US Energy Update tracks the stories that matter most each week: what’s being built, what’s being fought over, what’s moving prices, and what it means for the economy and the people paying the bills.
The US energy sector is in the middle of a structural transformation. Record electricity demand from AI and data centers, a construction boom in gas, nuclear, solar, and storage, active geopolitical disruption to global fuel markets, and a federal policy environment that’s reshaping investment incentives in real time.
Iran and Oman Reach a Framework on Hormuz Shipping Routes — But the Strait Is Still Not Open
The most closely watched diplomatic development in global energy markets cleared a meaningful threshold this week. Iran and Oman announced on Wednesday that they had agreed on the geographic coordinates of new commercial shipping routes through the Strait of Hormuz, with a joint statement in final drafting as of Thursday. Under the proposed arrangement, the temporary routes established near Iran’s Larak Island and through Omani territorial waters would give way to a new single corridor that routes inbound traffic through Iranian waters and outbound through Omani waters — a departure from the decades-old system under which commercial traffic moved primarily through Omani-controlled lanes. The proposed routes would operate for two to four months initially, with a possible extension. Critically, Iran’s Foreign Ministry made clear that the agreement with Oman does not by itself reopen the strait: Tehran has conditioned full commercial restoration on the US lifting its naval blockade of Iranian ports and halting infrastructure strikes. The US, for its part, told reporters that any temporary route arrangement must be toll-free and require no vessel approvals. Negotiations covered technical arrangements, the security and sovereignty of both Iran and Oman, and a proposed joint coordination center to manage maritime traffic. Brent crude, which touched $138 per barrel in April, has fallen to roughly $73 to $81 per barrel in recent sessions as markets front-run the best-case scenario for Hormuz normalization — though analysts at Vanda Insights have cautioned that logistics hurdles and renewed geopolitical flare-ups are not yet priced in. For American consumers, Brent at these levels still represents a price roughly equal to where it was the day before the war began on February 28 — no cushion, but no new shock either.
ERCOT Set New All-Time Demand Records Two Days in a Row Last Month — and the Grid Held
Texas power grid operator ERCOT broke its all-time peak demand record on consecutive days during the late July heat wave, first hitting 87,403 MW on July 22 — shattering the prior record of 85,508 MW set in August 2023 — then climbing to 91,308 MW on July 23 as triple-digit temperatures pushed cooling demand to historic levels across Houston, Dallas, and San Antonio. Notably, ERCOT issued no conservation appeals during either day. Maximum battery storage discharging hit a new record of 11,980 MW, maximum solar production set a record at 34,665 MW, and maximum net load peaked at 75,733 MW — all during the same heat event. The grid’s ability to absorb a demand surge of this magnitude without incident reflects how dramatically the Texas generation mix has shifted: roughly 11 GW of new capacity came online in the months before summer, and the combination of solar, wind, and battery storage has altered both the shape and the resilience of peak-hour power flows. ERCOT had forecast a potential summer peak above 92.2 GW driven by population growth and data center load additions; the grid did not reach that ceiling, but came within 900 MW of it. August historically runs hotter than July in Texas, so the season is not over. The story worth watching is the post-sunset window: as solar fades around 9 p.m. and cooling demand and data-center load remain elevated, battery reserves are the primary buffer — and at 11,980 MW of peak discharge, they are being deployed at a scale unimaginable three years ago.
PJM’s Latest Capacity Auction Hit the Price Cap for the Third Straight Year — and the Shortfall Got Bigger
PJM Interconnection released results of its 2028/2029 Base Residual Auction on July 14, and the structural picture it revealed is deteriorating, not improving. Capacity prices cleared at the $325/MW-day cap — the FERC-approved ceiling established in coordination with governors across all 13 PJM states — down just 2.5% from the prior auction’s $333.44/MW-day, and PJM secured 138,318 MW of unforced capacity, leaving a shortfall of 6,831 MW below its reliability requirement. That shortfall is larger than the 6,500 MW gap from the previous auction, which was itself the first shortfall in PJM history. PJM’s own simulation without the cap shows the auction would have cleared at $555/MW-day — 71% above the applied ceiling — compared to 18% above the cap two auctions ago. The uncapped cost would have been roughly $29.7 billion, against the $16.4 billion buyers will actually pay. Only 525 MW of new generation cleared, down from 774 MW in the prior cycle. The supply mix is 46% natural gas, 20% nuclear, 18% coal, 5% demand response, 4% hydro, 2% wind, and 1% solar. PJM’s CEO David Mills said plainly that demand is growing faster than supply, driven largely by data centers — forecast peak load for 2028/2029 came in roughly 2,000 MW higher than the prior cycle’s estimate. One more auction remains under the current collar framework, scheduled for December 2026. After that, PJM’s standard formula applies — and its own February 2026 filing estimated the uncapped reference price at approximately $550/MW-day. PJM’s board is simultaneously preparing a Reliability Backstop Procurement filing with FERC targeting 14.9 GW of new capacity through a combination of bilateral contracts and a pay-as-bid auction.
US Commercial Crude Inventories Built by 2.5 Million Barrels Last Week as Hormuz Flows Begin to Recover
The EIA’s weekly petroleum status report for the week ended July 31 showed US commercial crude oil inventories increasing by 2.5 million barrels, with refineries running at 96.5% of operable capacity — a high utilization rate that reflects the sustained demand for US refinery products from international buyers who have been scrambling for alternatives to stranded Gulf crude since February. US crude oil imports averaged 6.2 million barrels per day last week, up 515,000 barrels per day from the prior week. Over the past four weeks, crude imports averaged approximately 5.8 million barrels per day, running 4.4% below the same period last year. The inventory build is a signal that physical crude flows are beginning to normalize as some shut-in Middle East production edges back online following the June MOU between the US and Iran. The EIA’s July STEO projected that most crude oil production will return to near pre-conflict averages by year-end and that the majority of shut-in production will be back online by the first quarter of 2027. The pace of that recovery — and whether the Iran-Oman Hormuz shipping framework announced this week accelerates or complicates it — will be the dominant variable in crude oil pricing through the end of the year.
US Natural Gas Production Hit a July Record of 110.7 Bcf/d — and Prices Are Falling Back Below $2.70
Domestic natural gas production in the Lower 48 states averaged a record 110.7 billion cubic feet per day in July, and the market is responding the way it usually does to a supply surplus: prices are falling. Henry Hub futures declined below $2.70 per MMBtu this week, reaching their lowest level in more than three months, weighed down by above-normal storage builds, moderating temperature forecasts, and easing LNG feedgas demand. The EIA reported a 33 Bcf injection for the week ended July 31 — above the five-year average of 23 Bcf — and analysts expect storage to stand roughly 6.6% above seasonal norms for that week. LNG feedgas flows to the nine major export plants averaged 16.9 Bcf/d so far in August, down from 17.2 Bcf/d in July, partly due to reduced operations at Freeport LNG and a single operating liquefaction train at Golden Pass. The underlying structural tension in the US gas market remains intact: record domestic production is colliding with a growing LNG export base that is increasingly setting the floor beneath domestic prices. When all three Golden Pass trains are operational, and Rio Grande LNG reaches full ramp through 2027, US producers will have less ability to let a soft domestic market drag prices down, because international buyers will keep pulling volumes toward export terminals. For now, though, the dynamics are familiar — a mild end-of-summer weather pattern, strong production, and maintenance-related softness in feedgas demand are conspiring to push Henry Hub toward levels that historically trigger producer curtailments.
Westinghouse and Amentum Are Teaming Up to Advance the AP300 SMR Through NRC Licensing
Westinghouse Electric Company and engineering services firm Amentum announced a series of agreements on August 4 that formalize a joint push to obtain NRC licensing for the AP300 small modular reactor — marking one of the most commercially significant SMR regulatory commitments of the year. Unlike many SMR developers pursuing entirely new reactor designs, Westinghouse has based the AP300 on the same core technology used in its AP1000 reactor. The shared platform — called the APX technology platform — extends across engineering, major components, fuel design, licensing strategies, and parts of the supply chain. There are currently six AP1000 reactors in commercial operation worldwide, four in China and two at the Vogtle station in Georgia, giving Westinghouse actual operating experience to draw on as it files regulatory documentation for the smaller version. Amentum brings nuclear project execution capability spanning the full project lifecycle across multiple countries. The agreements also cover enhancing engineering and execution capabilities for delivering AP1000 reactors at fleet scale, with the DOE this summer making $17.5 billion in supply chain financing available for companies procuring equipment to build ten new AP1000 units and begin construction by 2030. The Westinghouse/Amentum alignment signals something important about where the market is heading: rather than competing on the most novel reactor design, some developers are betting that a proven technology platform with an existing licensed lineage is the fastest path to commercial deployment — especially now that the NRC’s new Part 53 framework gives developers genuine optionality on licensing pathways.
Holtec, Entergy, and Hyundai Engineering Are Evaluating SMR-300 Deployments Across the Gulf South
On August 4, Holtec International, Entergy Services, and Hyundai Engineering and Construction announced a memorandum of agreement to evaluate potential deployments of Holtec’s SMR-300 reactor across Entergy’s four-state Gulf South service territory — covering Arkansas, Louisiana, Mississippi, and Texas. The collaboration will jointly evaluate customer demand, candidate sites, and commercial structures for potential dual-unit SMR-300 projects. Holtec’s SMR-300 is a Generation III+ pressurized water reactor producing approximately 340 MW net per unit, with a standard dual-unit configuration delivering roughly 680 MW of firm, carbon-free electricity using proven pressurized water reactor technology, standard nuclear fuel, and fully passive safety systems. Holtec would lead on reactor technology, nuclear systems, and manufacturing; Hyundai would lead on balance-of-plant engineering, procurement, and construction — the same division of labor the two companies are using at the Palisades site in Michigan. The partnership with Entergy is notable because Entergy has simultaneously filed for 2,000 to 6,000 MW of new dispatchable capacity to serve a data center pipeline that includes the 5 GW Meta campus in Richland Parish, Louisiana. Nuclear delivers something that combined-cycle gas and solar-plus-storage have difficulty replicating at industrial scale: firm, around-the-clock baseload with zero fuel price exposure. The MOA is non-binding and a long way from an NRC filing, but it positions Holtec’s Gulf South pipeline alongside a utility that has more large-load customer commitments than any other in the country..
We Energies Breaks Ground on Three Wisconsin Projects Totaling Solar, Wind, and Battery Storage Capacity for 100,000 Homes
We Energies announced on August 4 that construction is underway on three Wisconsin energy projects that together will produce enough electricity to serve approximately 100,000 homes. The projects include the Darien Battery Storage Park, an expansion of a site where a 250 MW solar project went online in 2025; the Badger Hollow Wind Energy Center, a 110 MW wind project in Iowa and Grant counties that broke ground in July; and a third project rounding out the portfolio. All three were previously approved by the Public Service Commission of Wisconsin. Construction will support more than 450 jobs. We Energies President Mike Hooper described the projects as part of an all-of-the-above strategy that pairs renewables with new natural gas plants — an approach that reflects the practical reality facing Midwestern utilities that need both flexibility and clean capacity as load growth accelerates. The utility now has more than 3,000 MW of solar and wind energy and 600 MW of battery storage in service, under construction, or pending regulatory approval. Wisconsin is within MISO’s footprint, which this year projected its peak demand growing 35% by 2035 driven largely by data centers — a forecast that is beginning to show up directly in utility capital plans across the region.