The National’s Energy This Week is turning a page. We thank our host Robin Mills for taking you, our reader, through the many changes and volatilities of the energy industry and markets. I’ll be taking over from him and helping you stay informed on the latest developments in energy. I’ll help you foresee trends, stay on top of events and also help unpack some of the more convoluted jargon used in the energy industry.

This week, we’ll take a look at whether the world’s most closely-watched chokepoint is safe for passage, after Iran seized a tanker from the Strait of Hormuz.

Saudi Arabia has sent a shipment of crude to Syria for the first time. The volume may be small but is part of the Gulf’s growing collective effort to meet Syria’s energy needs.

Lastly, we explore what the discussions at Cop30 mean for the fossil fuel industry and whether the world is truly transitioning away from hydrocarbons.

To watch

Chokepoint Concerns

Iran’s seizure of Talara, a Marshall Islands-flagged petrochemicals-laden tanker on Saturday is the first major incident in the Strait of Hormuz since its threats over the summer to close the narrow waterway.

Iran and Israel’s exchange of missiles in June had renewed attention on Hormuz, which at its narrowest is around 34 km. Iran has never closed the strait, through which 35 per cent of the world’s oil flows, in spite of several threats to do so. Saudi Arabia, Kuwait and the UAE all require uninterrupted flow of traffic along the strait to get their oil to market.

Iran, which shares the strait with Oman, also requires the chokepoint for the transport of its own oil and products. The seizure of the tanker, which had set sail from the UAE port of Hamriyah before being seized 22 nautical miles east of Khor Fakkan is cause for concern to the shipping industry but is unlikely to escalate.

Upshot: Iran needs the waterway as much as Gulf states do and seizures and threats to tankers are likely to remain low-level and not escalatory

Barrels and diplomacy

A tanker carrying Saudi crude set sail to Syria for the first time since the lift of sanctions on the country. Petalidi, carrying 90,000 tonnes of crude oil, is on its way via the Cape of Good Hope to eventually dock at Syria’s Mediterranean port of Tartus, to supply the country’s oil refinery at Baniyas with fuel. This is the latest engagement by Gulf states with Syria, which requires $30 billion to rebuild its energy infrastructure devastated by years of war and crippled by sanctions. Earlier this year, Qatar began supplying Syria with gas via the Arab Gas Pipeline via Jordan to meet up to 400MW of electricity needs. The UAE’s DP World also started operations at Tartus last week, after a formal handover from the Syrian General Authority for Land and Sea Ports.

In sum: Saudi Arabia, Qatar, UAE are playing an increasingly prominent role in meeting Syria’s energy needs and developing associated infrastructure. Damascus needs $30bn to overhaul its energy sector

Cop30: Fossil fuels big comeback

Two years ago, at COP28, which took place in Dubai, nearly 200 countries pledged to transition away from fossil fuels. This was a landmark moment as for the first time in a hydrocarbon producing country, fossil fuels were given a sunset clause by the middle of the century. However, at COP30, which is taking place at Belem in Brazil without the participation of the US, one of the biggest producers of oil and gas, in the world, a showdown is looming.

Around 60 countries from across Europe, Africa, Latin America as well as from Small Island Developing States are calling for a roadmap to accelerate the move away from oil, gas and coal. This coalition has come up against a strong barrier. While Brazil has the world’s largest rainforest area, the country is a major oil producer and has approved oil exploration work right at the mouth of the Amazon. Climate observers are also unhappy with what they say is lobbying from oil producers to delay the implementation of the declaration adopted in COP28.

With US President Donald Trump providing his tacit approval for more oil and gas exploration in the US, the sentiment has moved away from transition to more consumption. The International Energy Agency also sees oil demand continuing to grow until 2050 in a bold pivot from its earlier forecasts indicating the fuel’s early phase-out.

Bottomline: Plans to move away from fossil fuels is challenged by a resurgent US oil and gas industry and growing demand for hydrocarbons until the middle of the century

Energy in data

short related write-up to weekly chart

Jargon buster:

Backwardation: It simply means that the current price of a commodity, let’s say crude oil, is higher than its future prices, which are set for fulfilling contracts and deliveries. It indicates that current demand for the commodity is very high.

As heard from: Haitham Al Ghais, secretary general of Opec, the 13-member group of oil exporting. "To my knowledge, you don't store oil on ships when there's backwardation," he said in an interview last week with CNBC where he defended the group’s decision to pause oil supply increases beyond December.

Happening this week:

• event /expected announcement here
• event /expected announcement here

Our top energy reads:

• Collection list of 3 more energy stories

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