oil industry

European benchmarks began the week with gains. Oil and gold prices increased, but the euro weakened against the dollar. Sentiment was influenced by OPEC+’s decision to pause production hikes in the first quarter of next year, which led to a modest rise in oil prices as fears of oversupply eased. Gains were, however, mostly lost by late morning.

The international benchmark, Brent crude futures, traded at $64.76, while US West Texas Intermediate cost $60.92 a barrel.

Alongside pauses in the new year, OPEC+ countries agreed on Sunday to increase output by a small 137,000 barrels per day in December, maintaining the pace set for October and November.

Meanwhile, investors expect fresh Western sanctions on Russia, targeting Rosneft and Lukoil, to hinder the country’s ability to boost production further.

At the same time, major Western oil companies are benefitting from the disrupted supply of Russian refined fuels due to attacks and sanctions. Refining margins have risen substantially, giving the oil majors a boost. Both BP and Shell share prices were slightly up on Monday before noon in Europe.

“The decision by producers’ cartel OPEC+ to pause further output hikes at the start of next year, amid concerns about a glut of supply, helped give oil prices a lift and, in turn, boosted UK market heavyweights BP and Shell,” said AJ Bell investment director Russ Mould.

The movements also came as BP announced it had agreed to divest stakes in US shale assets to Sixth Street investment firm on Monday.

Winners in Europe

At 11:00 CET, the UK’s FTSE 100 was up by a few points. The DAX in Frankfurt was leading the gains, up 0.8% after an initial stutter. The CAC 40 in Paris started climbing, reaching gains of nearly 0.2%. The lift in France came despite national budget uncertainties and the release of negative PMI data, which showed that the country’s manufacturing sector was still contracting in October.

US futures were positive around the same time, rising between 0.1% and 0.5%.

Meanwhile, the earnings season continues. A number of European companies are reporting this week, including AstraZeneca, BP, BMW, and Commerzbank.

Ryanair opened the week by posting stronger-than-expected results for the first half of its financial year, spanning April to September. Revenues rose 13% to €9.82bn, as traffic grew 3% and fares increased by 13%. Over the same period, profit rose by 42% year-on-year to €2.54bn, driven by a strong Easter season.

The airline’s shares were up 2.90% in Dublin at around midday.

Looking ahead, Ryanair’s outspoken CEO Michael O’Leary criticised countries in Europe where airlines face high taxes, including environmental duties. In an interview with CNBC, he threatened to move capacity outside the UK should the new budget include such a levy.

“Ryanair is also one of several airline operators with an eagle eye on taxes and costs. It is no longer putting up with unfavourable tax systems, preferring to switch flights and routes to less punitive locations,” Mould commented.

In other markets, the euro weakened against the US dollar by more than 0.2%, hitting a rate of $1.1517 by 11:00 CET. At the same time, the Japanese yen and the British pound were also losing ground against the greenback, with the dollar trading at ¥154.15 and the pound costing $1.3136.

Gold traded just above $4,000, rising slightly by 0.3%.

Last year on the campaign trail, President Trump repeatedly promised to “slash energy and electricity prices by half within 12 months.” But actions speak louder than words. Since returning to office in January, the Trump administration has instead done everything it possibly can to drive up the cost of electricity. What is going on?

The damage starts with Trump’s attempts to prevent any new clean energy generation at a time when electricity demand is growing rapidly, caused by an explosion of new data centers and new housing, the expanding fleet of electric vehicles and a resurgence in American manufacturing. The U.S. needs more energy than ever, and 96% of electricity capacity added to the U.S. grid in 2024 came from clean energy. Why? Because clean energy is both the cheapest source of electricity and the fastest to produce. If we don’t rethink our energy future quickly enough to keep up with a growth in demand, then electricity prices will only continue to rise.

Then again, maybe the recent price spikes are part of Trump’s goals, because he’s done everything he can do to block new clean energy, including:

• Raising taxes on clean energy projects by at least 30% when Trump had all the renewable energy tax credits removed from his “One Big Beautiful Bill.”
• Blocking clean energy projects on federal lands, effectively creating a bureaucratic veto by requiring Secretary of the Interior Doug Burgum to personally sign off on permitting for every proposed clean energy project.
• Issuing “stop work” orders (with no significant justification) for two offshore wind projects that were fully approved and permitted — and, in one case, where construction was already 80% complete. This not only drives up the cost of constructing new electricity resources; it also creates a business climate in which no sane company would risk investing in new projects that may be torpedoed by an arbitrary and capricious federal government simply because the President thinks wind turbines mar his view.
• Canceling a Department of Energy loan commitment for the Grain Belt Express, a major transmission project designed to carry low-cost wind and solar energy from the Great Plains to Illinois and other eastern U.S. states where electricity prices have risen rapidly. This deprives those states of new energy and undermines the ability of Great Plains states to harness natural resources and grow their economies as energy exporters.
• Gutting federal agencies, such as the Department of Energy’s Loan Programs Office, which helps finance big energy projects, especially for innovative new technologies such as geothermal and new nuclear. Without government support for first-of-their-kind projects, these initiatives simply won’t happen and promising new energy technology will be delayed for years.

It’s not just the cost of building clean energy development that Trump has sabotaged. His high and ever-changing tariffs have also scrambled supply chains and raised prices for all types of energy. New tariffs, for example, have raised the cost of steel by up to 50%, which affects the cost of pipes needed for natural gas plants as well as towers for wind turbines and racks for solar panels. Every single kind of new electricity generation is now more expensive, and those higher material costs create higher prices for electricity on our utility bills.

Trump has also raised costs of existing energy resources, including supporting the oil industry’s efforts to dramatically increase U.S. exports of natural gas. This will reduce the supply available for heating homes and running power plants in America, raising prices on electricity bills and gas bills at once. Trump has also used emergency powers to force less-than-profitable coal plants to stay open, saddling customers with the extra costs to subsidize these old plants. In one instance, it cost locals $29 million to keep the J.H. Campbell plant in West Olive, Mich., open for just five weeks of extended operations. Analysts now estimate that Trump’s push to keep coal plants open could add between $3 billion and $6 billion per year to our electricity bills.

Is this sheer economic incompetence — not difficult to fathom given the rate at which Trump has driven businesses into bankruptcy — or part of his strategy to deliberately make electricity more expensive so people won’t switch to EVs and the oil industry won’t lose its customers?

Either way, electricity prices are already rising and Trump’s actions are clearly making it worse. Doubtless, Republicans will try to point the finger at renewable energy when electricity prices spike over coming years, but the real causes should be clear: Trump’s reckless decisions to block new clean energy production, raise tariffs on the energy supply chain, export our natural gas and force customers to subsidize struggling coal plants.

Americans need abundant, affordable energy to power our homes and grow our economy, and we need leaders who know how to support the clean energy revolution, not try to stand in its way.

Josh Becker is a Democratic state senator from Menlo Park and chair of the California Senate Committee on Energy, Utilities and Communications.

SACRAMENTO — Amid concerns that refinery closures could send gas prices soaring, California legislative leaders Wednesday introduced a last-minute deal aimed at increasing oil production to shore up the struggling fossil-fuel industry while further restricting offshore drilling.

The compromise, brokered by Gov. Gavin Newsom, Assembly Speaker Robert Rivas and Senate Pro Tem Mike McGuire, would streamline environmental approvals for new wells in oil-rich Kern County and increase oil production. The bill also would make offshore drilling more difficult by tightening the safety and regulatory requirements for pipelines.

With support from Rivas and McGuire, Senate Bill 237 is expected to pass as part of a flurry of last-minute activity during the Legislature’s final week. Newsom’s office said the governor “looks forward to signing it when it reaches his desk.”

The late introduction of the measure may force the Legislature to extend its 2025 session, set to end Friday, by another day because bills must be in print for 72 hours before they can be voted on.

The bill was introduced Wednesday as part of a package of energy policies that aims to address growing concerns about affordability and the closure of California oil refineries.

Valero and Phillips 66 plan to close plants in the San Francisco Bay Area and Los Angeles County’s South Bay, which would reduce California’s in-state oil refining capacity by an estimated 20%. Industry experts warn that losing refining capacity could lead to more volatile gas prices.

The closures have become a sore spot for Newsom and for state Democrats, pitting their longtime clean-energy goals against concerns about the rising cost of living — a major political liability.

The package tries to strike a balance between the oil industry and climate activists, but neither side seemed particularly pleased: Environmental groups panned the agreements, and industry groups said they were still reviewing the bill.

“I don’t think what’s in that legislation is going to keep refineries open,” said Michael Wara, the director of Stanford University’s Climate and Energy Policy Program.

Crude oil produced in California makes up a fraction of what refineries turn into gasoline, he said, so although increasing production may help stabilize the decline of local oil companies, it won’t benefit the refineries.

The bill would grant statutory approval for up to 2,000 new wells per year in the oil fields of Kern County, the heart of California oil country, which produce about three-fourths of the state’s crude oil. That legislative fix, effective through 2036, would in effect circumvent years of legal challenges by environmental groups seeking to stymie drilling.

The state, which has championed and pioneered progressive environmental policies to slash carbon emissions, also is home to a billion-dollar oil industry that helps power its economy and has significant political sway in Sacramento. Despite steady declines in production, California remains the eighth-largest crude oil producing state in the nation, according to the U.S. Energy Information Administration.

Hollin Kretzmann, an attorney at the Center for Biological Diversity’s Climate Law Institute, said the legislation “acknowledges the harms of oil drilling yet takes radical steps to boost it.”

“Removing environmental safeguards won’t reverse the terminal decline of California oil production but it will allow the industry to do more damage on its way out the door,” Kretzmann said, adding that it will have “no impact on refinery closures or gas prices.”

Ted Cordova, a vice president of E&B Natural Resources, an oil and natural gas company with operations in Kern County, told reporters earlier this week that California needs to reverse falling oil production to keep refineries operating. He said his firm gets emails from pipeline companies saying they are operating “at dangerously low levels, can you send us more?”

The bill also has the potential to create new hurdles for Sable Offshore Corp., the Texas oil firm that is moving toward restarting offshore drilling along Santa Barbara County’s coast, depending on when the company navigates through a litany of ongoing litigation and necessary state approvals.

The company has moved forward on repairs to the network of oil pipelines that burst in 2015 in one of the state’s worst oil spills, despite opposition from the California Coastal Commission.

The bill, which would take effect in January, reasserts the authority of the commission to oversee pipeline repair projects and requires the “best available technology” for any pipe transporting petroleum from offshore. That could add lengthy governmental reviews for Sable if the operation isn’t running by January.

The company, despite reports that it’s running low on capital and has suffered repeated setbacks, continues to say it hopes to begin sales as soon as possible.

Representatives from Sable did not respond to questions Wednesday.

Mary Nichols, an attorney at UCLA Law’s Emmett Institute on Climate Change and the Environment, said the bill probably wouldn’t affect the ongoing project off Santa Barbara County’s coast — which remains tied up in litigation — but makes clear that there’s no easy path for any other company looking to take advantage of offshore oil in federal waters under the oil-friendly Trump administration.

“This was designed to send a message to anybody else who might be thinking about doing the same thing,” said Nichols, a former chair of the California Air Resources Board.

Lawmakers also introduced a tentative deal on cap-and-trade, an ambitious climate program that has raised roughly $31 billion since its inception 11 years ago. The revised language would extend the program from its current 2030 deadline until 2045.

The program, last renewed in 2017, requires major polluters such as power plants and oil refineries to purchase credits for each ton of carbon dioxide they emit, and allows those companies buy or sell their unused credits at quarterly auctions.

Assemblymember Lori D. Wilson (D-Suisun City), one of the authors of SB 237, said she was glad to make progress on the push and pull between the state’s fuel needs and its commitment to green energy. She said she understands there are environmental concerns, but “at the end of the day, our purpose was an issue of petroleum supply.”

“We all don’t want an import model,” she said.

Times staff writers Melody Gutierrez and Hayley Smith contributed to this report.

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Investors reacted to US strikes on Iran over the weekend as Iran and Israel continued to trade missile fire on Monday morning.

The price of Brent crude oil rose around 1.53% to $78.19 a barrel as of around 7.15 CEST, while WTI rose 1.48% to $74.93 a barrel.

On Sunday, US forces attacked three Iranian nuclear and military sites, stating that Tehran must not be allowed to possess a nuclear weapon.

President of Iran Masoud Pezeshkian said that the country “will never surrender to bullying and oppression”, while Iranian foreign minister Abbas Araghchi has arrived in Moscow for talks with Russian president Vladimir Putin.

Futures for the S&P 500 slipped 0.13% to 6,010.25 and Dow Jones Industrial Average futures dropped 0.2% to 42,431.00. Nasdaq futures fell 0.18% to 21,804.50 on Monday morning.

In Asian trading, Tokyo’s Nikkei 225 index fell 0.19% to 38,331.12, the Kospi in Seoul dropped 0.3% to 3.012,88, and Australia’s S&P/ASX 200 declined 0.37% to 8,474.40.

Hong Kong’s Hang Seng and the Shanghai Composite Index were in positive territory, with respective gains of 0.35% to 23,611.68 and 0.13% to 3,364.29.

The conflict, which flared up after an Israeli attack against Iran on 13 June, has sent oil prices higher linked to Iran’s status as a major oil producer.

The nation is also located on the narrow Strait of Hormuz, through which much of the world’s crude oil passes.

Investors are concerned that Tehran might decide to bomb oil infrastructure in neighbouring countries or block tankers from travelling through the Strait of Hormuz.

Shipping company Maersk said on Sunday that it was continuing to operate through the strait, adding: “We will continuously monitor the security risk to our specific vessels in the region and are ready to take operational actions as needed.”

According to vessel tracking data compiled by Bloomberg, two supertankers Coswisdom Lake and South Loyalty U-turned in the Strait of Hormuz on Sunday.

The situation now hinges on whether Tehran decides to opt for aggression or a more diplomatic response to US and Israeli strikes.

Iran could attempt to close the waterway by setting mines across the Strait or striking and seizing vessels. Even so, this would likely be met by a forceful response from the US navy, meaning the oil price spike may not be sustained.

Some analysts also think Iran is unlikely to close down the waterway because the country uses it to transport its own crude, mostly to China, and oil is a major revenue source for the regime.

If Tehran did successfully close the Strait, this would cause a wider price spike for transported goods and complicate the deflationary process in the US, potentially keeping interest rates higher for longer.

On Monday morning, Trump also floated the possibility of regime change in Iran.

“If the current Iranian regime is unable to make Iran great again, why wouldn’t there be regime change?” said the US president on Truth Social.

Vice-president J.D. Vance had commented earlier that the administration did not seek regime change in Iran.

As California positions itself as a leader on climate change, former Los Angeles mayor and gubernatorial candidate Antonio Villaraigosa is pivoting away from his own track record as an environmental champion to defend the state’s struggling oil industry.

Villaraigosa’s work to expand mass transit, plant trees and reduce carbon emissions made him a favorite of the environmental movement, but the former state Assembly speaker also accepted more than $1 million in campaign contributions and other financial support from oil companies and other donors tied to the industry over more than three decades in public life, according to city and state fundraising disclosures reviewed by The Times.

Since entering the race last year to replace Gov. Gavin Newsom, Villaraigosa has accepted more than $176,000 from donors with ties to the oil industry, including from a company that operates oil fields in the San Joaquin Valley and in Los Angeles County, the disclosures show.

The clash between Villaraigosa’s environmentalist credentials and oil-industry ties surfaced in the governor’s race after Valero announced in late April that its Bay Area refinery would close next year, not long after Phillips 66 said its Wilmington refinery would close in 2025.

Villaraigosa is now warning that California drivers could see gas prices soar, blasting as “absurd” policies that he said could have led to the refinery closures.

“I’m not fighting for refineries,” Villaraigosa said in an interview. “I’m fighting for the people who pay for gas in this state.”

The refineries are a sore spot for Newsom and for California Democrats, pitting their environmental goals against concerns about the rising cost of living and two of the state’s most powerful interest groups — organized labor and environmentalists — against each other.

Villaraigosa said Democrats are letting the perfect be the enemy of the good in their approach to fighting climate change.

He said he hoped no more refineries would close until the state hits more electrification milestones, including building more transmission lines, green-energy storage systems and charging stations for electric cars. The only way for the state to reach “net zero” emissions, he said, is an “all-of-the-above” approach that includes solar, wind, geothermal, hydroelectric, nuclear power and oil and gas.

“The notion that we’re not going to do that is poppycock,” Villaraigosa said.

Villaraigosa’s vocal support for the oil industry has upset some environmental groups that saw him as a longtime ally.

“I’m honestly shocked at just how bad it is,” said RL Miller, the president of Climate Hawks Vote and the chair of the California Democratic Party’s environmental caucus, of the contributions Villaraigosa has accepted since entering the race in July.

Miller said Villaraigosa signed a pledge during his unsuccessful run for governor in 2018 not to accept campaign contributions from oil companies and “named executives” at fossil-fuel entities. She said he took the pledge shortly after accepting the maximum allowable contributions from several oil donors in 2017.

Miller said that more than $100,000 in donations that Villaraigosa has accepted in this gubernatorial cycle were clear violations of the pledge.

That included contributions from the state’s largest oil and gas producer, California Resources Corp. and its subsidiaries, as well as the founder of Rocky Mountain Resources, a leader of the oil company Berry Corp., and Excalibur Well Services.

“This is bear-hugging the oil industry,” she said.

Environmental activists view the pledge as binding for future campaigns. Villaraigosa said he has not signed it for this campaign.

The economy is dramatically different than it was in 2018, Villaraigosa said, and working-class Americans are being hammered, which he said was a major factor in recent Democratic losses.

“We’re losing working people, particularly working people who don’t have a college education,” he said. “Why are we losing them? The cost of living, the cost of gas, the cost of utilities, the cost of groceries.”

Thad Kousser, a political science professor at UC San Diego, said such statements are consistent with Villaraigosa’s messaging in recent years.

“Villaraigosa is squarely in the moderate lane in the governor’s race. That doomed him in 2018, when voters wanted to counterbalance President Trump and Villaraigosa was outflanked by Newsom,” Kousser said. “But today, even some Democrats may want to counterbalance the direction that they see Sacramento taking, especially when it comes to cost-of-living issues and the price of gas.”

He added that the fossil-fuel donations may not be the basis for Villaraigosa’s apparent embrace of oil and gas priorities.

“When a politician takes campaign contributions from an industry and also takes positions that favor it, that raises the possibility of corruption, of money influencing votes,” Kousser said. “But it is also possible that it was the politician’s own approach to an issue that attracted the contributions, that their votes attracted money but were not in any way corrupted by it. That may be the case here, where Villaraigosa has held fairly consistent positions on this issue and consistently attracted support from an industry because of those positions.”

Other Democrats in the 2026 governor’s race, including Lt. Gov. Eleni Kounalakis, former U.S. Rep. Katie Porter, former state Controller Betty Yee and Superintendent of Public Instruction Tony Thurmond, have signed the pledge not to accept contributions from oil industry interests, Miller said.

Former California Senate President Pro Tem Toni Atkins, former Health and Human Services Secretary Xavier Becerra and businessman Stephen Cloobeck have not. (Cloobeck has never run for office before and has not been asked to sign.)

Other gubernatorial candidates have also accepted fossil-fuel contributions, although in smaller numbers than Villaraigosa, state and federal filings show.

Becerra accepted contributions from Chevron and California Resources Corp., formerly Occidental Petroleum, while running for attorney general. Atkins took donations from Chevron, Occidental and a trade group for oil companies while running for state Assembly and state Senate. And while running for lieutenant governor, Kounalakis took contributions from executives at oil and mining companies.

Campaign representatives for the two main Republican candidates in the race, Riverside County Sheriff Chad Bianco and conservative commentator Steve Hilton, said they welcomed oil-industry donations.

Villaraigosa is a fierce defender of his environmental record dating back to his first years as an elected official in the California Assembly.

As mayor of Los Angeles from 2005 to 2013, Villaraigosa set new goals to reduce emissions at the Port of Los Angeles, end the use of coal-burning power plants and shift the city’s energy generation toward solar, wind and geothermal sources.

The child of a woman who relied on Metro buses, he also branded himself the “transportation mayor.” Villaraigosa was a vocal champion for the 2008 sales tax increase that provided the first funding for the extension of the Wilshire Boulevard subway to the Westside.

But, he said, Democrats in 2025 have to be realistic that the refinery closures and their goals of reducing greenhouse gas emissions could disproportionately affect low-income residents who are already struggling to make ends meet.

Villaraigosa’s comments underscore a broader divide among Democrats about how to fight climate change without making California even more expensive, or driving out more high-paying jobs that don’t require a college education.

Lorena Gonzalez, a former state lawmaker who became the leader of the California Labor Federation in 2022, said that while climate change is a real threat, so is shutting down refineries.

“That’s a threat to those workers’ jobs and lives, and it’s also a threat to the price of gas,” Gonzalez said.

California is not currently positioned to end its reliance on fossil fuels, she said. If the state reduces its refining capacity, she said, it will have to rely on exports from nations that have less environmental and labor safeguards.

“Anyone running for governor has to acknowledge that,” Gonzalez said.

Villaraigosa said that while the loss of union jobs at Valero’s Bay Area refinery worried him, his primary concern was over the cost of gasoline and household budgets.

His comments come as California prepares to square off yet again against the Trump administration over its environmental policies.

The U.S. Senate on Thursday voted to revoke a federal waiver that allowed California to set its own vehicle emission standards, including a rule that would have ultimately banned the sale of new gas-fueled cars in 2035. Villaraigosa denounced the vote, but said that efforts to fight climate change can’t come at the expense of working-class Americans.

President Trump has also declared a national energy emergency, calling for increased fossil-fuel production, eliminating environmental reviews and the fast-tracking of projects in potentially sensitive ecosystems and habitats. The Trump administration is also targeting California’s environmental standards.

Villaraigosa, an Eastside native, started his career as a labor organizer and rose to speaker of the state Assembly before becoming the mayor of Los Angeles. Now 72, Villaraigosa has not held elected office for more than a decade; he finished a distant third in the 2018 gubernatorial primary.

Over the years, donors affiliated with the fossil-fuel industry have contributed more than $1 million to Villaraigosa’s political campaigns and his nonprofit causes, including an after-school program, the city’s sports and entertainment commission and an effort to reduce violence by providing programming at city parks during summer nights, according to city and state disclosures.

More than half of the contributions and support for Villaraigosa’s pet causes, over $582,000, came during his years at Los Angeles City Hall as a council member and mayor.

In 2008, billionaire oil and gas magnate T. Boone Pickens donated $150,000 to a city proposition backed by Villaraigosa that levied a new tax on phone and internet use.

Pickens made the donation as his company was vying for business at the port of Los Angeles, which is overseen by mayoral appointees and was seeking to reduce emissions by replacing diesel-powered trucks with vehicles fueled by liquid natural gas.

The rest of the contributions and other financial support flowed to Villaraigosa’s campaign accounts and affiliated committees while he served in the Assembly and during his two gubernatorial runs. These figures do not include donations to independent expenditure committees, since candidates cannot legally be involved in those efforts.

Villaraigosa said that while such voters don’t subscribe to Republicans’ “drill, baby, drill” ethos, he slammed the Democratic Party’s focus on such matters and Trump instead of kitchen-table issues.

“The cost of everything we’re doing is on the backs of the people who work the hardest and who make the least, and that’s why so many of them — even when we were saying Trump is a threat to democracy — they were saying, yeah, but what about my gas prices, grocery prices, the cost of eggs?” he said.

Times staff writer Sandra McDonald in Sacramento contributed to this report.