Daily on Energy: House pivots to Iran legislation, including a measure on oil sales

HOUSE MOVES ON IRAN LEGISLATION: Following Iran’s first direct attack on Israel over the weekend, House Republicans have expedited consideration of legislation retaliating against Iran – and that includes a bill that would aim to counter China’s purchases of Iranian crude oil. 

The bill at hand: Introduced by Rep. Mike Lawler, the Iran-China Energy Sanctions Act of 2023 would expand secondary sanctions to Iran to cover all transactions between Chinese financial institutions and sanctioned Iranian banks that work together to purchase petroleum products. The measure would also require an annual evaluation as to whether Chinese financial institutions have engaged in “sanctionable conduct.” 

Some background: According to a summary of the bill, 80% of Iran’s crude oil exports are sent to China through smaller independent refineries known as “teapots.” China’s larger, state-owned refineries have refrained from engaging in the trade due to sanctions risk. The bill aims to counter these transactions by clarifying that any transaction by a Chinese financial institution to purchase oil from Iran qualifies as a “significant financial transaction,” and are therefore subject to sanction efforts.

The bill, which was passed by the House Financial Services Committee unanimously in November, is one of several Iran-related bills to be considered this week following the country’s first-ever direct military attack on Israel. More than 300 drones and missiles were fired at the Jewish state, escalating an already violent conflict in the Middle East. 

“Iran has spent decades bankrolling Hamas, Hezbollah, the Houthis, and other terrorist groups across the region. We must cut off the source of their funding – Iran’s illicit oil trade, which has brought in over $88 billion since President Biden took office,” Lawler said in a written statement to the Washington Examiner. “Holding Iran and its enablers like China, the biggest purchaser of Iranian petroleum in the world, accountable is critical in the wake of Iran’s heinous attack on Israel.” 

Chances in the Senate: The prospects of the Democratic-controlled Senate taking up the Republican-led bill is low – but pressure to retaliate against Iran following the attack remains high. We’ll follow up if we hear of any changes. 

What got bumped off the schedule: The House was set to consider a slew of energy-related legislation taking aim at the Biden administration’s energy efficiency standards for home appliances. The bills would overturn energy standard rules for air conditioner units, refrigerators, dishwashers, and laundry machines, and more.

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment writers Breanne Deppisch (@breanne_dep) and Nancy Vu (@NancyVu99). Email bdeppisch@washingtonexaminer dot com or nancy.vu@washingtonexaminer dot com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list. 

OIL INVESTORS SHRUG OFF BROADER FEARS OF MIDDLE EAST CONFLICT: Oil prices slipped slightly in the early hours of trading this morning, as investors brushed off fears of a broader Middle East conflict following Iran’s strike on Israel. 

Futures for international benchmark Brent crude fell below $90 per barrel this morning, while U.S.-based West Texas Intermediate dropped about 67 cents to below $85.

Oil prices had soared Friday to their highest point in six months in anticipation of Iran’s retaliatory attack. But analysts said their fears of a broader conflict are eased—at least for now—after Iranian leaders said they consider their retaliation to be over. 

The fact that Iran’s drone and missile attack was largely telegraphed beforehand also helped ease fears of a broader or more protracted geopolitical conflict, Kpler oil analyst Viktor Katona told Reuters.

PVM’s John Evans also agreed, telling the outlet the strike was  “about as telegraphed a world event that people can remember.” Read more on that here.

TESLA TO LAY OFF MORE THAN 10% OF GLOBAL WORKFORCE: Tesla said today it will lay off more than 10% of its global workforce, a major reduction that comes as it looks to compete with lower-priced EVs from competitors and lower-than-expected consumer demand.

The decision was announced in a company-wide email from Tesla CEO Elon Musk, who said the layoffs will enable the automaker to “be lean, innovative and hungry for the next growth phase cycle.”

Tesla’s workforce currently stands at slightly above 140,000 people.

Tesla reported a quarterly drop in sales for the first time in nearly four years. Read more on that here.

SAMSUNG GETS $6.4 BILLION TO BUILD NEW CHIP FACTORIES IN TEXAS: The government announced $6.4 billion in funding to South Korean tech titan Samsung to build advanced computer chip manufacturing facilities in the Austin area. 

The Washington Post reports Samsung will invest $40 million of its own money in the effort as well— which will involve both upgrading a facility currently under construction in Taylor to include a research and development center, and building out a so-called “advanced packaging facility,” which builds different chips and electronics components used in planes,  cars, phones, and other devices.

The news comes just days after the Biden administration announced a $6.6 billion subsidy for the Taiwan Semiconductor Manufacturing Co. to expand operations in Arizona.

Both multi-billion dollar investments are part of the 2022 CHIPS Act, which gives the U.S. $39 billion in subsidies designed to encourage more domestic chip manufacturing and production. Read more on that here.

KEY BRIDGE COLLAPSE INVESTIGATION: The FBI has opened an investigation into the cargo ship that struck and took down the Francis Scott Key Bridge in Baltimore last month.

As our Annabella Rosciglione reports, the probe will look into whether the crew members onboard knew there were problems with the ship when they left the port. 

Authorities are reviewing the circumstances leading up to the “complete blackout” of the Dali— the 984-foot Singapore-flagged container ship that lost power while leaving the Port of Baltimore—just seconds before the collision with the bridge.

The ship was managed by Synergy Marine Group.

The criminal investigation being executed by the FBI is different from the investigation by the National Transportation Safety Board into the cause of the crash. It comes after the Singaporean company filed a preemptive filing in the U.S. district court in Baltimore earlier this month to limit liability in the crash, asking the court to “issue an order enjoining the commencement of or further prosecution of any claims or causes of action against Petitioners except in this action” and that the court “determine that Petitioners are not liable for any loss or damage arising out of the Casualty.” Read more on that here.

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