US chlor-alkali producers insulated from energy rally

Spanish Market: Chemicals, Natural gas
11/03/26

US energy independence should insulate domestic chlor-alkali manufacturers from surging feedstock global natural gas costs as the US war in Iran enters its second week and roils markets.

US natural gas prices remain insulated from a global supply crunch even as the war with Iran fuels volatility in oil futures and higher European natural gas prices. Natural gas comprises about 70pc of electrochemical unit (ECU) production costs in the US. An ECU is 1t of chlorine and 1.1 dry metric tonnes (dmt) of caustic soda.

US benchmark Henry Hub natural gas prices have climbed by 4pc after the initial US-Israel joint attacks on Iran on 28 February to settle on Tuesday at $3.07/mmBtu.

But US natural gas futures are unlikely to see near-term volatility unless the conflict is prolonged, analysts said.

"In the short-term, the war would have little to no impact on Henry Hub prices," Baker & O'Brien consultant Kent Bayazitoglu told Argus.

US LNG exporters have little ability to increase volume into the global market because they already operate near capacity. Less-reactive natural gas prices at Henry Hub should widen ECU margins for US producers as caustic soda spot exports trade at $400/dmt fob and higher and polyvinyl chloride prices rebound.

A stable US Gulf coast ECU cost floor could allow producers to be more competitive in the global spot market as other origins face the risk of higher energy prices. European benchmark TTF natural gas prices climbed by as much as 70pc from pre-war levels to $18.94/mmBtu on 9 March before easing to $15.90/mmBtu yesterday — still 43pc higher than pre-war prices.

US Gulf coast spot caustic soda prices were uncompetitive to many destinations outside Latin America before the war in the Mideast Gulf and rallying freight costs following the attacks have further increased delivered prices from the US and other origins. Rising caustic soda prices, though, are not expected to deter import demand as supply options become increasingly limited.

Northeast Asia and Middle East suppliers are virtually locked out of the Mediterranean market with shippers steering clear of the Red Sea, and planned maintenance in the US and Europe should limit spot availability throughout the Atlantic basin through the second quarter.

Mediterranean importers, who have been on the sidelines since January with plentiful inventory, potentially face steeper spot price increases for the next round of buying because of higher freight costs and expected supply limitations in the Atlantic.

By Connor Hyde

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11/03/26

Cut gas' impact on power price: EU's von der Leyen

Brussels, 11 March (Argus) — The EU should act to reduce the impact of natural gas costs on power prices, according to European Commission president Ursula von der Leyen, who said options include "subsidising or capping" gas prices, better use of power purchase agreements (PPAs) and contracts for difference (CfDs). The current market design has "delivered", von der Leyen said, noting "overall" support for the system. "But it is crucial we reduce the cost impact when gas sets the electricity price," she said, adding that state aid was also among the options under consideration. Speaking to the European Parliament, von der Leyen also defended the bloc's emissions trading system (ETS): "Without ETS, we would now consume 100bn m³ more gas, making us more vulnerable and more dependent. So, we need ETS, but we need to modernise it." She also noted the need for grid charges so less renewable energy is wasted, and criticised EU member states for taxing electricity far more than gas. "One member state applies 0pc taxes on retail electricity, while some others apply over 16pc," she said. Von der Leyen said Europe is now "far less" exposed to fossil fuel imports. "Diversification efforts are paying off," she said. "But no matter what we do in terms of measures, as long as we import a significant share of fossil fuels from unstable regions, we are vulnerable and dependent." She said gas and oil price increases over 10 days of the Middle East conflict have already cost European taxpayers an additional €3bn in fossil fuel imports. It would be a "strategic blunder" to return to Russian fossil fuels, she added, noting that EU renewables and nuclear have remained at the same price over the last 10 days. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

UK net zero cheaper than one fossil price shock: Report

11/03/26

UK net zero cheaper than one fossil price shock: Report

London, 11 March (Argus) — The net cost for the UK to reach net zero greenhouse gas (GHG) emissions by 2050 is lower than "a single fossil fuel price shock", the country's independent advisory Climate Change Committee (CCC) said today. In all scenarios, for the UK to reach net zero — its legally binding target for 2050 — was a "more cost-effective path for the UK economy than continued reliance on fossil fuels", the CCC said. The total additional cost of a "single fossil fuel price spike of 2022 magnitude is likely to be as large as the total net additional cost of meeting the pathway to net zero across every year to 2050", it said. In a modelled fossil fuel price spike, equivalent to 2022 after Russia's full-scale invasion of Ukraine, the average household energy bill would increase by 59pc under a "high-carbon baseline", but by only 4pc in the CCC's pathway to net zero, the committee found. UK financial watchdog the Office for Budget Responsibility estimates the cost of energy bill support in 2022-23 was £41.7bn ($56.1bn). The CCC has estimated the net additional cost to the UK of reaching net zero GHGs by 2050 at around £4bn annually, on average, in 2025-50, "given the balance between investment costs and operating savings". This is around 0.2pc of annual GDP forecast over the same period, it said. The CCC found investment on average of £26bn/yr will be needed, to be offset by savings of around £22bn/yr thanks to improved efficiency from electrification, increased use of low-cost renewable energy and reduced gas imports. Additional investment costs are "frontloaded" in the CCC's pathway to net zero, with a peak in 2029 and a decline to 2050. Avoiding climate damages is the "most significant benefit" of a UK energy transition, with estimated savings between £40bn-130bn in 2050, the CCC found. Several studies have found the cost of inaction on climate change substantially outweighs the alternative. The UK parliament's cross-party Environmental Audit Committee (EAC) last week said the government must deliver "even benefits to all" through an energy transition, or risk putting public consent at risk . "Where the costs of cutting emissions are experienced early and unevenly, while benefits arrive later or are less visible, public consent for net zero cannot be assumed", the EAC said. The UK government must legislate for the country's seventh carbon budget by the end of June. Carbon budgets, which are legally binding in the UK, cap the total GHGs the country can emit over five-year periods. The CCC has recommended the seventh budget, which covers 2038-42, is set at 535mn t/CO2 equivalent, including international aviation and shipping emissions. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Stargate stall shows ERCOT's planning problem

10/03/26

Stargate stall shows ERCOT's planning problem

Houston, 10 March (Argus) — OpenAI's decision to cancel its expansion at its Stargate artificial intelligence (AI) data center in Texas highlights the challenge the state's grid faces in planning for load projections that are as uncertain as they are massive. OpenAI recently dropped plans to pursue a 600MW expansion at the Crusoe-owned Stargate data center under development in Abilene, Texas. Last September, OpenAI and Oracle announced plans to add 600MW to the additional 4.5GW they announced in July at the west central Texas site. OpenAI will instead expand capacity at other locations it is developing in multiple states, OpenAI's head of computing infrastructure, Sachin Katti, said 6 March on social media. Stargate illustrates the uncertainty now affecting infrastructure decisions tied to large digital loads. Texas utilities are being asked to design and finance billions of dollars worth of transmission lines and substations for loads that may change in size, timing or location, or not proceed at all. Even when developers agree to fund their own connections or build their own power plants, the resulting demand for equipment tightens supply chains and raises costs across the system. "This is about the most uncertain planning you can be doing right now," said Joshua Rhodes, a research scientist at the University of Texas and founder of energy consultancy IdeaSmiths. The 600MW expansion may seem modest in relation to a 1,000 acre site that already has up to 5GW under development, but in terms of existing power systems, it is the size of a large power plant and comparable to some nuclear units, Rhodes said. Gathering storm The axed expansion alone would have required new substations and large transformers or a substantial on-site plant with its own fuel logistics. Its location outside the so-called Texas triangle, which comprises the state's most densely populated areas between Dallas, Houston and San Antonio, further compounds the load demand on a less developed part of the grid. Stargate developers chose Abilene for its proximity to west Texas' prolific natural gas fields and ample wind and solar resources. Renewable power sources and battery storage will be used to supplement gas-fired generation. Officials with the Texas grid operator, known as the Electric Reliability Council of Texas (ERCOT), declined to comment specifically about Stargate, but the agency said it is taking steps to address "significant and rapid growth in large data-center load, often concentrated in specific regions and on similar development timelines". ERCOT is in the process of designing a new approach to evaluate large-load requests that it says will "support continued grid reliability as demand expands". The operator forecasts demand to more than double to 200GW by 2030 — driven by generative AI data centers, crypto currency-mining and industrial consumption — up from a peak of 87GW last summer. Planners should assume only a fraction of that will ever get built, Rhodes said. Based on historical generation queues, he expects about 20pc of the headline numbers to come to fruition. "The thing that I'm the most worried about is the affordability issue," Rhodes said. "You build all this stuff, and if you cancel your expansion, who's left paying for that infrastructure?" Oracle and Crusoe did not respond to requests for comment. By Jasmina Kelemen Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Iran may be mining Hormuz: Trump

10/03/26

Iran may be mining Hormuz: Trump

Washington, 10 March (Argus) — Iran may be attempting to mine the strait of Hormuz, President Donald Trump said on Tuesday, warning Tehran to desist from such a step. "If Iran has put out any mines in the Hormuz Strait, and we have no reports of them doing so, we want them removed, IMMEDIATELY!', Trump posted. Iran would face military consequences "at a level never seen before" if it does not comply, Trump said. "If, on the other hand, they remove what may have been placed, it will be a giant step in the right direction!" The US would be sinking "ships and boats" laying such mines, he said. Tehran has forced a near halt to oil and LNG flows through the strait of Hormuz after the US-Israeli attack began on 28 February with a combination of threats against any ships transiting the waterway and at least eight recorded drone and missile attacks on tankers across the Mideast Gulf. Trump a week ago offered US-backed insurance and naval escorts for the ships willing to transit Hormuz and on Monday, said that "the Strait of Hormuz is going to remain safe." But only a handful of oil tankers have passed through the strait since the war began 10 days ago. US intelligence agencies estimate that Iran had an inventory of 6,000 naval mines as of 2025, according to a report by the Congressional Research Service. Trump also said in a social media post late on Monday that "If Iran does anything that stops the flow of Oil within the Strait of Hormuz they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far." Trump's warnings to Iran somewhat contradict his statements suggesting that Iran's military potential has been effectively extinguished. US energy secretary Chris Wright erroneously posted on social media on Tuesday that the US Navy had escorted a tanker through the strait of Hormuz. Wright deleted the post shortly thereafter, and the White House subsequently said that in fact the US Navy has yet to escort any ship through Hormuz. US Joint Chiefs of Staff chairman General Dan Caine said earlier on Tuesday that the US military is only starting to assess the feasibility of providing naval escorts for the oil and LNG tankers through the Mideast Gulf and the strait of Hormuz. "We'll look at the range of options to set the military conditions to be able to do that," Caine said at a Pentagon briefing. Military commanders will then present their conclusions to Trump and defense secretary Pete Hegseth, detailing "what are the resources required, what is the command and control required, and what are the risks and how do we mitigate those risks", Caine said. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Oil industry seeks EU methane regulation pause

10/03/26

Oil industry seeks EU methane regulation pause

Brussels, 10 March (Argus) — EU refiners and fossil fuel importers called for the application of the bloc's methane emissions regulation to be paused pending amendments. With no changes, the EU risks a self-inflicted supply shock equivalent to 2022 disruptions, with up to 43pc, or 114bn m³, of the bloc's 2024 gas imports and 87pc of its crude oil imports, or some 9.8mn b/d based on 2024 volumes, at risk of being non-compliant in 2027–2029, oil and gas producer body IOGP said. The EU cannot afford a regulatory supply shock in the current geopolitical context, said refiners body FuelsEurope and IOGP. The EU methane regulation entered into force in 2024 but has requirements for importers of crude oil, natural gas and coal on reporting methane emissions from 2027, for contracts concluded or renewed after 4 August 2024. Presenting a study commissioned from Wood Mackenzie, FuelsEurope and IOGP warned that no exporting country has been recognised as equivalent with EU monitoring, reporting and verification (MRV) standards, required from January 2027. Only some 7pc of global oil and gas production meets the reporting standards required by the methane regulation. Additionally, the study points to the lack of a recognized third-party verification protocol and accredited verifiers. Wood Mackenzie finds that EU refinery throughput could fall by some 50pc, or 4.6mn b/d in 2027–2030 as a result of insufficient compliant crude, equivalent to closing 40 EU refineries. Impacts would be less severe under an adaptive scenario, with greater flexibility in granting country-level MRV equivalence, according to Wood Mackenzie. But 20pc, 53bn m³, of natural gas imports and 38pc, 4.3mn b/d, of crude oil imports into the EU, in 2024 volumes, could still be excluded. EU energy ministers discussed their implementation concerns in December last year. The European Commission then noted that the methane regulation requires member states not to "endanger" security of supply when applying penalties. The commission said the methane regulation is open to different compliance solutions. Importers can show compliance through contractual evidence as well as methane MRV information, the commission told energy ministers. The study indicated that Europe's fuel import bill could rise by more than $17bn annually under the regulation. But it noted that while gas prices risk being over twice as high, they still fall "well short" of average prices in 2022 at the start of the Russia-Ukraine war. "We're not asking for five or ten years," said IOGP Europe managing director Francois-Regis Mouton. The industry wants time for discussion and for the EU to vote an amended regulation that can be implemented. "We don't need tens of changes in the regulation," added Mouton. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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