Further oil and gas company profit reports are rolling in, which fuels the temptation for windfall taxes by governments (Shell posted Q1 adjusted profit of $6.92bn; Saudi Aramco earned $33.6bn, up 26%; Cheniere raised its full-year guidance on stronger LNG margins despite reporting a quarterly net loss from derivative positions). These are cyclical commodity returns in a supply-short market, but the optics are still familiar ground for political redistribution flex. Finance ministers in Germany and Italy, along with some US Senate Democrats, are calling for levies on war-related profits. In the US, proposals for a federal gas tax holiday are gaining traction; Rapidan Energy gives a 25% chance of Congress suspending the 18.3 cents per gallon federal tax, though the Bipartisan Policy Center estimates it would cut pump prices by only 9-14%, far from offsetting the $1.50 per gallon increase since the war began. The cost pressure is reaching consumers; P&G warned of a $1bn hit from elevated oil prices, Colgate-Palmolive flagged $300mn in additional costs, and references to "pricing action" in S&P 500 earnings calls have climbed to the highest level since 2022.

In the same week, the EU Commission drafted guidelines that would suspend methane emissions penalties during supply crises, with no time limit, after lobbying from the US government and the industry. Shell, separately, pushed to delay EU rules requiring hourly matching of renewable electricity for green hydrogen production, arguing they would add €2 per kilogramme to costs. The EU also issued guidance on the simplified ESG reporting.

A wind of major change on upstream activity in Europe came as Norway reopened three gasfields closed in 1998, with production from 2028, and offered 70 new exploration blocks, more than half in the Arctic.

Meanwhile, Australia imposed a 20% domestic gas reservation on east coast LNG exporters and secured bilateral fuel supply agreements with Japan, South Korea, Singapore, Malaysia and Brunei, as US refined fuel exports hit a record 8.2mn barrels per day, briefly making America a net crude exporter for the first time since WWII, though at the cost of depleting its own inventories toward unprecedented summer lows.

And on the other side of the globe, just as it closed the fossil fuel phaseout summit the week before, Colombia moved to prioritise a $150mn LNG import terminal as its gas shortfall reached 20% of demand.

EU anti-dumping complaints against Chinese chemicals have reached an all-time high, with chemicals now accounting for half of all new trade defence cases. The European chemical industry has shut 7% of capacity, with closure rates doubling annually; some chemicals are down to a single EU producer, and the bloc can no longer domestically manufacture products like paracetamol. Ineos alone filed 10 complaints in November. The sector sits at the intersection of trade, energy costs and industrial sovereignty, with 26 complaints still awaiting investigation.

In an FT Op-ed, where as much could be read between the lines, as on them, the UAE's ambassador to the US set out the strategic logic behind the country's exit from OPEC, announced last week. "We are not choosing between oil and the energy transition. We are funding one with the other... Like that suit and tie from 1986, we had outgrown Opec," wrote His Excellency Yousef Al Otaiba. Production capacity targets are 5mn barrels per day by 2027. The ambassador pointedly noted that Iran remains an OPEC member in good standing while actively undermining the organisation's stated mission of supply stability.

Africa was the good news story, as it is reaching a breakthrough in domestic energy value addition with the help of homegrown poster child Nigerian industrialist and billionaire, Aliko Dangote. Dangote's 650,000 bpd Lagos refinery hit full capacity weeks before the war, and Nigeria has avoided the fuel queues and rationing seen across other African countries; fertiliser prices have doubled and jet fuel is being diverted to European airlines at premium margins. Dangote is now planning a second 650,000 bpd refinery in East Africa, estimated at $15-17bn, while pressing ahead with doubling Lagos to 1.4mn bpd. Angola also fired up the Cabinda refinery, its first since independence in 1975. Africa currently exports three-quarters of its crude and imports 70% of refined fuel at an annual cost of $50bn in lost value; the crisis is adding situational urgency to a structural shift that has been slowly building through local capital and local ambition.

The tension between AI energy demand and grid capacity grows. NERC issued a rare Level 3 alert after data centre loads exceeding 1GW disconnected from the grid without warning. PJM (stands for Pennsylvania-New Jersey-Maryland Interconnection), the largest US power market, questioned its own market design in a 70-page white paper (see research bank). Microsoft weighed abandoning its 2030 clean-energy matching target, holding talks with Chevron on a natural gas plant in West Texas; Constellation Energy is restarting Three Mile Island's 835MW reactor under a 20-year Microsoft power purchase agreement, targeting mid-2027. Carlyle and Diversified Energy structured a $1.2bn securitised acquisition of Oklahoma oilfields, framed as "a differentiated play on the AI theme," channelling private credit into gas production underpinned by future well revenue.

European heat pump sales rose 16.5% in Q1, with Germany up 34% and Finland 71%; South Korean EV sales more than doubled and solar panel imports hit a record; record UK wind and solar output avoided £1.7bn in gas imports since the war began, according to Carbon Brief. But Europe's solar glut is producing its own problems, with negative pricing episodes undermining the economics of all generators in Germany, Poland and Hungary. Spencer Dale, a former Bank of England and BP chief economist argued that the crisis will not uniformly accelerate the transition; for many countries, the energy security imperative means more coal, not less, and governments are already deprioritising sustainability for security. The growing dissonance between transition ambition and the immediate requirement for hydrocarbon insurance is now the central tension in energy policy worldwide.

In the research bank, we have two important reports this week. First, the IEA's Global Methane Tracker reported that more than double the volume of gas cut off by Hormuz is being wasted each year through uncapped methane emissions and unnecessary flaring: 200 bcm recoverable annually versus the 110 bcm of LNG that transited the strait last year. The agency framed methane abatement explicitly as an energy security measure. Second, US PJM electrical grid jurisdiction (stands for Pennsylvania-New Jersey-Maryland Interconnection) issued a study warning that the regional electricity grid is facing a severe power shortage that leads to sudden price spikes, political backlash, and stalled investment as a result of skyrocketing demand from data centers, retiring power plants, and slow construction times. The findings to maintain reliability boiled down to a choice between requiring long-term, fixed-price electricity contracts to protect consumers from unpredictable bills, explicit rationing who loses power first during grid emergencies, or changing the rules so power plants make their money by successfully generating electricity during real-time crises instead of receiving standby payments.

The New York State Common Retirement Fund ($298bn assets under management) warned TotalEnergies that its decision to accept $928mn from the Trump administration to terminate two US offshore wind leases and redirect investment into fossil fuels raised "significant concerns" about strategic consistency and said it was re-evaluating its stake. On the other side of the narrative, the Trump Justice Department sued Minnesota to block the state's six-year-old consumer protection lawsuit against Exxon, API and Koch Industries, arguing that climate regulation is a federal prerogative. Norway's gasfield reopening drew accusations of "greenwashing through and through" from the Socialist Left party.

Copernicus data confirmed April 2026 as the joint third-warmest April on record, 1.43°C above pre-industrial levels, with sea surface temperatures transitioning toward El Niño conditions and record marine heatwave activity extending from the central Pacific to the US west coast. And a Nature Sustainability study concluded that New Orleans has crossed a "point of no return," with 3-7 metres of projected sea-level rise set to push the Gulf of Mexico shoreline 100km inland before the century's end, calling for immediate managed relocation of the city's 360,000 residents.

India's rupee hit a historic low above 95/$ as foreign investors pulled a record $21bn from stocks since the war began. Qatar extended force majeure on LNG supply through mid-June. Turkey signed ~10 new LNG supply deals, positioning itself as a regional gas gateway to Central and Eastern Europe. Europe's power grid operators are ramping physical and cyber defences, with the EU estimating €1.2tn in grid investment needed by 2040. An incredible story from the FT investigation takes you to the real operations of a shadow tanker fleet; great read. Diamondback Energy began raising Permian Basin output "immediately." A $750mn solar mini-grid expansion is planned across Uganda, Rwanda, Ethiopia and the DRC, targeting 2.1mn connections. Peter Thiel led a $140mn investment in wave-powered ocean data centres. A Bill Gates-backed fusion start-up plans the UK's first commercial plant by the mid-2030s. The US and South Africa held their highest-level meeting this year on critical minerals cooperation.