Prince Abdulaziz bin Salman Al-Saud, Minister of Energy of Saudi Arabia arrives for the 178th meeting of the Organization of Petroleum Exporting Countries (OPEC) in Vienna, Austria, on March 6, 2020.
Alex Halad | AFP | Getty Images
Disagreement within OPEC could trigger a more a volatile period for oil, with prices jumping on lack of new supply or sinking suddenly if member countries decide to release crude independently.
Oil prices initially surged to a six-year high on news that the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, ended their meeting Monday with no action and no new meeting date. A proposed plan by OPEC, Russia and other allies to bring 400,000 barrels a day back to the market was disrupted by the United Arab Emirates’ objection to other aspects of the deal.
West Texas Intermediate crude futures for August traded as high as $76.98 Tuesday before falling back to settle down 2.4% at $74.53 per barrel. Many analysts had expected oil to rise on the discord among members of OPEC, and say prices could still climb despite the sell-off.
“It’s going to get worse before it gets better. I still think $85 to $90 per barrel should be the upper end,” said John Kilduff, partner with Again Capital. “You’ll see more oil produced. They’re not going to go crazy, but they’re not going to live within the current structures. Russia will lead the charge.”
“It could become a free for all,” he said.
Some analysts had already expected oil spikes into the $100 per barrel range over the course of the next year. The feuding between Saudi Arabia and the United Arab Emirates opens a new fissure in OPEC, which now means oil could also tank if members decide to open the spigots.
“Realistically, I don’t think anybody wants to go this way. I suspect cooler heads or rational thinking will prevail,” said Bart Melek, global head of commodity strategy at TD Securities. Melek said there are some wild cards for OPEC that could affect prices. A major one is whether the U.S. and Iran strike a deal on Iran’s nuclear programming, allowing it to return more than 1 million barrels a day back to the market.
Another risk is whether the variants of the Covid virus could affect the economy’s recovery and crimp demand for travel.
OPEC and its partners were able to agree to return 400,000 barrels a day to the market starting in August. But the UAE sought to also have its production baseline increased from 3.1 million barrels a day to 3.8 million barrels, and that was the sticking point with Saudi Arabia.
After three days of meetings, there was also a deadlock over whether the deal would include an extension of the the plan to the end of 2022, which was opposed by the UAE. Without an agreement, 5.8 million barrels a day, cut from production last year, will remain off the market even as demand rises.
“I think OPEC event risk is back. We had pretty smooth sailing this year, and now this was not priced at all,” said Helima Croft, global head of commodity strategy at RBC Capital Markets. “Once people start focusing on 5.8 million barrels off the market, I think they might get nervous. How they come back will be important.” The market will be affected much differently based on whether the oil trickles back or the producing countries flood the market with supply.
The friction between Saudi Arabia and the UAE, formerly strong OPEC allies, comes at a time when the market is increasingly in need of more supply. Analysts expect the world is short of upwards of 2 million barrels a day, based on current production levels and increasing demand. That means oil is being taken from storage, and there could be increasing pressure on prices as the economy rebounds and demand rises.
The U.S. is producing about 2 million barrels a day less than it did pre-Covid, and output has remained at a steady level even as prices rise. The U.S. industry has become more disciplined, due to demands from shareholders and lenders. Oil companies also face sustainability demands and pressure to reduce carbon.
But U.S. drillers do have capacity to increase drilling. “Certainly, $90 oil would encourage a lot of drilling in not only the Permian, but in the Bakken and Rockies,” Andy Lipow, president of Lipow Oil Associates said. “I think as prices creep up, one of the things [OPEC+ members] are worried about is a spike higher that would encourage lots of drilling in other parts of the world.”
Lipow said OPEC will also be careful about falling prices and the potential for even lower levels. “If prices fall $5 a barrel, they’ll come to an agreement to signal the market they’re not going to flood it with supplies,” he added.
It also comes as gasoline prices continue to rise and are nearly $1 per gallon higher than this time last year. The national average for unleaded was $3.13 per unleaded gasoline Tuesday, following a weekend where prices at the pump were the highest in seven years for the Fourth of July holiday, according to AAA. If crude prices continue to rise, so will gasoline prices.
“I think gasoline prices could remain above $3 a gallon for the balance of the summer,” said Lipow.
The White House Tuesday said there have been a number of high-level conversations with officials in Saudi Arabia, the UAE and other partners.
“If prices were rising, I think that would be more of a catalyst for the White House to get involved,” said Croft. “If you have a sell-off you may have people in the administration saying why do I need to be involved in this.”
Kilduff said he does not think the situation will last much longer. “I think we’re in the last innings of it right now. I’m targeting in mid-August, you’re going to start to see gasoline demand going down because kids are going back to school. Refiners will start to dial back,” he said.
Electricity demand is skyrocketing across the Middle East and North Africa, and it’s being driven by two big factors: cooling homes and businesses in extreme heat, and making seawater drinkable through desalination. A new report from the International Energy Agency (IEA) shows just how dramatic the surge is. Electricity use in the region has tripled since 2000, and it’s expected to jump another 50% by 2035. That’s like adding the current combined electricity demand of Germany and Spain.
Cooling and desalination alone are expected to account for about 40% of that growth over the next decade. Urbanization, industrialization, the electrification of transport, and the boom in data centers are also adding to the load, according to the IEA’s report, “The Future of Electricity in the Middle East and North Africa.”
Right now, natural gas and oil overwhelmingly dominate power generation in the region, making up more than 90% of electricity supply. But that mix is changing. Many countries, including Saudi Arabia and Iraq, are trying to reduce oil-fired power to free it up for export. The IEA says natural gas will likely cover half the demand growth through 2035, with oil’s share falling from 20% today to just 5%.
Renewables are on the rise, too. Solar capacity is set to increase tenfold by 2035, growing by 200 gigawatts (GW), which would boost renewables’ share of the electricity mix to around 25%, up from 6% in 2024. Nuclear power is also expected to triple over the same period.
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“Demand for electricity is surging across the Middle East and North Africa, driven by the rapidly rising need for air conditioning and water desalination in a heat- and water-stressed region with growing populations and economies,” said IEA executive director Fatih Birol. “To meet this demand, power capacity over the next 10 years is set to expand by over 300 GW, the equivalent of three times Saudi Arabia’s current total generation capacity.”
Meeting that demand won’t come cheap. Investment in the power sector hit $44 billion in 2024, and it’s projected to grow another 50% by 2035. Nearly 40% of that spending is expected to go toward upgrading grids, which currently suffer losses that are double the global average.
The IEA says grid upgrades and stronger regional interconnections will be critical for electricity security. Balancing renewables will also require more energy storage, demand-side flexibility, and enough gas-fired plants to cover when solar and wind aren’t available.
Energy efficiency improvements could ease some of the strain. For example, air conditioners in the region are less than half as efficient as those in Japan. Upgrading the ACs alone could cut peak demand growth by an amount equal to Iraq’s entire current power capacity.
If countries move more slowly on diversifying their power mix, according to the report, the stakes are high. Carbon dioxide emissions would continue to rise, and oil and gas demand for electricity could increase by more than a quarter by 2035, cutting export revenues by $80 billion and raising import bills by $20 billion.
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Is it just me, or do too many new vehicles look about the same? Hyundai believes it’s time to end a popular trend that nearly every EV has nowadays.
Hyundai looks past the LED lightbar for new EV design
The LED light bar has been around for a while. In the early 2000’s Xenon headlights were the hit trend, offering much brighter light while consuming less energy.
Although it was initially mainly found on luxury vehicles, Hyundai was one of the first to jump on the trend, working to make it more widely available at a lower cost.
Over the past few years, the trend has evolved into a thin LED light strip stretched across the front and sometimes the rear of the vehicle.
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Since most brands are slapping it on electric vehicles, it’s become almost a status symbol of the EV movement. In early 2023, Hyundai revealed the new “EV-derived, futuristic” design for the Kona Electric, placing a heavy emphasis on the front LED lightbar.
Hyundai Kona Electric N Line (Source: Hyundai)
Nowadays, nearly every vehicle, EV or gas-powered, has the popular design feature. Even Tesla hopped on the trend with the new Model Y, Model 3, and Cybertruck.
According to Hyundai’s design boss, Simon Loasby, LED lightbars are “almost at the end of their journey.” After unveiling the new Concept Three at the Munich Motor Show last week, Loasby explained to Car Magazine on the sidelines, “When is the time you need to let go [of light bars], it’s almost like the end of that.”
The 2026 Hyundai Sonata Hybrid Limited with an LED lightbar (Source: Hyundai)
Although Hyundai recently added the lightbar to the Grandeur, Kona, and Sonata, Loasby said he’s “seen enough.”
“It worked at the time, and it was absolutely right, the Grandeur was the first car with a one-piece structure. The biggest thing is the cost level, you just can’t afford to do it and some customers don’t need it,” Hyundai’s design chief explained.
Hyundai IONIQ 9 (Source: Hyundai)
In China, “you must have it,” Loasby said, but in other markets, like Europe and the US, it’s not needed. Hyundai is instead focusing on differentiating itself with its unique pixel lightning, found on the IONIQ EV models.
Hyundai has already had a few copy its design, notably the Fiat Grande Panda, which Loasby joked, “thanks for copying, thanks for being inspired by us.”
The Hyundai Concept THREE EV, a preview of the IONIQ 3 (Source: Hyundai)
It may be time for a shake-up. Loasby said, “I think we are almost at the end of journey in terms of lighting. It’s almost like chrome.”
Hyundai’s new Concept Three, which is expected to launch as the IONIQ 3 in production form, did not feature a full LED lightbar. Instead, it had an updated pixel lightning design.
Electrek’s Take
I have to agree with Loasby on this one. I must admit that at first, I was a fan of the sleek look of a nice, slim lightbar, especially at night.
The more I see it, the more it reminds me of a Toyota now. And that’s nothing against them (It is the world’s largest automaker), but should a Tesla Model Y, or even a Porsche 911, look the same as a Toyota from the front? I’ll let you determine that one.
I drive a 2023 Tesla Model 3, the last of the pre-facelift version, and was pretty bummed to see how cool the updated Model 3 looked at first. The more I see them, though, the more I like the design of the first-gen Model 3 and its wide eyes. It’s unique. Now, the Model 3 looks like any other vehicle, at least, in my opinion.
Is it time to put an end to the LED lightbar? Let us know how you feel about it below.
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Zero 60, an EV charge point operator on the ChargePoint network, is bringing fast charging to a Culver’s in the Northwoods of Wisconsin. The company, founded by Faith Technologies Incorporated (FTI), will install a renewable-powered charging station in Rhinelander.
The new site sits along a state-designated Alternative Fuel Corridor at Culver’s on 620 W. Kemp St. It will feature four 160-kilowatt charging ports, giving EV drivers in northern Wisconsin reliable fast charging well beyond the state’s urban hubs.
The project is backed by the Wisconsin Department of Transportation’s first round of funding from the Wisconsin Electric Vehicle Infrastructure (WEVI) program. Wisconsin wants to ensure EV drivers can confidently travel north, knowing they won’t be stranded without chargers.
“Partnering with a well-known brand like Culver’s gives us a unique opportunity to combine Midwest hospitality with clean, convenient charging,” said Wade Leipold, executive vice president of FTI. “We’re proud to support Wisconsin’s efforts to build a robust, future-ready charging network that serves communities and travelers alike.”
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Zero6 Energy is financing, owning, and operating the station, while FTI is handling the engineering, design, installation, and ongoing maintenance. Zero 60 already operates nine charging sites and has plans for many more across the US, with the first wave of stations installed in New York, California, Colorado, and Wisconsin, and more currently being developed in other states.
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Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
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