Daily on Energy: OPEC hikes production and a 4th reactor hits criticality
WHAT’S HAPPENING TODAY: Good afternoon and happy Monday, readers! We hope you had a fun and exciting 4th of July weekend and are ready to get right back in the swing of things. USA celebrations aren’t quite done yet, as the men’s national team takes on Belgium in the latest knockout round of the World Cup tonight. 🇺🇲⚽🇧🇪 Go team USA!
Today’s edition of Daily on Energy dives right into the news from OPEC, which decided this weekend to increase production again next month. 🚢🛢️ What does that mean for oil prices? We have that below as well.
Plus, Democratic Gov. Abigail Spanberger came out in support of building data centers in a podcast released earlier today. 🤖⚡🏭 This may not be a surprise, given Virginia is widely considered the data center capital of the world, but it does break with much of the Democratic Party. Keep reading for more.
OPEC AGREES TO PRODUCTION HIKE AS STRAIT TRAFFIC RECOVERS: Seven OPEC+ nations have agreed to increase their oil production levels next month, in an apparent effort to prop up the markets as oil prices fall and global crude supply levels attempt to recover during the latest ceasefire between the United States and Iran.
The countries – which included Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman – agreed yesterday to increase output by 188,000 barrels per day. This is adding on to other production hikes announced since April, bringing the total number of increases to nearly 800,000 barrels per day.
However, it’s important to note that adjusted output quotas have largely yet to be seen in the markets, as the Strait of Hormuz remained effectively closed until mid-June. In fact, OPEC+ total production fell by nearly 10 million barrels per day in May.
The memorandum of understanding signed by the U.S. and Iran last month has allowed for traffic to resume in the strait – though we still have yet to see pre-war levels of traffic.
Over the weekend, Windward estimated that there were 78 transits (46 in and 32 out) on Saturday and Sunday. The maritime intelligence platform also estimated there to be 12 dark vessel transits. MarineTraffic also estimated that there were another 38 confirmed crossings through the strait last Thursday.
PLUS – WHERE PRICES STAND: Prices did not dramatically change over OPEC+’s decision, with prices hovering around the $70 a barrel mark.
Just before 3 p.m. EDT, international benchmark Brent crude was down 0.12% and selling at $72.03 a barrel. West Texas Intermediate also fell 0.16% and was priced at $68.58 a barrel.
U.S. OIL RESERVES FALL FURTHER: Data released on Monday by the Department of Energy show that the Strategic Petroleum Reserve fell by around 6.2 million barrels to 319.5 million barrels. The latest time the stockpiles were this low was April 1983, when it was initially being filled and was recorded at 313.5 million barrels.
Last week’s drawdown is a part of the Trump administration’s broader effort to sell around 172 million barrels in order to keep gasoline prices down in the fallout of the oil supply crisis caused by the Iran war. This total draw could send the SPR to its lowest level ever, hitting as low as 243 million barrels.
The inventories have a total capacity of around 714 million barrels and require 20% of that full capacity to remain operational.
BERLIN POWER OUTAGE WAS A TERRORIST ATTACK: An expert commission has concluded that the January arson that caused power outages in Berlin was in fact an act of terror, Bloomberg reports.
The background: In January, a fire at a cable bridge near a power plant in Berlin caused power outages that affected around 45,000 people. The left-wing Volcano Group initially claimed responsibility, saying that it was targeting the fossil fuel industry. But, it later gave conflicting signals about whether it carried out an attack.
The latest: In the new report, the commission wrote that the “terrorist attack on the power grid in January 2026 was a wake-up call for Berlin and other cities.”
But it did not assign a motivation for the attack.
SPANBERGER STANDS UP FOR DATA CENTERS: Gov. Abigail Spanberger defended the construction of data centers, putting herself at odds with left-wing Democrats who have called for a moratorium.
The key quote: “There’s a national security implication, and we as a nation don’t want to cede that ground,” Spanberger said in a podcast interview with Daily on Energy alum Josh Siegel. “Walking away from a technology that is going to continue to proliferate is walking away from the table.”
The background: Spanberger recently signed a budget that creates a tax on the electricity consumed by data centers. The tax is expected to raise up to $600 million annually. Revenue collected above that cap will be refunded to data center operators at the end of each fiscal year.
But data centers still save on taxes with existing incentives. Spanberger defended those measures, arguing that data center construction benefits local governments via added tax revenues.
FOUR REACTORS BY THE FOURTH: In the early hours of July 4th, a fourth advanced nuclear reactor achieved criticality – exceeding Trump’s goal of having three new designs hitting the milestone by Independence Day.
The Department of Energy confirmed this morning that Aalo Atomics’ test reactor, Aalo-X, completed a zero-power field criticality demonstration just after midnight on Saturday. This reactor is intended to help power facilities such as data centers running energy-intensive artificial intelligence operations. Aalo Atomics hopes to be operational for commercial use by 2029.
It marks the third reactor being developed under the administration’s Reactor Pilot Program to hit criticality, and fourth advanced reactor overall. The other companies that have achieved this milestone are Valar Atomics, Antares, and Deployable Energy.
“The hardest problem in nuclear was never the physics, our country simply forgot how to build,” Aalo Atomics president and CTO Yasir Arafat said. “The success of the Department of Energy Reactor Pilot Program is proof America can execute again.”
If you forgot: Reaching criticality means a reactor is perfectly stable and its nuclear chain reaction is self-sustaining. This means the atoms splitting in the core of the nuclear reactor are able to produce enough neutrons to continue sustaining additional reactions that produce energy.
ICYMI – PALISADES NUCLEAR PLANT RESTART REACHES ‘WATERSHED MOMENT’: We’re getting one step closer to seeing the first decommissioned nuclear power plant in the United States turn back on.
Nuclear reactor manufacturer Holtec International revealed late last week that its restart of the Palisades Nuclear Plant in Michigan had reached a “watershed moment.”
The company said the last of the “major projects” were finished, with the site transitioning from large-scale activities to routine maintenance, testing, inspection, and operational readiness work required before officially restarting the plant. As of last Thursday, more than 5,000 individual work activities still had yet to be completed.
Some of the major projects already completed include installing the facility’s turbine generator and installing its fuel handling machine.
Some background: Initially, Holtec had been planning to restart the nuclear power plant by October of last year. That was pushed back multiple times due to repairs and regulatory hurdles.
Last month, however, Energy Secretary Chris Wright teased that the restart would happen as soon as this summer. Holtec did not give any update on timing in its announcement last week.
July 7 – 8 The Federal Energy Regulatory Commission is holding a software technical conference in Washington, D.C.
July 7 Resources for the Future’s Resilient Energy Economies initiative is holding a webinar focused on the public opinion regarding energy transition and economic development in fossil fuel-dependent communities.
July 7 The Center for Strategic and International Studies is holding its 16th annual South China Sea Conference.
July 8 – 9 The Defense Strategies Institute’s DoW Energy and Power Summit is taking place in Washington, D.C.
July 8 The Nuclear Policy Program at the Carnegie Endowment for International Peace is hosting its third Jessica T. Matthews New Voices conference in Washington, D.C., with a focus on nuclear policy.
July 9 Utility trade association WIRES is hosting its summer member meeting in Philadelphia, Pennsylvania, featuring remarks from FERC Commissioner David LaCerte.
July 9 The American Nuclear Society is holding a webinar looking at the future of nuclear energy in Utah.