A huge Saudi oil refinery called Ras Tanura suffered damage overnight, per the kingdom's press agency and multiple news reports.

• And this morning LNG giant Qatar Energy said it has halted production due to military attacks on facilities in Ras Laffan Industrial City and Mesaieed Industrial City in Qatar.

Why it matters: "The attack on Saudi Arabia's Ras Tanura refinery marks a significant escalation, with Gulf energy infrastructure now squarely in Iran's sights," Torbjorn Soltvedt, a top analyst with risk intelligence firm Verisk Maplecroft, said in a note.

Driving the news: The refinery "sustained limited damage as a result of debris from the interception of two drones in its vicinity," the Saudi's state news agency said today.

• There was a "limited" and now-contained fire, with no injuries reported. But "some operational units at the refinery were shut down as a precautionary measure."

The big picture: Prices spiked when markets opened last night, with the global benchmark Brent crude hitting $82 per barrel, then receding somewhat.

• But prices have risen again this morning on news of the refinery attack.
• Brent is trading at $79 a barrel this morning, up nearly 9% from Friday's close.

Yes, but: The relatively limited rise suggests that traders are not yet predicting a worst-case scenario that does massive, lasting damage to oil infrastructure in Gulf states, which would send prices skyrocketing.

What we're watching: The strife will push up U.S. gasoline prices, though the amount and duration depends on how high oil prices climb and for how long.

• U.S. regular gasoline currently averages about $3 per gallon, per AAA.

Threat level: Ships are already avoiding the Strait of Hormuz, the narrow waterway abutting Iran that handles about a fourth of the world's seaborne oil trade, for several reasons.

• Even without a physical blockade and closure, insurance rates are skyrocketing for tankers moving crude and petroleum products, analysts note.
• And there have been reports of attacks on tankers near the strait.

Catch up quick: A Reuters piece explores onshore oil and gas sites in the Middle East that have been shut down as a precaution.

• And Bloomberg explores another spillover effect of the battle: surging European natural gas prices, with the bloc at risk of the most serious energy shock since Russia invaded Ukraine.

Zoom out: The conflict was already going to shake markets even without major direct strikes on oil production, processing or export infrastructure.

• Oil analyst Ellen Wald said that if ships avoid entering the strait for weeks, it could further boost prices.
• "If we're looking at this kind of level of military activity in the Gulf for four weeks, I think we will probably have some serious problems, particularly in Asia, for availability of crude oil and oil products," she told Axios yesterday evening.
• This could bring "serious price hikes and potentially even shortages in Asian countries," she said.

Zoom in: The Ras Tanura refinery can process 550,000 barrels per day and is close to a separate crude oil export complex.

• The refinery is a "key supplier of transport fuels like diesel for buyers in Europe and produces smaller quantities of gasoline," per Bloomberg.

What we're watching: Whether the military campaign brings new strikes on oil infrastructure from any side.

BlackRock's Global Infrastructure Partners and private equity heavyweight EQT are leading a consortium to acquire power giant AES Corp. in a deal with an enterprise value of $33.4 billion including debt.

Why it matters: Power deals are hot amid rising demand and the energy-thirsty AI boom.

• "This transaction will better position AES to drive long-term growth across its business units, including regulated electric utilities and competitive clean energy in the U.S. and critical energy infrastructure assets in Latin America," the announcement states.

State of play: The consortium also includes California Public Employees' Retirement System (CalPERS) and Qatar Investment Authority.

• The deal is for $15 per share of AES stock, a total equity value of $10.7 billion, the announcement states.

The intrigue: "AES has a significant need for capital to support growth beyond 2027, particularly given the significant new investments in both US generation and utilities businesses," AES chairman Jay Morse said in a statement.

What's next: The deal is expected to close late this year or in early 2027, the companies said.

President Trump is scheduled to appear with Big Tech execs Wednesday to promote the new "ratepayer protection pledge" on data center power that he hyped at the State of the Union.

Why it matters: The event might reveal what, exactly, the pledge entails. Details have been absent to date.

• It's broadly about hyperscalers financing or building new generation and shielding consumers from increased system costs.

The intrigue: It's unclear if there's anything new beyond existing corporate plans and brewing federal and regional policies.

• Ishyan Veluppillai of the advisory firm Capstone said in a note that the voluntary pledge is not a pivot from the Trump administration's "speed to power" strategy.
• "The pledge also does not require measures beyond what developers are already implementing," he writes.

What we're watching: TD Cowen analysts, in a note, said they're watching for whether the pledge endorses a particular pricing model, penalties, and "further direction" for the Federal Energy Regulatory Commission.

Giphy

Environmental groups supporting Vermont's "climate superfund" law said in a new court filing that EPA's repeal of the endangerment finding undercuts the Trump administration's lawsuit against the state statute.

Why it matters: It's an early sign of how green groups will use EPA's move to argue that state and local efforts should not be preempted by the federal government.

• Another place to watch this unfold: a new Supreme Court case about state and local governments' litigation against oil majors.

Driving the news: EPA's final rule "contradicts its litigating position in this case," states Friday's federal district court filing from the Conservation Law Foundation and the Northeast Organic Farming Association of Vermont.

• Preemption claims by business groups and red states opposing Vermont's law "rely on similar assertions of comprehensive agency authority over greenhouse gas emissions," it states.

Yes, but: EPA's final rule repealing the finding argues that federal preemption of certain state efforts remains intact for several reasons.

The bottom line: I haven't the slightest idea whether green groups' legal arguments on the ripple effects of endangerment repeal will hold sway anywhere. But it's clearly an emerging battleground.

⚖️ Greenpeace is "fighting for its life" following a North Dakota judge finalizing a $345 million penalty against the group over its role in protests a decade ago against Energy Transfer's Dakota Access Pipeline, CBS reports.

• Catch up quick: It stems from a jury verdict against Greenpeace last year.

☀️ Politico has a nice look at Trump-world's solar advocates and industry efforts to work with MAGA influencers.

🌊 The NYT previews this month's efforts by the International Seabed Authority to finally agree on rules governing deep-sea mining.

• Why it matters: The meeting comes as the Trump administration is moving to allow projects in the absence of such guidelines.

🤝 Commodities trading giant Trafigura has a binding agreement with LNG producer Venture Global to buy 500,000 metric tons annually for five years.

• Why it matters: "The deal underscores continued demand for flexible U.S. LNG as buyers and traders reposition, even as forecasts suggest the global market will move toward a more balanced outlook later this year," Reuters reports.

🚀 Exclusive: German space tech startup ISPTech raised a $6.5 million seed round to ramp up production of its low-cost, less toxic propulsion technology. Go deeper

🚛 Autonomous electric trucking tech startup Einride raised $113 million in PIPE financing for its SPAC deal with Legato Merger Corp. III. Go deeper

🌋 Scoop: Quaise Energy is raising about $200 million to develop its first commercial geothermal power plant. Go deeper

💡 Exclusive: Ubicquia, which deploys digital tech for infrastructure, raised a $106 million Series D. Go deeper

That was U.S. daily crude production in December, the last month with robust info, per new Energy Information Administration data.

Why it matters: It was the second consecutive monthly decline and might signal that a plateau or dip is upon us amid modest prices.