GLOBALVARS
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Current conditions: August 2026 has tied with July 2023 as the hottest month the world has ever recorded • The Pacific’s hurricane churn continues as Tropical Storm Norbert strengthens off the coast of Baja California • Temperatures are nearing 90 degrees Fahrenheit in Samarkand, Uzbekistan, where Bukharian Jews are just now — as we hit publish on this newsletter — ringing in Rosh Hashanah, the Jewish new year, at the grand 135-year-old Gumbaz Synagogue.
THE TOP FIVE
1. Oil prices surge again as Iran-backed Houthis capture strategic Red Sea port
The chief benchmark for crude oil produced in the United States surpassed $100 per barrel Thursday as Iran-backed Houthi rebels seized control of a key port in the Red Sea, intensifying Tehran’s effort to loosen Washington’s grip on the region’s key shipping lanes. West Texas Intermediate closed at just below $104 per barrel, while Europe’s Brent crude soared more than 6% to about $108. Murban crude out of the United Arab Emirates hiked 5% to nearly $123. The surge came as the Iran War heats up, with The Wall Street Journal breaking news that Tehran is once again manufacturing ballistic missiles to make good on its promise to retake at least partial control of another key waterway, the Strait of Hormuz. On Thursday morning, the Houthis ousted Yemeni government forces from the port city of Mokha, giving the militant army a better position from which to attack ships passing through the Red Sea. By evening, satellite images began circulating of smoke billowing from the East-West Pipeline that spans Saudi Arabia, which serves as the kingdom’s primary means of routing oil around the conflict zone at the Strait of Hormuz. If U.S. crude prices remain lower than the other global benchmarks, it’s because America is on track for record production this year, according to a new analysis by the U.S. Energy Information Administration. But that has done little to prevent diesel from hitting $6 per gallon for the first time in U.S. history, at what my colleague Matthew Zeitlin called “the worst time.”
Oddly enough, this may be the first perfect time for the Trump administration to cut an oil deal that can shore up the Strategic Petroleum Reserve. Back in March, the U.S. agreed to release 172 million barrels to ease soaring oil prices after the war began. Some 39 million barrels have not yet been delivered. If the Department of Energy sells the barrels through an emergency drawdown instead of a trade, as it did with previous releases, and simultaneously agrees to buy back oil at the lower prices the futures market is trading at now, the Trump administration can bring in an even bigger profit. That profit can in turn go to the $230 million backlog of physical repairs needed on the actual infrastructure that stores the U.S. crude reserve. That’s the proposal pitched in a new policy memo out yesterday from the think tank Employ America. “There’s a real opportunity where, if we’re going to have releases, you can yield this profit in dollar terms that could actually pay for a lot of upgrades that the asset needs,” Arnab Datta, Employ America’s managing director of policy implementation, told me by phone last night. “This could be enough to permanently build the SPR to be fully equipped for the country for the coming decades.”
2. South Korea is considering building eight nuclear reactors in the U.S.
The South Korean government is weighing a $120 billion investment in the U.S. that will include building eight nuclear reactors as part of a trade pact set to be unveiled later this month. At least for the first four units, Korea JoongAng Daily reported, the Koreans would build two and the U.S. would finance the others. The exact technology is up for debate. Citing unnamed government sources in Seoul, the newspaper said South Korea wants to build a pair of APR1400s, the Korean reactor that U.S. developer Westinghouse accused of ripping off its AP1000 design. As a result of a settlement between Westinghouse and South Korea’s state nuclear company, the Koreans can’t build more APR1400s in key markets such as Europe or North America. But Seoul appears to believe there could be an exception for a domestic project in the U.S. The two U.S.-backed units, as my colleague Robinson Meyer’s reporting from earlier this year suggests, would likely be AP1000s.
China, meanwhile, just unveiled the new version of its AP1000 rival, the Hualong One. At an industry conference in Shenzhen this week, the state-owned China General Nuclear revealed an upgraded reactor that Beijing explicitly plans to start shopping around for exports, marking one of the clearest signals yet that the People’s Republic is getting into selling atomic power plants overseas. So far, China has only exported its nuclear technology to Pakistan, leaving Russia to dominate the market. “The upgraded reactor design not only cements China’s self-reliance in cutting-edge nuclear engineering, but also dramatically elevates the commercial appeal of Chinese nuclear solutions in international tenders,” Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, told the state-controlled China Daily. “By driving down full lifecycle capital and maintenance costs while raising safety standards, it positions China as an increasingly indispensable partner in the global clean energy transition.”
3. Finland’s opposition party raises concerns over Google’s landmark nuclear deal
You may recall from yesterday’s newsletter that Google has inked a first-of-a-kind deal with the Finnish utility Fortum to buy up to half the power produced at a major nuclear station, helping to finance its life extension through 2050. While power purchase agreements are common in the U.S., this type of corporate deal is new for Europe. Not everyone is pleased. The agreement is part of a broader $15 billion investment the tech giant is making into data center infrastructure in the Nordic nation. “A national permitting system for new data center investments would be needed. At the moment, no one is really looking after the overall picture,” Centre Party leader Antti Kaikkonen, whose centrist party is the second-largest opposition group in parliament in Helsinki, told Reuters.
In France, meanwhile, the national utility EDF has found “no major technical obstacles” to extending the operating lives of 32 reactors beyond 60 years, according to the European energy publication Montel.
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4. China is investing in Brazilian hydro
Brazil is rich in oil and pumping record volumes of the stuff. Wind and solar are expanding rapidly. And even the country’s tiny nuclear sector is eyeing an expansion as part of a bigger push into mining. But hydroelectricity is the backbone of the Brazilian grid. Unlike the U.S., where hydro faces drought and permitting problems, Brazil’s sector is expanding and China wants a piece of the action. Spic Brasil, a subsidiary of China’s State Power Investment Corporation, signed a $272 million deal Thursday to expand the São Simão Dam in north São Paulo state, Reuters reported. The upgrade will add 310 megawatts of power to the plant by 2030.
5. Ex-Tesla exec’s grid equipment startup raises gets a $60 million credit line
Six months after closing a $140 million Series B, Heron Power has unveiled a $60 million credit line backed by J.P Morgan and TriplePoint Capital. The startup founded by former Tesla executive Drew Baglino is focused on next-generation transformers and other grid equipment. The company is now adding Zach Kirkhorn, Tesla’s former chief financial officer, to its board of directors. “A strong balance sheet and bench of advisors is key as we move from engineering to scale,” Baglino said in a press release. In June, as I told you at the time, Heron made a manufacturing deal with the South Korean giant LG Energy Solution.
THE KICKER
The most abundant element in the universe is becoming an increasingly abundant clean fuel. The global capacity for clean hydrogen production has so far grown to 1.7 million metric tons per year in 2026, and is on track to more than double next year as new projects come online. That’s according to the Hydrogen Council, the world’s largest trade group for the fuel. But Hydrogen Insight noted that demand by 2030 “remains uncertain.”
