Geopolitical tensions, energy security concerns, and regulatory developments dominated this week’s market narrative. Oil prices moved higher as renewed US pressure on Iran added a risk premium, while Europe intensified efforts to diversify gas supply away from US LNG. In climate policy, the US formally exited the Paris Agreement for a second time, injecting fresh uncertainty into global climate cooperation. Carbon markets were shaped by mounting political pressure on CBAM and renewed momentum in jurisdictional REDD+ programmes, while renewables and sustainable fuels saw significant policy and investment advances across Australia, Europe, India, and Brazil.

Macro and Others

Oil climbs from four-month high as Trump ramps up Iran threats

Oil extended gains for a third consecutive session as President Trump warned Iran to reach a nuclear agreement or face potential military strikes. Brent rose above $69 per barrel, its highest level since September, as markets priced in heightened geopolitical risk. Traders increasingly sought protection via bullish options, reflecting concerns over possible disruptions to Middle Eastern crude flows, particularly through the Strait of Hormuz.

EU eyes gas from Qatar and Canada to reduce reliance on US LNG

The European Union signaled growing discomfort over its dependence on US liquefied natural gas, which now accounts for over half of its LNG imports. Energy Commissioner Dan Jorgensen said Europe is exploring increased supplies from Qatar, Canada, and North Africa as part of a broader strategy to strengthen energy security and reduce geopolitical exposure.

US hands over seized tanker to Venezuela

The United States confirmed it is returning a seized supertanker to Venezuelan authorities, marking a rare reversal in its enforcement actions against Venezuelan oil shipments. The move may reflect shifting diplomatic and energy market considerations as global crude supply dynamics evolve.

Carbon Markets

Compliance

Fertiliser exemption risks undermining CBAM, EU Parliament warns

Members of the European Parliament warned that temporarily exempting fertilisers from the Carbon Border Adjustment Mechanism could weaken the entire framework and undermine low-carbon investments. Lawmakers stressed that granting exemptions based on short-term economic pressure risks triggering a cascade of sectoral carve-outs, ultimately eroding the credibility of CBAM and the EU’s broader climate policy architecture.

Voluntary

ART TREES accepts documents for third J-REDD+ programme in the Brazilian Amazon

ART formally accepted documentation from the Brazilian state of Acre for its jurisdictional REDD+ programme, advancing certification under the TREES standard. The initiative spans 16 million hectares and could generate over 100 million credits, with more than 70 percent of revenues earmarked for Indigenous and local communities. The programme marks a major step forward in scaling high-integrity jurisdictional carbon markets in the Amazon.

Renewables and Biofuels

Electricity Markets

Australia surpasses 50 percent renewable electricity milestone

Australia achieved a landmark milestone with renewables exceeding 50 percent of electricity generation in the December quarter. Growth in rooftop solar, wind, and grid-scale solar drove the shift, while coal and gas generation fell below half of the national power mix. Grid emissions reached a record quarterly low, reinforcing Australia’s progress toward its 2030 decarbonisation targets.

US Senate Republicans call for permitting certainty on energy projects

Republican lawmakers emphasized the need for regulatory stability, urging that fully approved energy projects should not be halted due to shifting political priorities. The comments reflected bipartisan concern that inconsistent permitting policies could deter infrastructure investment, particularly in renewables and offshore wind.

Gas and Biofuel Markets

Brussels greenlights $3.4 billion Spanish state aid for high-efficiency power

The European Commission approved a €3.1 billion Spanish aid scheme to support combined heat and power plants using gas, biogas, and biomass. Projects must include renewable hydrogen blending capabilities, reinforcing the EU’s long-term decarbonisation strategy while maintaining short-term energy system reliability.

India to launch national SAF roadmap

India announced plans to introduce a national sustainable aviation fuel roadmap aimed at guaranteeing offtake and boosting investor confidence. The policy will prioritise alcohol-to-jet pathways and aims to scale production rapidly, with blending mandates rising to 5 percent by 2030.

Brazil to allow UCO imports for SAF production

Brazil will permit used cooking oil imports specifically for sustainable aviation fuel production, easing feedstock constraints and supporting domestic SAF deployment. Authorities expect this to accelerate production growth, with output projected to reach nearly 1.7 billion litres annually by 2030.

Environmental and Sustainability Regulation

US formally exits the Paris Agreement again

The United States officially withdrew from the Paris Agreement for the second time, reversing its 2021 re-entry and reinforcing uncertainty surrounding global climate diplomacy. While state-level climate alliances remain committed to emissions reduction, the federal withdrawal raises concerns over weakened international momentum.

Norway’s North Ammonia halts green ammonia project

Norwegian developer North Ammonia paused development of its flagship renewable ammonia project, citing insufficient political support. The decision highlights mounting challenges for large-scale green industrial projects amid rising costs, regulatory uncertainty, and shifting political priorities.