Hormuz, while Donald Trump is saying no, he owns the Strait and will collect 20 percent tolls.”

“Folks, this is bad. U.S. national security policy is now entirely in the service of one man’s vanity. We got into this mess because Trump thought he could win an easy victory that would let him strut around feeling powerful. Now we can’t get out because he won’t admit that his war has been a humiliating failure.”

“The good news is that Trump’s temper tantrum will probably do less economic damage than one might have expected — because the cease-fire that is apparently over wasn’t doing as much good as one might have expected. The fact is that there is now a disconnect between events in the Strait of Hormuz and the energy prices that matter. This disconnect is coming from a surprising place, another war that was supposed to yield a quick, easy victory but didn’t: Vladimir Putin’s attempt to conquer Ukraine.”

Oil Prices Hinge On China’s Next Move

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“The passage of oil tankers through the Strait of Hormuz has been slowed significantly by the persistent cycle of hostility between the United States and Iran. But whether prices at the pump rise or fall will depend not only on how much oil flows out of the Persian Gulf but also on decisions made by China,” the New York Times reports.

“Typically the world’s largest oil importer, China slashed purchases this spring, reducing demand by so much that it prevented oil prices from soaring even higher earlier in the war.”

“Now, one of the biggest questions facing the market is: When will China start buying more oil again?”

Strategic Oil Reserve Strained by Overuse

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“The U.S. is tapping in to its national stocks of crude with abandon. The withdrawals are taking a toll on the strategic reserve system,” the Wall Street Journal reports.

“Just in the past four years, the Biden and Trump administrations have ordered the largest releases from the Strategic Petroleum Reserve while seeking to tamp down soaring oil prices—a total of 352 million barrels, or nearly half the capacity of the stocks.”

“Now, frequent drawdowns, wear-and-tear and a lack of investments are straining the reserve.”

How Ukraine Is Taking Out Russia’s Refineries

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“Ukraine is targeting Russian energy infrastructure with its growing fleet of long-range drones and missiles, causing fuel shortages in one of the world’s biggest oil and gas producers and embarrassing President Vladimir Putin,” the Wall Street Journal reports.

“In dozens of strikes since this spring, Ukraine has pounded oil refineries across its larger neighbor, hitting all of Russia’s 10 biggest plants, based on capacity figures from S&P Global Energy. More than one-quarter of Russian refining capacity has been knocked offline, analysts estimate.”

Oil Market Calm Shattered by Fresh Hostilities

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“The latest cracks in the cease-fire between the United States and Iran have jolted an oil market that in recent weeks seemed to think durable peace between the countries was within reach,” the New York Times reports.

“By midday Wednesday, international oil prices were approaching $80 a barrel, their highest level in weeks, after President Trump said the temporary truce with Iran was ‘over.'”

Oil Prices Jump After U.S. and Iran Trade Strikes

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“Oil prices spiked on Wednesday to the highest level in weeks after President Trump said that he thought the cease-fire with Iran was ‘over’ amid a series of strikes in the Persian Gulf,” the New York Times reports.

“The Trump administration also revoked a waiver that allowed Iran to sell oil in retaliation for attacks on tankers this week in the Strait of Hormuz, a crucial conduit for the world’s energy.”

NewsNation: Oil prices jump 5 percent after U.S. revokes Iran oil sanctions waiver.

Speaker Asks Trump to Let Shipping Waiver Expire

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“Speaker Mike Johnson and other Republicans in the US House of Representatives are asking President Donald Trump to allow a waiver of a century-old shipping law granted in March to tame fuel prices to expire,” Bloomberg reports.

“The lawmakers said in a letter to the president made public Wednesday that the 126-year-old Jones Act is crucial for protecting the US maritime industry and that the waiver is being exploited by other nations. They urged Trump to allow it to lapse as scheduled on Aug. 16.”

Bessent Claims Only China Buying Iranian Oil

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“Treasury Secretary Scott Bessent said that most nations aren’t yet ready to purchase Iranian oil, wary over the potential of the US reimposing sanctions, and that this is an incentive for Tehran to negotiate with Washington,” Bloomberg reports.

Said Bessent: “The Iranians thus far have not been able to sell their oil, because the buyers are a little wary of, will it be re-sanctioned. No one other than China, who was already buying it when it was sanctioned, has bought it, so it’s still trading at a discount.”

Another Trump Payment to Stop Offshore Wind

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“The Trump administration on Monday said it would pay Duke Energy $129 million to abandon its plans to build an offshore wind farm off North Carolina,” the New York Times reports.

“It was the fourth such deal struck by the administration to throttle the development of offshore wind power, a source of renewable energy that President Trump has disparaged for decades.”

Bloomberg: Trump pulls plug on Carolina wind project as cancellations mount.

About Political Wire

Taegan Goddard is the founder of Political Wire, one of the earliest and most influential political web sites. He also runs Political Job Hunt, Electoral Vote Map and the Political Dictionary.

Goddard spent more than a decade as managing director and chief operating officer of a prominent investment firm in New York City. Previously, he was a policy adviser to a U.S. Senator and Governor.

Goddard is also co-author of You Won - Now What? (Scribner, 1998), a political management book hailed by prominent journalists and politicians from both parties. In addition, Goddard's essays on politics and public policy have appeared in dozens of newspapers across the country.

Goddard earned degrees from Vassar College and Harvard University. He lives in New York with his wife and three sons.

Goddard is the owner of Goddard Media LLC.

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