THIS WEEK AT A GLANCE
The U.S.-Iran war has produced the most severe disruption to global energy markets since the 1973 Arab oil embargo. The effective closure of the Strait of Hormuz — through which 20% of the world’s oil and LNG normally transits — sent Brent crude above $100 per barrel for consecutive sessions. On March 11, DOE authorized the release of 172 million barrels from the Strategic Petroleum Reserve as part of a coordinated 400-million-barrel drawdown by 32 IEA member nations — the largest emergency release in the organization’s 50-year history.
On the funding front, DOE launched the SPARK initiative — a $1.9 billion competitive grant program for critical grid modernization — with concept papers due April 2. Puerto Rico should be positioning to apply. The White House also secured the Ratepayer Protection Pledge, under which seven major AI and tech companies agreed to cover the full cost of data center power needs rather than passing those costs to consumers. Looking ahead, the Energy Subcommittee holds a March 17 hearing on lessons from Winter Storm Fern, centering on the reliability of dispatchable baseload generation during peak demand events.
Iran War Closes Strait of Hormuz — DOE Activates Strategic Petroleum Reserve
Date: March 11, 2026
The armed conflict between the United States, Israel, and Iran — which began on February 28, 2026 — has produced the most severe disruption to global energy markets since the Arab oil embargo of 1973. The effective closure of the Strait of Hormuz, through which approximately 20% of the world’s oil and 20% of globally traded LNG normally passes, has sent prices surging and tested the emergency response mechanisms of consuming nations worldwide.
On March 11, Energy Secretary Chris Wright announced that President Trump authorized the release of 172 million barrels from the Strategic Petroleum Reserve (SPR) — the single largest U.S. contribution in the 50-year history of the International Energy Agency (IEA). The release is part of a coordinated action across all 32 IEA member countries, which collectively agreed to release 400 million barrels — the largest emergency stockpile deployment in the organization’s history. Delivery will take approximately 120 days. Secretary Wright stated that the U.S. plans to replenish the reserve with 200 million barrels within the next year at no cost to the taxpayer.
The Strait’s closure is not the result of a conventional naval blockade. The withdrawal of maritime insurers from the corridor — with war-risk premiums reaching six-year highs — has made transit economically unviable for commercial operators. As of March 14, tanker traffic has dropped to near zero and Brent crude has topped $100 per barrel for two consecutive sessions. Iran has threatened prices could reach $200 per barrel if the conflict continues. Separately, Defense Secretary Pete Hegseth acknowledged that U.S. military forces are not yet positioned to escort oil tankers through the Strait, underscoring the limits of near-term supply normalization.
Critically, this is not only an oil story. Approximately 25% of global LNG exports transit the Strait, primarily from Qatar, the world’s largest LNG exporter. QatarEnergy halted LNG production following attacks on its Ras Laffan and Mesaieed facilities. European natural gas prices jumped approximately 30% in the days following the strikes; Asian LNG spot prices reached three-year highs.
Why This Matters for Puerto Rico:
The energy price shock triggered by the Iran conflict has not hit all fuels equally. Since hostilities began on February 28, Brent crude has risen approximately 40%, briefly surpassing $119 per barrel before settling near $100–103. U.S. gasoline prices are up roughly 17–18%, averaging $3.54 per gallon nationally. Diesel has risen approximately 25%. European natural gas (TTF) has spiked 30–50%. Asian LNG spot prices have reached three-year highs.
U.S. Henry Hub natural gas, by contrast, has risen only approximately 7% — remaining in the $3.34–3.40/MMBtu range. The reason is structural: U.S. LNG export terminals are already operating near full capacity, which limits the ability of global demand to pull additional volumes out of the domestic market. American gas production continues to rise, keeping domestic supply abundant even as the rest of the world scrambles for alternatives.
This directly benefits Puerto Rico. New Fortress Energy (NFE), the island’s primary LNG supplier, sources its gas from U.S. Gulf Coast terminals — supply chains with zero exposure to the Strait of Hormuz. While Europe and Asia face supply disruptions and price spikes of 30–50%, Puerto Rico’s generation fuel costs are tracking far closer to the stable U.S. domestic benchmark. The island’s reliance on U.S.-sourced LNG — often discussed as a vulnerability — is proving to be a structural resilience advantage precisely when Middle Eastern supply is most at risk.
AGENCY WATCH: DOE
DOE Launches SPARK: $1.9 Billion for Critical Grid Infrastructure
Date: March 12, 2026
DOE’s Office of Electricity announced the Speed to Power through Accelerated Reconductoring and other Key Advanced Transmission Technology Upgrades (SPARK) Notice of Funding Opportunity — approximately $1.9 billion drawn from the Infrastructure Investment and Jobs Act (IIJA). SPARK is the third round of funding under the Grid Resilience and Innovation Partnerships (GRIP) Program, which has previously provided up to $10.5 billion across five years to states, tribes, electric utilities, and other eligible entities.
SPARK focuses on the rapid deployment of reconductoring — replacing existing transmission lines with higher-capacity conductors — paired with Advanced Transmission Technologies (ATTs). Selected projects must demonstrate measurable gains in grid capacity, reliability, and cost reduction for consumers. Key deadlines:
Puerto Rico Connection: SPARK is a direct opportunity for Puerto Rico. The island’s transmission and distribution infrastructure — devastated by Hurricanes Irma and Maria in 2017 and still undergoing modernization — is precisely what SPARK is designed to address. Puerto Rico has a demonstrated track record of eligibility under prior GRIP rounds and DOE grid programs, including the $1 billion Puerto Rico Energy Resilience Fund (PR-ERF).
With the recent cancellation of federal renewable energy projects on the island, SPARK represents a critical near-term vehicle for securing federal infrastructure investment. LUMA Energy, PREPA, and relevant government entities should begin concept paper development immediately — the April 2 deadline is less than three weeks away. Applicants must also ensure active registrations on eXCHANGE, SAM.gov, and Grants.gov before submitting.
White House Secures Ratepayer Protection Pledge from Major AI and Tech Firms
Date: March 4, 2026
Amazon, Google, Meta, Microsoft, OpenAI, Oracle, and xAI signed the “Ratepayer Protection Pledge” at the White House — a commitment first announced by President Trump in his February 24 State of the Union address. Under the pledge, these companies agree to build, bring, or buy all new generation resources and power delivery infrastructure required for their AI data centers, ensuring those costs are not passed to residential electricity consumers.
The backdrop: U.S. data center construction starts hit a record $25.2 billion in January 2026. In the PJM Interconnection region — the nation’s largest grid operator — capacity prices surged from $28.92 per megawatt-day in 2024–2025 to $329.17 in 2026–2027, with consumer utility bills in parts of the region rising between 5% and 44% as a result. The pledge is voluntary and non-binding.
Why This Matters: This pledge establishes an important policy precedent: AI infrastructure should finance its own energy footprint rather than socializing those costs across the rate base. For Puerto Rico, the model is instructive for structuring future large-load interconnection agreements with industrial users — including pharmaceutical manufacturers and potential technology investors — in ways that protect the island’s already-strained rate base.
OTHER DEVELOPMENTS
U.S. Temporarily Permits Russian Oil Purchases Amid Iran Price Shock
In response to the global supply disruption triggered by the Iran conflict, the U.S. Treasury issued a temporary general license through April 11, 2026 permitting third countries to purchase Russian oil — a short-term measure to counteract the price spike caused by Hormuz disruptions. The move follows Energy Secretary Hegseth’s admission that U.S. military forces are not yet positioned to escort oil tankers through the Strait of Hormuz, underscoring the limited near-term options available to restore supply flows.
LOOKING AHEAD
Energy Subcommittee Hearing: Winter Storm Fern Lessons — March 17, 2026
Date: Tuesday, March 17, 2026 | Rayburn 2123, 10:00 AM ET
The Subcommittee on Energy will hold a hearing titled “Winter Storm Fern Lessons: Supplying Reliable Power to Meet Peak Demand.” Chairmen Guthrie and Latta stated: “As Winter Storm Fern swept across the country and energy needs were at their highest, it was baseload, dispatchable power sources like coal, nuclear power, and natural gas that kept the lights on for millions of American families.”
DOE data from the January 25 storm peak supports the framing: hydrocarbons provided 71% of generation across the most severely affected regions; combined with nuclear, the figure reached 86%. Solar contributed 2%; wind contributed 8%. In ISO-New England, oil-fired generation rose from near zero to approximately 35% of total output at peak demand.
Puerto Rico Connection: This hearing is directly relevant to Puerto Rico’s resource adequacy debate. The Committee’s framing — that grid reliability during extreme demand events depends on dispatchable, firm-capacity generation — reinforces the case for a Puerto Rico generation mix that includes reliable baseload resources, not exclusively intermittent supply. Testimony and conclusions from this hearing will carry weight in federal policy discussions and may inform future DOE emergency order criteria for the island.
On Our Radar:
NEED MORE DETAIL?
For questions about any item in this briefing, or to schedule a consultation, contact:
Anthony O. Maceira, Managing Member
amaceira@mzls.com
© 2026 Maceira Zayas Law & Strategy. All rights reserved. This briefing is provided for informational purposes only and does not constitute legal advice.
