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The bills arrived, for the war premium and the AI premium at once, and the argument about who pays them began in earnest.

Oil went back through $100 on Thursday. Brent settled at $100.69 on Thursday after Houthi missile and drone strikes hit two Saudi tankers in the Red Sea, one of which caught fire. By Friday it had settled back to $96.78 on reports that China and Pakistan were working to restart talks between Washington and Tehran, with the ten-day ceasefire mediators floated earlier in the week reportedly still on the table as a confidence-building measure. The retreat tells you something about hope; the level tells you more about facts. The war now touches four separate arteries at once: visible tanker traffic through the Strait of Hormuz came close to a standstill on Monday after fresh strikes on two tankers off Oman; the Red Sea became contested on Thursday; and Ukrainian drone strikes forced the Caspian Pipeline Consortium to suspend loadings at its Black Sea terminal (the route that normally carries the bulk of Kazakhstan’s exports), and by Saturday the neighbouring Sheskharis terminal, roughly a fifth of Russia’s seaborne crude, had halted too. Nothing structural improved during Friday’s relief rally. American drivers, meanwhile, are paying $4.09 a gallon, up fifteen cents in a week and nearly a dollar in a year. Affordability does not wait for the diplomacy.

Europe hardened and softened towards Russia in the same breath. The EU’s twenty-first sanctions package, agreed on Thursday, carried 218 new designations (the largest single listing since early 2022), froze the oil price cap at $44.10 a barrel for twelve months so Russia cannot benefit from war-driven spikes, and for the first time targeted the refuelling vessels that service the shadow fleet at sea. It also, rather more quietly, gave EU companies a twelve-month derogation to keep carrying Russian LNG to third countries. The tell is in the storage data: EU gas stocks are only around 54 per cent full, among the weakest cushions for the date in some fifteen years, and Equinor’s chief executive said this week that Europe is unlikely to reach 80 per cent before winter. No LNG carrier has transited Hormuz since 11 July, Asian buyers are pulling cargoes, and TTF is back above €60/MWh. When the alternative supply is dearer than the principle, the principle tends to acquire a derogation.

Britain changed Prime Ministers, and reached first for a tax cut. Andy Burnham’s first week as Prime Minister brought Miatta Fahnbulleh to the Department for Energy Security and Net Zero (Ed Miliband moving to the Foreign Office) and a first act on the cost of living: VAT removed from domestic electricity bills from 1 October to the end of March, worth roughly £45 a year to a typical household at a reported cost of around £850 million, which the government says will be met by cancelling the Digital ID programme rather than by new borrowing. Cutting the tax on electricity but not gas is directionally right: it nudges the electricity-to-gas price ratio the way heat pumps and electric vehicles need it to go; but six months of 5 per cent is an anaesthetic, not a treatment. Cornwall Insight promptly trimmed its October price-cap forecast to around £1,700, down from roughly £1,850–£1,860 under the current July cap: what holds the cap up is the wholesale price of imported molecules, and no Budget line can zero-rate that. Elsewhere the machinery turned: the eighth CfD allocation round opened on Monday with more than 17 GW of offshore wind eligible, and the North Sea lobby moved fast: OEUK urged the new Secretary of State to “back homegrown energy over imports,” and Aberdeen secured her first visit in the job.

The American argument about who pays for AI’s electricity continued. On Thursday the White House expanded its “Ratepayer Protection Pledge” (the commitment by technology companies to pay their own way on data-centre power) to take in twenty-three governors (all Republican), more than two hundred power-sector organisations, and seven of the biggest AI names. It is voluntary and non-binding, which is worth holding in mind alongside the other numbers published the same week. PJM’s independent market monitor calculated that data centres accounted for $6.3 billion of the $16.4 billion in charges from the grid operator’s latest capacity auction, and close to half the cost across the last four; it proposed hiving them off into dedicated auctions with fifteen-year contracts. BloombergNEF projected that data centres could take a fifth of US electricity consumption by 2035, with a possible 19 GW supply shortfall. PG&E offered the counter-argument: its data-centre pipeline jumped 150 per cent in a single quarter, and it maintains each new gigawatt of that load can cut existing customers’ bills by 1 per cent or more, because big flat loads spread fixed grid costs. The consultancy ICF meanwhile projects US retail bills rising 15 to 40 per cent by 2030. Those claims can all be true somewhere: data-centre load can lower average bills under well-designed tariffs while raising capacity costs in particular markets. Ratepayers will find out which market they live in.

The builders’ numbers, whatever the argument, kept getting bigger. Last Sunday I suggested this week’s earnings would tell us about the demand trajectory; they did. Alphabet raised its 2026 capital spending guidance to $195–205 billion and its shares fell: capital markets fretting about software returns even as the physical order book says otherwise. GE Vernova’s orders rose 88 per cent organically, its gas-turbine backlog reached 116 GW, and its data-centre orders this year have already doubled the whole of 2025. OpenAI announced a 3.2 GW campus in Georgia, reported to involve roughly $20 billion of investment; that single project’s contracted demand is equivalent to about a third of the broader 10 GW system-expansion programme Georgia Power had approved in December. The capital followed: a record $40 billion data-centre acquisition closed on Tuesday, and Brookfield agreed to buy the battery-storage platform Aypa at around $7 billion. Note, though, where the electrons are coming from: a 2 GW West Texas campus will be powered behind the meter by a dedicated generation venture; Vattenfall is exploring data centres co-located with North Sea wind farms; and Tesla’s one unambiguously good number was 13.5 GWh of storage deployments, up around 40 per cent, while operating profit fell 57 per cent. Compute is moving towards power rather than queueing for the grid. Generation close to use is, increasingly, the engineering answer, whatever the policy weather.

The IEA measured the pain and hinted at the remedy. Its mid-year electricity update has global demand growing 3.6 per cent this year and 3.8 per cent next, with renewables overtaking coal in generation for the first time in 2026; and yet power-sector emissions still edging higher in 2026 before staying broadly flat in 2027, because expensive gas is pushing some systems back to coal. The wholesale price table is the paragraph that matters: EU and Japanese prices up more than 30 per cent year on year, the US roughly flat, and Australia down 45 per cent on the strength of renewables and batteries. The market with the sharpest fall in wholesale prices was the one where renewables and batteries most reduced the need for gas-fired generation at peak times. Worth writing on a whiteboard in Whitehall, ideally in permanent marker.

The wildfires: More than 250,000 people had been evacuated from wildfires in France and Spain by Saturday, Spain declared a national emergency, and France deployed the army and asked for EU help.

The ceasefire diplomacy. A ten-day pause is being floated, Saturday brought the first night without US strikes in nearly two weeks, and Oman-mediated talks on reopening Hormuz are reportedly advancing; but the strait remains disrupted, the Red Sea is contested (Saudi Arabia and the Houthis traded fire on Saturday), and Friday’s 4 per cent retreat priced in a negotiation that has not yet happened.

The ratepayer question. A voluntary pledge and a market monitor’s structural redesign are now on the table in the same market. Watch whether any regulator converts the pledge into tariff design.

The Fahnbulleh in-tray. Jackdaw and Rosebank decisions, the AR8 budget, and the licensing stance of a Burnham government: none yet dated, all consequential for the import bill.

The NESO investigation. The independent review of control-room conduct during June’s heatwave operations has yet to confirm a publication date.

Three central banks in forty-eight hours, with the oil price sitting in the room. The Federal Reserve decides on Wednesday; a fifth consecutive hold is the consensus, but futures markets now put the odds of a hike as soon as Wednesday at nearly 40 per cent, up from about 12 per cent a week ago, which is what a $96 barrel does to an inflation forecast. The Bank of England follows on Thursday at noon with a full Monetary Policy Report, and the Bank of Japan concludes on Friday with its quarterly outlook. Thursday is the heavy day: the US publishes its advance second-quarter GDP estimate and the June PCE inflation reading on the same morning (an unusual pairing), while Shell reports at 7am London time, having already flagged that the conflict has roughly halved its Qatari gas output. Microsoft and Meta report on Wednesday, Apple and Amazon on Thursday: after Alphabet’s raise, the hyperscalers’ combined capital spending run-rate is the single best real-time indicator of the demand story. ExxonMobil, Chevron and ENGIE close the week on Friday, and OPEC+’s core producers meet on Sunday 2 August to set September output, into a market currently being repriced by tankers rather than taps.

Importers pay twice: on the bill and on the borrowing. That is the shape of the week. Ten-year Treasury yields touched their highest in about eighteen months as oil crossed $100; a rate-rise debate has reopened in Washington on the back of an imported price; and Britain’s new government reached for a reported £850 million of redirected public spending to soften, for six months, a price set in the Gulf and the Hague-registered LNG fleet. None of this is deplorable in the moment: governments must do something about affordability, and tax is the lever they hold. But subsidising the consumption of imported energy is working capital, not investment. The balance-sheet repair lies where it has always lain: in using less (the unit never consumed remains the cheapest and cleanest on any bill), in using it more productively, and in generating close to the point of use, which, tellingly, is precisely what the world’s least sentimental buyers of energy are now doing for themselves in West Texas and the North Sea. Australia’s minus-45-per-cent wholesale price is not a climate statistic; it is a competitiveness statistic. The countries that treat efficiency and local generation as industrial strategy will spend the next decade lending; the ones that treat them as gestures will spend it borrowing.

A Very British Problem — why efficiency-first is the answer to Britain’s heat, cold and bills alike; this week’s price cap makes the case for me.
The Forcing Function — how EDGE infrastructure shortens the fuse between a missile strike in the Gulf and a bill arriving in Grantham.
Last week’s Weekend Edition — the hyperscalers give up waiting for the grid.

If you’ve found this useful, do share it — the Weekend Edition is free to all.

— Jonathan Maxwell Founder & CEO, SDCL · author of The Edge

Jonathan Maxwell is the CEO of Sustainable Development Capital LLP and author of The Edge. He writes about energy, climate, finance, and geopolitics. Views expressed are personal and do not constitute investment advice. To learn more about energy efficiency, visit the website of SEIT plc, or SDCL Group.

How I use AI. The EDGE Briefing is researched with the help of AI, run through a sequence of queries I have designed and refined over time, and checked against my own body of work on energy, efficiency and infrastructure. The machine gathers and cross-references; I select, verify, edit and take responsibility for every judgement. Any errors are mine.

Oil, gas and sanctions

• Bloomberg – Houthis open new front in Iran war by targeting ships in Red Sea (23 July)

• Bloomberg – Caspian Pipeline Consortium halts loadings after drone strike (19 July)

• S&P Global – EU loosens third-country Russian LNG ban, extends oil price cap in sanctions (23 July)

• AAA – Gas prices keep climbing; national average jumps 15 cents (23 July)

UK policy and bills

• ITV News – Burnham announces tax cut on energy bills from October (21 July)

• CfD Allocation Round 8 – application window opens (20 July)

• OEUK – Industry urges new Energy Secretary Miatta Fahnbulleh to back homegrown energy over imports (21 July)

AI and power

• Utility Dive – PJM market monitor on data centres and capacity auction costs (20 July)

• Bloomberg – Data centres on track for a fifth of US power use by 2035 (BNEF, 21 July)