Even when the strait was opened for a short period of time, there were conditions for passage. According to Iran’s Foreign Affairs Minister Abbas Araghchi, safe passage over the next two weeks “will be possible via coordination with Iran’s Armed Forces and with due consideration of technical limitations,” which means that individual ship owner and operator companies would need to receive permission from Iran to resume shipping through the strait. According to the Associated Press, the ceasefire plan reportedly also allows Iran and Oman to charge tolls on ships navigating the strait, as it lies within the territorial waters of both countries. Shippers had not previously paid tolls because the strait is considered an international waterway. The New York Times reports that the move could violate international law.

On April 8, four ships were allowed to pass with Iran’s Islamic Revolutionary Guard Corps charging tolls and indicating that it would limit traffic to about a dozen ships a day. According to the Wall Street Journal, Iran is formalizing a tiered approach to fees with ships carrying Iranian oil or goods passing freely, ships from friendly countries paying a toll, and ships from countries aligned with the United States or Israel blocked. Shipping operators say fees would be set around a week in advance and depend on the size of the vessel, with payments ranging to $2 million for a supertanker that can carry around two million barrels of oil, paid in crypto or Chinese renminbi.

Shippers are wary of the logistics for passage and may wait to ensure that the ceasefire holds before committing their vessels. Around 187 ​laden tankers carrying 172 million barrels of oil and refined products were afloat inside the Gulf before the ceasefire, and many more ocean-going ​vessels are waiting to transit. Under normal conditions, it would likely take more than two weeks to clear the backlog.

Negotiations for peace are scheduled to begin on Saturday, April 11, based on one of Iran’s 10-point peace proposals, which President Trump called “a workable basis on which to negotiate.” While it is unclear what the proposal contains, Iran had previously demanded conditions that included guaranteed control over the Strait of Hormuz, acceptance of its nuclear enrichment activities, removal of sanctions, and repatriation of financial losses. On Truth Social, President Trump wrote that there would be “no enrichment of Uranium,” that the United States and Iran would work together to dig up and remove nuclear “Dust,” that potential relief from tariffs and sanctions are on the table, and that many of the “15 points” of the Trump administration’s ceasefire plan have been agreed to. The White House also notes that the original “10-point plan” of Iran referenced in media reports was discarded and replaced with a later plan that is the basis of negotiations.

The price for Brent crude, the global benchmark for oil, dropped below $95 a barrel after hovering around $110 when the ceasefire was announced, but then headed back up towards $100 a barrel when Iran reclosed the strait. The initial drop was one of the largest 12-hour reductions in oil prices in history. The national average price of regular unleaded gas was $4.17 per gallon on the morning of April 9. Patrick De Haan, head of petroleum analysis at Gas Buddy, predicted it could fall below $4 a gallon within one or two weeks if the ceasefire continued. He further commented, before the strait was re-closed, that “gas prices could start reversing nationally in 48 hours or so — by a few cents every day.”

Alternate Route to Strait of Hormuz Needed

The Iran war has clearly pointed out the bottleneck that the Strait of Hormuz can cause when Iran effectively chooses to close it, barricading 20% of global oil and gas supplies without a transit point. Clearly, an alternate route or routes are needed besides the few pipelines that have been built: one by Saudi Arabia — the East-West pipeline, capable of moving seven million barrels per day to the Red Sea — and the other by the United Arab Emirates — a 1.8-million-barrel-per-day pipeline linking onshore oil fields to the Fujairah export terminal in the Gulf of Oman. Even those are not safe from Iranian attacks. An Iranian drone struck the East-West pipeline on April 8, according to the Wall Street Journal. Damage assessments are still being made.

Analysis

While it’s a positive sign that the U.S. and Iran are engaging diplomatically to resolve the conflict and reopen the Strait of Hormuz, the difficulty of both sides reaching a lasting agreement should open eyes around the world about the need for alternative supply chain arrangements.

One proposal — The India-Middle East-Europe Economic Corridor (IMEC) — is a proposed, multi-modal transportation network of pipelines, trains, and roads linking India to Europe via the UAE, Saudi Arabia, Jordan, and Israel. It features an eastern corridor (from India to the Persian Gulf) and a northern corridor (from the Gulf to Europe). It would aid economic growth, trade, and regional connectivity by enhancing efficiency, reducing transit times, and providing a logistical alternative to the Suez Canal.

For inquiries, please contact wrampe@ierdc.org.

The post The United States and Iran Agreed on a Tenuous Two-Week Ceasefire appeared first on IER.

Before the Shale Revolution, the prospect of exporting American LNG seemed farcical at best and suicidal at worst. In 2005, natural gas prices hit historically high levels, worsened by Hurricanes Rita and Katrina, raising electricity prices by 10.7%, compared to a 2.1% increase in 2004. In the face of these increases, the Department of Energy preached “[e]ffective conservation” through consumer awareness of natural gas prices, and Bill Cooper, president of the Center for LNG, joined the organization with the goal of forwarding LNG imports in the United States. The idea of American natural gas abundance seemed like a pipe dream, and the 20th-century problems with shortages and dependence persisted into the 21st century.

The situation changed when producers began tapping deeper into American natural gas reserves, due to new technologies such as hydraulic fracturing and horizontal drilling. U.S. natural gas production increased from 19 Tcf in 2005 to almost 29 Tcf in 2015. In a 2013 interview with OilPrice, Cooper foresaw the upcoming boom of LNG exports. “Now, the United States has an abundance of natural gas and is looking for additional markets to create jobs, generate new tax revenues, especially for state and local governments, and to help our geopolitical allies with their energy needs,” said Cooper. “LNG exports represent a tremendous opportunity to create thousands of new American jobs by bringing billions of dollars of investments into the U.S. economy.”

With domestic gas trading at a 17-year low, Cheniere Energy was the first to seize the opportunity on February 24, 2016. On this day, the company exported the first cargo of LNG from a lower-48 state at its Sabine Pass facility in Louisiana, which was originally built for imports, to Brazil. The pass was chosen for its depth: it is a 40-foot-deep channel on the Texas-Louisiana border, one of the few along the Gulf Coast capable of handling LNG carriers. Sabine Pass was outfitted to serve as one of the world’s largest LNG receiving terminals at the time, with insulated storage tanks, marine berths, and a vaporization system capable of converting four Bcf of imported liquefied gas into pipeline fuel daily. When Cheniere converted the terminal for export, it added liquefaction trains that draw domestic shale gas from the interstate pipeline network, treat it for contaminants, and supercool it to -260°F — shrinking it to one six-hundredth of its volume for ocean transit.

Fast forward to today, and we just celebrated the 10th anniversary of this first LNG export. The U.S. is the world’s largest LNG exporter, having exported over 27 Tcf and currently exporting an average of 16 Bcf per day. Eight facilities are currently operational — three in Louisiana, two in Texas, and one in Alaska, Georgia, and Maryland — with another eight approved by the Federal Energy Regulatory Commission and under construction. These facilities will contribute to an expected doubling of export capacity by 2031. In 2025, the U.S. exported LNG to 44 countries, keeping industry fueled and prices in check worldwide.

The global benefits of American LNG range from greater supply chain security to lower greenhouse gas emissions. U.S. LNG helped wean Europe off Russian gas after it invaded Ukraine, with exports increasing fourfold from 2021 to 2025. According to Wood Mackenzie, U.S. LNG lifecycle emissions are typically around 48% of the coal equivalent, thanks to its lower methane intensity and more efficient technologies at liquefaction projects and on vessels. As we point out in the 2026 Environmental Quality Index, the U.S. can produce significant quantities of natural gas while upholding high standards for environmental quality and human freedom. By incentivizing more domestic production, growing LNG exports replace natural gas produced by countries with worse standards.

In only 10 years, American industry transformed LNG from a footnote in export reports to an essential international product. The ingenuity of Cheniere and its willingness to adapt to changing circumstances represent the entrepreneurial greatness that defines American industry and has contributed to our current level of prosperity. For starting the transformation of the U.S. into a natural gas-exporting powerhouse, the first LNG export deserves recognition as an American energy moment.

The post American Energy Moments: LNG Exports Initiate a New Era of Energy Abundance appeared first on IER.

Links:

• Drones Over Dubai
• The Prices of Key Industrial Materials Are Increasing Due to the Iran Conflict
• The Iran Conflict Is Hitting Europeans Hard
• The Terms for Ending the Iran Conflict
• The United States Needs to Expand Its Pipeline Network

The post Currents: An Energy Update Week of April 6, 2026 appeared first on IER.

Another potential way to move stranded North Slope gas (about 35 trillion cubic feet) to market was announced by Polar LNG. According to the Oil & Gas Journal, this LNG facility would use existing Prudhoe Bay infrastructure, transporting gas via a short pipeline to a modular, nearshore gravity-based facility that would process and liquefy it. The gas would then be loaded onto specialized ice-class carriers for year-round export. The company is planning to begin production at the seven-million-metric-ton-per-year plant between 2029 and 2030, at a cost of $8–9 billion.

According to Semafor, Polar LNG is exploring the potential repurposing of sanctioned equipment built for Russia’s Arctic LNG 2 project and is seeking permission from the US government to acquire parts affected by the Biden administration’s sanctions. Obtaining pre-built equipment is critical to meeting the project’s timeline. The project, when completed, would have one of the shortest LNG shipping routes from North America to key Asian markets, approximately 3,600 miles to Japan, for example, compared to over 10,000 miles from the U.S. Gulf Coast.

While cheaper, Polar LNG faces severe challenges of transiting ice-laden waters. As The Alaska Story reports, a Russian gas project has not been able to deliver shipments recently due to icebreaker breakdowns, and Russia has a much larger icebreaker fleet than the United States. Russia’s Arctic LNG 2 project is operating at only about 25% capacity because the ice is too thick for most tankers, so it relies on a single ice-class tanker to move fuel.

The Polar LNG project is complementary to the pipeline LNG project, which is partnered by the Alaska Gasline Development Corporation and the privately owned Glenfarne. Alaska has 25% ownership in the project. According to Governor Mike Dunleavy and Former Senator Mark Begich, the pipeline project has received its Federal Energy Regulatory Commission certificate and Department of Energy license. The necessary engineering has been completed, permits have been obtained, and lawsuits are over. The right-of-way is secured, and the gas is available to put into the pipe. Buyers in Japan, South Korea, and other Pacific partners have expressed interest in purchasing its gas rather than relying on Middle Eastern gas. Furthermore, the pipeline project will supply the needed gas to Southcentral Alaska to heat Alaskan homes and fuel military bases, while also creating more jobs.

The final holdup is with the mayors of the boroughs through which the pipeline will transit. Governor Dunleavy has a bill that would replace a statewide $20 million property tax on oil and gas infrastructure, split between state and local governments, with a volumetric tax based on the volume of gas flowing through pipelines. According to the borough mayors, the volumetric tax would bring in far less revenue than the property tax — about 90% less, which would not be enough to cover local costs, such as additional students in schools, more vehicles on the road, and more fire and EMS calls, resulting in some of the project’s cost having to be paid by local taxpayers.

Analysis

The energy crisis resulting from the effective closure of the Strait of Hormuz due to the war with Iran is causing new interest in energy from Alaska’s North Slope. Alaska has the potential to be an energy powerhouse. As IER President Tom Pyle wrote for RealClearEnergy, “We cannot afford to keep Alaska locked up any longer. If we are serious about American energy independence and prosperity, the time is now to let Alaska do what it does best – develop and produce its God-given natural resources.”

For inquiries, please contact wrampe@ierdc.org.

The post Alaska Is Building a Natural Gas Pipeline and LNG Projects appeared first on IER.

Tom Pyle, President of the Institute for Energy Research, released the following statement:

“As the United States marks its 250th birthday, we reflect on the many milestones that have shaped its strength and character, and the innovation that has powered its progress along the way. We are excited to share this project, which will be ongoing throughout the year, in recognition of our nation’s incredible energy history.

“The story of America is every bit as much the story of American energy and ingenuity. Fueling America will showcase that story, including a timeline since our nation’s founding, interviews with industry leaders and energy workers, and other features. Innovations in energy have fueled America’s rise to prosperity. We know energy is the underpinning of all aspects of modern life, but for 250 years, it has been at the core of America’s growth and resilience. This will continue to be the case for generations to come. It is our honor to document and share this rich history as America celebrates its 250th birthday.”

IER Experts Available For Interview On This Topic:

• Tom J. Pyle, President
• Kenny Stein, Vice President of Policy
• Alexander Stevens, Manager of Policy and Communications

Additional Background Resources From IER:

• Fueling250.org 
• American Energy and Prosperity: A Historical Timeline
• Narrative Histories
• Energy Stories

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For media inquiries, please contact THOMAS.PYLE@IERDC.ORG

The post IER Launches Fueling America: 250 Years of Energy Innovation appeared first on IER.

According to CNBC, the refinery will process 1.2 billion barrels of U.S. light shale oil and produce 50 billion gallons of refined products. According to Trey Griggs, president of America First Refining, “The United States has a surplus of light shale oil but a shortage of refining capacity designed to process it. By building this refinery at the Port of Brownsville, we’re unlocking a major expansion of American energy production while creating thousands of high-paying jobs and strengthening our domestic supply chain.” Unlike many existing U.S. refineries that rely on heavy oil from Venezuela, Canada, and Mexico, this facility does not require imported oil, thereby strengthening U.S. national and economic security.

Reliance owns the world’s largest oil refinery, a 1.4 million barrel-per-day refining complex, in Jamnagar, India, and has a market capitalization of $206 billion. The firm, which reported $125 billion in ‌revenue last year, also operates businesses in retail, new energy, ​digital services, media, and entertainment. Reliance has signed “a binding 20-year offtake term sheet” with America First, and will buy the products that the refinery produces. According to Reuters, the cost of constructing refineries or adding capacity in the past decade has averaged about $40,000 per barrel of capacity, or about $6.7 billion for 168,000 barrels.

The last major refinery built in the U.S. was located in Garyville, Louisiana, in 1976. According to the Energy Information Administration, U.S. ​refining capacity is currently at 18 million barrels per day, and operational utilization is around 90%. While Texas is adding refining capacity, California is permanently shuttering its refining facilities with two recent departures.

Forty years ago, California had 42 refineries. After the closure of the Valero refinery in Northern California, it will have eleven. The exodus of refineries is forcing California to turn to imports. It is even importing gasoline from the U.S. Gulf Coast refineries, sending ships to the Bahamas first to avoid the higher costs of the Jones Act.

The reason for the exodus of refineries from California is its policies and regulations that drive fuel prices above the national average. California’s combined taxes add about $1.00 per gallon, with $0.18 from a federal gasoline tax, $0.709 from a state gasoline tax, $0.10 from a sales tax, and $0.02 from a storage tank fee. California also imposes several “hidden taxes” that directly affect the price of gas. These hidden taxes take the form of environmental compliance costs, which add an estimated $0.54 per gallon from California’s Low Carbon Fuel Standard and the state’s Cap-and-Invest Program, formerly called Cap-and-Trade.

The conflict with Iran has increased oil prices, which in turn has increased the national average and California’s gasoline prices. According to AAA, as of April 7, the national average gasoline price is $4.14 per gallon, and California’s average price is $5.93.

Analysis

Since a new domestic refinery was built in 1976, the U.S. has become a net exporter of energy products and the world’s largest producer of oil and natural gas. As we’ve explained previously, “The lack of refining capacity for our domestic production stems from U.S. policy that has blocked the development of new refineries for decades through adverse environmental standards and regulatory uncertainty.” The Brownsville refinery will redirect up to 60 million barrels of American oil annually back into American refining, creating thousands of both construction and permanent refining jobs, and producing gasoline, diesel, and jet fuel from an entirely domestic supply chain.

For inquiries, please contact wrampe@ierdc.org.

The post Trump Announces New Refinery — The First in 50 Years appeared first on IER.