Energy market analysis Sept. 24, 2025

“Operation ‘Let’s get the oil’ is back on track …” – Chris MacIntosh, InternationalMan.com

America is shifting its geopolitical focus from an east-west to a north-south axis, in part because of the vulnerability of their naval forces to modern Russian missiles. This leads to increased focus on influence in North and South America, with pressure on countries such as Canada, Mexico, Brazil, Panama and Venezuela.

The relationship between Trump and Venezuelan President Maduro has deteriorated into an open power struggle, mainly focused on Venezuela’s vast oil reserves. In 2020, America placed a bounty on Maduro’s head for alleged drug trafficking, further raising tensions. Both leaders conduct their conflict partly through social media, focusing on oil and geopolitical influence.

Despite having the world’s largest proven oil reserves, Venezuelan oil production has fallen sharply due to mismanagement, corruption and international sanctions. U.S. sanctions have cost Venezuela billions from 2017 and restricted access to international markets.

China is now investing heavily in the Venezuelan oil sector, increasing its influence in the region. The conflict between America and Venezuela reflects broader geopolitical rivalries over energy resources in Latin America. Despite its enormous oil potential, Venezuela faces serious economic and humanitarian problems: hyperinflation, shortages of basic goods and mass emigration of citizens (more than 7 million Venezuelans).

The battle over Venezuela’s oil is part of a larger power struggle in Latin America that centers on energy resources, economic sanctions and geopolitical alliance politics. It shows how resources (oil) and international political pressure (sanctions, diplomacy, rhetoric) are intertwined. There are opportunities for foreign investors, but also significant risks from sanctions, political instability and infrastructure problems.

Price Crude oil – Brent November 2025 ($/barrel) – day cloud candle, log scale

U.S. power grid near breaking point

“This is not a technical challenge, but an economic and political reckoning. If the power grid fails, it won’t be because we didn’t have solutions. It will be because we didn’t act fast enough.” – Robert Rapier, chemical engineer in the energy industry

The US grid is under intense pressure from rapidly rising electricity demand from AI data centers and electric cars coinciding with the exit of traditional power plants. The grid faces increasing vulnerabilities from extreme weather events, cybersecurity threats and physical sabotage while policy deadlock and infrastructure delays impede needed upgrades. Despite challenges, the situation presents investment opportunities in grid modernization, diversified generation and energy storage and load management solutions.

America’s power grid is straining under the weight of a rapidly changing energy landscape. Beyond the usual hum of air conditioners, the demand from EV chargers and sprawling new data centers is soaring. At the same time, the infrastructure needed to provide reliable electricity is aging and has reached its limits. From Texas heat waves to California blackouts, the warning signs are impossible to ignore. This is not a technical challenge; it is an economic and political reckoning. If the grid fails, it will happen because action was not taken quickly enough.

An increase in demand that few anticipated. For nearly two decades, U.S. electricity demand was flat. Now consumption is increasing, driven by technologies that are growing faster than expected.

Artificial intelligence has unleashed a wave of data center construction. These facilities, packed with high-performance servers and cooling systems, are one of the most electricity-hungry assets in the country. In 2023, AI data centers consumed about 4.4% of U.S. electricity. This share could triple by 2028, according to Penn State’s Institute of Energy and Environment.

Northern Virginia “Data Center Alley” now accounts for handling 70% of the world’s Internet traffic. It isforcing utilities like Dominion Energy to hastily ramp up their capacity. Meanwhile, Microsoft and Google warn that a shortage of skilled electricians could slow expansion. It is estimated that America will need 500,000 more electricians over the next decade.

Electric cars, heat pumps and electrified industry add to further excitement. The Pacific Northwest Utilities Conference Committee predicts growth equivalent to seven cities the size of Seattle within 10 years. The Energy Information Administration (EIA) expects U.S. electricity sales to increase from 4.097 billion kWh in 2024 to 4.193 billion kWh in 2025, with similar growth ahead.

Finally, weather change. Once extreme heat events become more frequent, cooling demand in places like Texas and Arizona will increase sharply and peak demand will rise to new records.

Price Baseload Electricity supply year 2026 (eur/MWh) – week cloud candle, log scale

China-Russia pipeline could replace one-third of LNG imports

“Shock to global offshore gas trade.”

The planned Power of Siberia 2 pipeline between Russia and China could dramatically change the global LNG market. With a capacity of 50 billion cubic meters per year, the pipeline could replace up to a third of China’s current LNG imports. This strengthens the energy ties between the two countries, reduces China’s dependence on LNG from the U.S. and elsewhere, and provides Russia with a crucial alternative market to sell to after Europe’s demise.

The direct pipeline is cheaper and less prone to geopolitical risks for China than LNG imports by sea. Analysts expect the pipeline to weaken the competitive position of U.S., Qatari and Australian LNG exporters and strain growth prospects for new LNG projects.

Although Russia and China have signed a binding memorandum, important commercial details such as price and route have not yet been finalized. China also continues to import LNG from sanctioned Russian projects, calling into question the effectiveness of Western sanctions.

Once the pipeline is operational, China will have long-term access to Russian gas at fixed prices. This will structurally affect the global gas trade. Traders told Bloomberg that such rebalancing will impact long-term contract negotiations and reshape LNG investment decisions well into the 2030s.

Price TTF gas supply year 2026 (eur/MWh) – day cloud candle, log scale

The supply gap: retirement faster than replacement

“Demand is increasing, supply is lagging, and current resources may not be sufficient to bridge this gap.”
– U.S. grid operators

Electricity demand in the United States is growing rapidly, while reliable generation capacity is being phased out at an accelerated rate. By 2025, 12.3 gigawatts (GW) of capacity is expected to be decommissioned, up 65% from 2024. This mainly involves coal plants (8.1 GW) and natural gas plants (2.6 GW), which provide continuous power and cannot be easily replaced by variable sources such as wind and solar.

Although wind and solar capacity continues to increase, this growth is not going fast enough to compensate for the loss of stable generation. According to the Department of Energy (DOE), only 22 GW of stable capacity will be added by 2030, while 104 GW is needed to meet peak demand. Problems such as permit delays, transmission grid bottlenecks and slow rollout of large-scale storage exacerbate the situation.

Grid operators have been warning about these developments for some time. In 2024, transmission projects were delayed from 5 to 7 years due to permit processes, network congestion and supply problems. The waiting time for large transformers reached more than 30 months in 2025, with peaks of up to 4 years. This jeopardizes grid reliability and expansion.

Meanwhile, subsidies continue to focus primarily on variable renewable energy, while investment in stable capacity lags. The Inflation Reduction Act has accelerated clean energy deployment, but without sufficient investment in balancing technologies, reliability risks increase. The DOE has therefore delayed the closure of some plants and issued additional reliability guidelines, but this provides only temporary relief.

To strengthen the network, the DOE is committed to a 16% expansion of long-distance transmission, with 12,000 kilometers of new lines. Yet permitting processes and local resistance remain major obstacles. In addition, pilots have started for smart charging stations, flexible buildings and distributed energy integration, but large-scale rollout requires close cooperation with utilities and regulators.

Demand for energy storage and microgrids is growing, with companies such as Fluence, Stem Inc. and Tesla Energy capitalizing on this trend. New software-driven load management solutions can further develop the market.

With the phasing out of coal and limited growth in renewables, electricity from nuclear and natural gas continues to maintain a “reliability premium.” Deloitte estimates that the U.S. energy sector will need $1.4 trillion in new capital between 2025 and 2030, with similar levels of investment through 2050. Companies that can provide stable capacity or grid services will benefit.

While the U.S. power grid is not at risk of collapse, it is more vulnerable than ever due to strong demand growth, baseload capacity phasing out, extreme weather and slow policymaking. Whether this situation turns into a crisis or a correction depends on the adaptability of policymakers, utilities and investors. The solutions needed are known, but rapid coordination and realistic initiatives are essential to ensure energy security.

Price ICE Coal delivery year 2026 (usd/t) – week cloud candle, log scale

It makes sense to produce hydrogen with nuclear, not renewable

“The hydrogen could then be captured, stored, transported and eventually burned for energy on demand.”
– Ross Pomeroy, editor-in-chief RealClearEnergy,

Hydrogen is often seen as an essential building block for a fully renewable economy. To accommodate the variability of solar and wind power and help industry transition away from fossil fuels, it is proposed that excess, low-cost renewable electricity be used for electrolysis. This involves splitting water into hydrogen and oxygen. The hydrogen produced can then be stored, transported and used as an energy source on demand.

The question, however, is whether this scenario actually offers the most cost-effective and environmentally friendly solution. In fact, it may be more efficient to produce hydrogen with another carbon-free source, such as nuclear power.

Researchers at the University of Pisa compared different methods of hydrogen production using advanced
nuclear reactors
(Gen IV). They concluded that nuclear energy, because of its continuous baseload production, can provide hydrogen at a lower cost and with less carbon emissions than renewable energy, which depends on variable weather conditions.

Two methods stand out:

• Electrolysis with nuclear power: By connecting an electrolyser directly to a nuclear power plant, hydrogen can be produced for about $2.71 per kilogram, with very low emissions.
• High-temperature steam electrolysis: New reactors allow hydrogen to be made via steam, which is slightly more expensive ($3.57 per kilogram), but still much cleaner than conventional methods.

By comparison, hydrogen from natural gas (methane reforming) costs about $4.39 per kilo in Europe and produces much more CO₂ emissions. Hydrogen from renewable sources is even more expensive ($7.71 per kilo).

The researchers emphasize that nuclear power’s reliability and scalability make it an attractive alternative for large-scale, clean hydrogen production. However, the findings are preliminary because few of these advanced reactors are yet operational worldwide.

Price Emission Rights – Dec-25 contract EEX (eur/t) -day cloud candle, log scale

China’s commercialization of the holy grail: fusion energy

“In a world increasingly concerned about how to deal with rapidly growing energy needs and geopolitical tensions arising from access to energy and energy resources, fusion energy gives us hope.”
– Stephanie Diem, assistant professor of nuclear engineering University of Wisconsin

China is working to commercialize advanced fusion technology by 2030, which would make it the first country to succeed. According to physicists at the Massachusetts Institute of Technology (MIT), the ability to generate electricity in this way could enable the Chinese Communist Party (CCP) to change global geopolitical relations and dominate a new energy era.

Randy Weber, chairman of the Energy Subcommittee of the House Science, Space & Technology Committee, emphasized during a
speech
on Sept. 18 that fusion energy should be developed and deployed by countries that uphold democratic values, transparency and international cooperation. He warned that authoritarian regimes can use energy dominance as a means of power. Weber called for accelerating the development of fusion energy in America, lest the country be overtaken by the CCP’s ambitious timelines. According to him, China could otherwise dominate “the most important breakthrough of this century.”

At a hearing, four fusion experts indicated that it is not inevitable that China will win this technological race. They recommended that the U.S. government increase funding for fusion research, collaborate with international partners and establish demonstration projects similar to previous successful technological breakthroughs.

Unlike nuclear fission (“fission”), nuclear fusion mimics the process that occurs in stars, where atoms fuse together. Fusion is seen as a potential source of virtually unlimited, clean energy, It is often called the “holy grail of energy solutions.” It has been the subject of worldwide research since the 1950s, with a major breakthrough in 2022: the Lawrence Livermore National Laboratory succeeded in generating more energy than was consumed with a fusion experiment. Since then, technological progress has been rapid.