An escalating dispute at major gas facilities in Australia could drive up European prices, analysts say
Liquefied natural gas (LNG) storage units at Grain LNG importation terminal, operated by National Grid Plc, on the Isle of Grain on August 22, 2022 in Rochester, England.
Dan Kitwood | Getty Images News | Getty Images
The looming threat of strikes at Australian natural gas facilities will keep global gas markets on tenterhooks, energy analysts told CNBC, with traders fearing that a prolonged halt to production could squeeze global supplies and send European prices higher.
U.S. energy giant Chevron and unions representing workers at the Gorgon and Wheatstone projects in Western Australia are in daily talks this week to try to come to an agreement over pay and job security. The Fair Work Commission, Australia’s independent workplace relations tribunal, is mediating talks between both sides.
If a deal cannot be agreed, the strikes are scheduled to begin from 6 a.m. local time Thursday. The long-running dispute escalated even further on Tuesday as a union alliance announced plans to strike for two weeks from Sept. 14.
“In response to Chevron’s [duplicitous] claim that our EBA negotiations are ‘intractable’, the Offshore Alliance is escalating Protected Industrial Action to [demonstrate] that our bargaining negotiations are far from ‘intractable,'” the Offshore Alliance said in a Facebook post.
“Offshore Alliance members are yet to exercise their lawful workplace rights to take Protected Industrial Action and our bargaining claims will look more and more reasonable as Chevron’s Gorgon and Wheatstone LNG exports dry up.”
In response, a Chevron Australia spokesperson told CNBC, “We’re looking to narrow points of difference with Gorgon and Wheatstone downstream employees and their representatives through further bargaining mediated by the Fair Work Commission.”
There is so little flexibility in the market that the slightest provocation will cause large changes to the prices.
Jacob Mandel
Senior research associate for global energy markets at Aurora Energy Research
Fears of strike in Australia, one of the world’s biggest exporters of liquified natural gas (LNG), have recently pushed up European gas prices — and analysts expect near-term volatility to persist.
Jacob Mandel, senior research associate for global energy markets at U.K.-based consultancy Aurora Energy Research, said the global natural gas market was currently “very tight” and “very little supply flexibility” means that strike action in Australia could send European gas prices higher.
“Prices have moved quite significantly on basically little bits of news on what’s happened to these two facilities because there is so little flexibility in the market that the slightest provocation will cause large changes to the prices,” Mandel told CNBC via videoconference.
He said that European gas prices could climb to above 40 euros ($42.9) per megawatt hour if the strikes go ahead as planned. The front-month gas price at the Dutch Title Transfer Facility (TTF) hub, a European benchmark for natural gas trading, traded at 33.5 euros on Tuesday.
The TTF contract rose sharply to around 43 euros last month. TTF prices have since pared gains, however, and remain well below last summer’s extraordinary spike to more than 300 euros.
“I think it is extremely unlikely prices will go anywhere near where they were last September, where they hit these massive record peaks,” Mandel said. “Prices reached those peaks under extraordinary circumstances, which in theory could have been replicated. However, in Europe, we’ve taken many steps that could keep prices from reaching such a high.”
“It doesn’t mean that prices could increase above this 40 per megawatt hour level and if something else happens — a sudden winter storm, or something like this — certainly this can push [prices] higher,” he added.
Kaushal Ramesh, head of gas and LNG analytics at research firm Rystad Energy, said looming industrial action at Chevron’s Gorgon and Wheatstone facilities suggested near-term volatility could continue until a resolution is reached.
“We still don’t think there will be a material impact on production,” Ramesh said, citing the resolution of other similar disputes. He noted that it may become difficult for Chevron to prolong the strikes if they do go ahead.
“Whatever monetary impact there may be to Chevron from giving in to the workers’ demands is likely a fraction of lost revenue if production were to be substantially impacted,” Ramesh told CNBC via email.
“Thus, these are political developments, and things can get irrational, but so far, Asian buyers have not been too concerned. This winter, Japan and Korea will have an additional 6 GW of nuclear power available compared to the previous year.”
Another ‘big question mark’ for Europe
Wild price swings in energy markets in recent weeks come as the euro zone continues to wean itself off Russian fossil fuel exports following the Kremlin’s full-scale invasion of Ukraine.
Last month, the EU hit its target of filling gas storage facilities to 90% of capacity roughly two-and-a-half months ahead of schedule, bolstering hopes the bloc has secured enough fuel supplies to keep homes warm during winter. Nonetheless, the region’s gas market remains sensitive.
“Europe’s gas markets remain nervous, as seen in the jump in prices in August at the threat of an LNG worker strike in faraway Australia,” said Henning Gloystein, a director for energy, climate, and natural resources at political consultancy Eurasia Group.
“Real disruptions” are possible this winter, Gloystein said, including Norwegian winter storm outages or a cut of the remaining Russia gas to Europe. He warned that a stoppage of pipeline transit via Ukraine or a suspension of Russian LNG shipments were two notable risks for Europe.
One “big question mark” adding a risk premium to costs in Europe, Mandel said, is the future for the transit of Russian gas through Ukrainian territory, which is scheduled to expire at the end of next year.
Oleksiy Chernyshov, the chief executive of Ukraine’s largest oil and gas company Naftogaz, told CNBC in mid-August that the Russian gas transit agreement “is actually quite a complex issue.”
“I just wanted to make very clear Ukraine is servicing this transit actually in favor of European Union countries that are consuming Russian gas,” Chernyshov said. “We clearly understand that some of the countries cannot immediately get rid and stop consumption because they need it for the preparation for the winter.”
A spokesperson for the European Commission, the EU’s executive arm, told CNBC that the gas transit agreement is “still a long way from now” and they cannot speculate on what the situation would like in 18 months’ time. “It is also not for us to speculate nor comment on the two parties’ interest for a renewal of such contract,” they added.
The spokesperson said under the EU’s REPowerEU plan, the bloc’s objective is to “completely phase out Russian fossil fuel imports as soon as possible.” They noted that Russian gas now represents less than 10% of the EU’s pipeline imports, compared to roughly 50% before the energy crisis spurred by Russia’s full-scale invasion of Ukraine.
Tesla (TSLA) board members have received a wake-up call letter from eight state treasurers, asking them to fulfill their duties and supervise the company’s CEO, Elon Musk.
Will they ignore this warning as well?
There have been concerns about Tesla’s board sleeping at the wheel for a while now.
Their job is to oversee Tesla’s management for the benefit of shareholders, but Tesla’s stock is down almost 40% this year while the CEO is splitting his time between 6 different companies and projects while alienating most of Tesla’s consumer base.
Yet, the board hasn’t said a word about it.
The situation lends weight to the argument that the board is entirely under Musk’s control, which is the main point of contention in Tesla’s $55 billion CEO compensation case.
Now, eight state treasurers have joined forces to raise their concerns with the board. They wrote in a letter addressed to Robyn Denholm, chair of Tesla’s board:
We are increasingly concerned that Tesla’s recent performance signals deeper governance and leadership challenges that, if left unaddressed, could have serious consequences for the company and its stakeholders. In the first quarter of 2025 alone, Tesla’s stock declined by 36%. The company missed delivery targets, recalled a substantial number of vehicles, and experienced a surge in trade-ins for competing brands. Meanwhile, CEO Elon Musk continues to divide his attention across multiple companies and a high-profile advisory role within the federal government. These external commitments raise serious questions about whether Tesla’s leadership is fully engaged in addressing the company’s core challenges.
In the letter, the treasurers remind Tesla’s board of its duty “to provide strong oversight, uphold fiduciary standards, and ensure that the company’s leadership is aligned with the long-term best interests of the company.”
They are directly asking the board three questions:
- How is the Board ensuring that Mr. Musk and Tesla’s leadership team are devoting adequate time and focus to resolving recent performance issues and guiding the company’s future direction?
- In light of the company’s underperformance, how is the Board evaluating whether executive compensation remains aligned with shareholder value and corporate accountability?
- How does the Board plan to communicate its strategy for navigating this period of uncertainty and restoring investor and public confidence in Tesla’s leadership?
Tesla is going to release its Q1 2025 financial results today, hold its earnings conference call, and have a “live company update.’ Maybe some of these questions will be answered.
Here’s the letter in full:
2025-04-17 Letter to Tesla Board Chair
April 17, 2025
Robyn Denholm
Chair of the Board
Tesla, Inc.
1 Tesla Road
Austin, TX 78725
Dear Chair Denholm,
We are entrusted with promoting the long-term economic health and financial stability of our states and the people we serve. Tesla, Inc. is not just one of the world’s most valuable companies—it is a major player in the clean energy economy and a leading force in emerging technologies such as robotics and autonomous driving. The company’s success or setbacks have significant implications for workers, regional industries, and innovation ecosystems in our states.
We are increasingly concerned that Tesla’s recent performance signals deeper governance and leadership challenges that, if left unaddressed, could have serious consequences for the company and its stakeholders. In the first quarter of 2025 alone, Tesla’s stock declined by 36%. The company missed delivery targets, recalled a substantial number of vehicles, and experienced a surge in trade-ins for competing brands. Meanwhile, CEO Elon Musk continues to divide his attention across multiple companies and a high-profile advisory role within the federal government. These external commitments raise serious questions about whether Tesla’s leadership is fully engaged in addressing the company’s core challenges.
We regularly interact with stakeholders across our states, including institutional investors, industry leaders, workers, and small businesses. We are hearing increasing concern about Tesla’s direction, not only from financial professionals but from those who have looked to Tesla as a leader in clean energy innovation and American industrial renewal. If Tesla falters, the effects won’t be confined to shareholders—they will ripple through regional economies, workforce pipelines, and public confidence in the energy transition.
At a moment when American industrial leadership is facing stiff global competition, it is essential that companies like Tesla are governed with focus, discipline, and clarity of mission. The Board’s role is especially critical now—to provide strong oversight, uphold fiduciary standards, and ensure that the company’s leadership is aligned with the long-term best interests of the company. Public officials like us do not take the step of raising these concerns lightly except when the obvious risks demand it.
We believe the Tesla Board has a responsibility to act decisively to ensure the company returns to a stable and focused trajectory.
We respectfully request the Board provide clarity on the following:
- How is the Board ensuring that Mr. Musk and Tesla’s leadership team are devoting adequate time and focus to resolving recent performance issues and guiding the company’s future direction?
- In light of the company’s underperformance, how is the Board evaluating whether executive compensation remains aligned with shareholder value and corporate accountability?
- How does the Board plan to communicate its strategy for navigating this period of uncertainty and restoring investor and public confidence in Tesla’s leadership?
Finally, we strongly believe Tesla’s Board would benefit from engaging with public sector stakeholders who share an interest in the company’s long-term value and societal impact. We welcome the opportunity to speak further about these concerns and discuss how the Board can take swift and transparent action to restore investor confidence and public trust in Tesla’s leadership and the company’s future.
We welcome a response and the opportunity for continued dialogue.
Signed,
Mike Pellicciotti, Washington State Treasurer
Deborah B. Goldberg, Massachusetts State Treasurer and Receiver-General
Michael W. Frerichs, Illinois State Treasurer
Erick Russell, Connecticut Treasurer
Laura M. Montoya, New Mexico State Treasurer
David L. Young, Colorado State Treasurer
Mike Pieciak, Vermont State Treasurer
Malia M. Cohen, California State Controller
Electrek’s Take
Tesla is a $700 billion publicly traded company that is run like a family business by Musk, who owns just 13% of the float.
The board, which was so handsomely rewarded that it had to return almost $1 billion worth of compensation as part of a shareholder lawsuit, is letting Musk do whatever he wants without any objection.
It’s clear that they have a quid pro quo with Musk, whereby they receive compensation at a rate several times higher than any other similarly sized company in exchange for allowing Musk to run Tesla as if it were his private company.
While I am glad they sent this letter, I doubt that a group of state treasurers will convince Tesla’s board to do anything.
At this point, they are either completely fine with Musk destroying Tesla or they believe his claims about self-driving technology.
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Chevron is not seeing signs that the U.S. is close to a recession even as President Donald Trump’s tariffs weigh on expectations for oil demand, CEO Mike Wirth said Tuesday.
“There’s no signs that we see at this point that we are in or close to a recession,” Wirth told CNBC’s “Squawk Box.” “There are signs that growth may be slowing and we have to always be prepared for that.”
The International Monetary Fund on Monday cut its growth outlook for the U.S. this year to 1.8%, down from 2.7% previously.
The oil market is expecting reduced demand as a consequence of Trump’s tariffs and the decision by OPEC+ increase production faster than expected, Wirth said. Chevron isn’t changing its capital spending plans in response to drop in prices, the CEO said.
U.S. crude oil prices have fallen about 11% since Trump announced his tariffs on April 2. West Texas Intermediate was last up about 72 cents at $63.80 per barrel. OPEC and the International Energy Agency have cut their demand outlooks for this year.
Wirth said U.S. onshore oil production in patches like the Permian Basin is likely to pull back if prices hit $60 per barrel. Offshore production likely won’t be affected, he said.
“That’s an area where if we were to be at a $60 price or even lower you’re likely to see activity pull back in this sector and you’ll see the production response over a few months,” Wirth said. “That’s what we should watch, not so much the deep water activity.”
Chevron is not expecting a major direct impact on its business from Trump’s tariffs as energy has largely been exempt from the levies, Wirth said.
“The effects that we feel are likely to be more the macroeconomic effects as they flow through the economy,” Wirth said. “The bigger issues would be what would it mean for growth, and global trade and how does that evolve.”
Executives at oil and gas companies were scathing in their criticism of Trump’s tariffs in an anonymous March survey by the Federal Reserve Bank of Dallas, warning that steel tariffs were raising their costs and low prices could impact their activity.
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Little is known about super-secretive EV startup Slate, but the fledgling brand is rumored to be backed by Jeff Bezos and determined to shake up the existing electric order with an affordable lineup of compact SUVs and pickups with that golden $25,000 price tag.
Now, at least, we know what it’s gonna look like. The battle of the billionaires is on!
Redditor jonjopop over at the spotted subreddit spotted what looks like an early prototype of an unbranded SUV with bizarre “CryShare” wrap. CryShare, as a concept, seems to combine the functionality of a ride sharing app like Uber or Lyft with the familiar (to parent, anyway) idea that small babies will often sleep better in a moving car than in their own cribs … but that’s not what’s important here.
Instead, focus on the vehicle itself – parked on Abbot Kinney Boulevard in Los Angeles without explanation or fanfare, this is our best look yet at the kind of vehicle(s) Slate is likely to reveal in the coming days.
Stumbled upon the Bezosmobile [Slate Automotive…idk?] being revealed with an absolutely bizarre marketing campaign
byu/jonjopop inspotted
Other local automotive journalists caught wind of the public unveiling, too – and our friends at The Autopian (Hi, Matt!) sent their own David Tracy out on the streets of LA to check it out. Tracy took the following video and posted it to Instagram.
The Slate breaking cover and causing buzz just ahead of what’s sure to be a painful Q1 earnings call for Tesla is a masterstroke of marketing – especially as doubts surrounding the viability of a “less expensive” Tesla Model Y or Model 3 continue to mount amid the uncertainty of Trump’s tariffs and declining sales of the brand’s more profitable models both at home and abroad.
As with so much involving Slate, however, there is nothing here written in stone – or even cast in cheese. Nothing has been announced, nothing is promised, and for all we know this might have more to do with the affordable Rivian brand launch, a new BYD, or be a viral marketing bit from some local Art Center design student in (relatively) nearby Pasadena. In fact, about the only thing I think we can say about Bezos (?) new Slate project with confidence today is this: Elon could probably use that drink.
SOURCES | IMAGES: Reddit, The Autopian.
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