In this week’s Market Movers Americas, presented by Hope Pagan-Ramos:
• Oil markets on edge as escalation between Israel, Iran unfolds
• Petcoke market reacts following Venezuela sanctions restoration
• California’s Cap-and-Trade regulation workshop to give clarity
• Decarbonization alone to double ERCOT power demand
This week, oil markets are on edge following an escalation in targeted attacks between Israel and Iran. Because Iran exports 2.2 million b/d of crude oil, the conflict could cause severe impact to global supply if Iran’s energy infrastructure is targeted, or if the Strait of Hormuz is blocked. Sources are paying particular attention to whether US lawmakers will enforce sanctions on Iranian oil exports amid a period of tight global supplies.
The US petcoke market will continue to adjust to this week’s restoration of sanctions against Venezuela, a leading producer. Sources say a likely outcome is that once buyers are no longer comfortable buying Venezuelan petcoke, the product will divert to China, which will ultimately exit the Gulf Coast market.
The California Air Resource Board will have its first 2024 public workshop on Tuesday about potential amendments to state cap-and-trade regulations. The long overdue program review will help give clarity to actual changes, and the announcement of the workshop date alone spurred a spike in California carbon allowance prices, showing the high level of anticipation among traders and other market participants.
New Rocky Mountain Institute data shows that efforts to decarbonize heavy industry will play a major role in driving increased load growth on electric grids going forward. Power demand in the Electric Reliability Council of Texas could double in the next 20 years solely through efforts to decarbonize heavy industries.
I’m Hope Pagan-Ramos. Thanks for kicking off your Monday with S&P Global Commodity Insights.