HOUSTON — The Trump administration reached a nearly $1 billion agreement with French energy giant TotalEnergies on Monday to cancel its offshore wind leases off the coasts of New York and North Carolina. The announcement marks the latest blow by the Trump administration against the U.S. offshore wind industry, particularly in the Northeast, after it faced a series of recent legal losses. “The era of taxpayers subsidizing unreliable, unaffordable and unsecured energy is officially over,” Interior Secretary Doug Burgum told reporters at the CERAWeek by S&P Global conference in Houston. As part of the agreement, the Interior Department would terminate the leases for TotalEnergies’ Attentive Energy and Carolina Long Bay projects, worth $928 million, the department said. The lease sales occurred during the Biden administration. TotalEnergies committed to invest the value of those leases into oil and natural gas production in the United States, after which the United States will reimburse the company dollar-for-dollar for the amount they paid for the offshore wind leases, the department said. The company is poised to redirect the funds toward the Rio Grande LNG plant in Texas and the development of upstream conventional oil in the Gulf of Mexico and of shale gas production, according to the Interior Department. Burgum and TotalEnergies signed the agreements Monday from the conference. President Donald Trump has often attacked the U.S. offshore wind sector as unreliable and expensive. He’s repeatedly said he plans to have “no windmills built in the United States” under his tenure. Still, the settlement would suggest a new tack by the administration to target the sector. The Trump administration previously issued stop-work orders for offshore wind projects currently under construction on the East Coast, but judges lifted all five orders earlier this year. “Considering that the development of offshore wind projects is not in the country’s interest, we have decided to renounce offshore wind development in the United States, in exchange for the reimbursement of the lease fees,” TotalEnergies Chair and CEO Patrick Pouyanné said in a statement. Pouyanné previously said the company would halt development of the Attentive Energy project, off the New Jersey and New York coasts, following Trump’s return to the White House. Both the Attentive Energy and Carolina Long Bay projects were in the early stages of development. Pouyanné told reporters that the company continues to invest in solar, onshore wind and batteries. The deal is a major blow for New York’s offshore wind targets, although proposed projects in the lease area controlled by TotalEnergies and its partners never secured final contracts with the state. New York Gov. Kathy Hochul (D) called the prospect of a deal “not helpful” last week. Attentive Energy dropped out of a bidding process for deals with New York in October 2024, even before Trump’s election. The state concluded that process last month with no awards amid the federal uncertainty and officials have struggled to determine next steps for the industry writ large. Hochul has pivoted to an “all of the above” energy strategy in the face of Trump’s opposition to offshore wind — including nuclear and fossil fuels. Further delays to the development of the technology off New York’s coast will likely further the state’s reliance on repowering fossil fuel plants to serve the New York City region. The deal also leaves New Jersey without any workable offshore wind projects at a time when Democratic Gov. Mikie Sherrill is already searching for more clean energy to combat a regional power crunch. The project was supposed to provide more than 1,300 megawatts of power. Sherrill’s predecessor, Phil Murphy, had lofty ambitions for the industry that were all for naught. His administration approved a series of offshore wind projects that all ran into financial or permitting challenges. The state approved Attentive Energy’s project in early 2024 as part of an attempted reset of the industry, which was already facing woe. The new affront could also prove problematic to permitting reform discussions on the Hill, as Democratic lawmakers have linked progress on those negotiations to whether or not the administration continues its attacks on renewable energy. ClearView Energy Partners said in a note last week the deal could also “re-raise concerns about the durability of federal approvals and therefore further erode, but not eliminate, the thin opportunity for bipartisan permitting reform on Capitol Hill.” So far, Senate Environment and Public Works ranking member Sheldon Whitehouse (D-R.I.) is staying the course on permitting talks, despite reports of the settlement agreement last week — a development he derided as “just more selling out the public for the fossil fuel industry.” His office did not immediately provide further comment Monday. Some Moderate New York Republicans last week also criticized the reported settlement. Marie French and Ry Rivard contributed to this report.

The EU has sent assistance to Moldova after a Russian attack on a Ukrainian hydroelectric station, which is suspected of polluting the Dniester River, left hundreds of thousands without safe drinking water. The river, also known as the Nistru river, flows through both countries. The Russian attack took place upstream of Moldova. “Russia’s attack on Ukraine’s Novodnistrovsk hydropower plant has spilled oil into the Nistru River, threatening Moldova’s water supply,” wrote President Maia Sandu. “Russia bears full responsibility,” she added. The city of Bălți and the surrounding areas in northern Moldova have been without running water for several days, according to Prime Minister Alexandru Munteanu.  “Our teams are working around the clock on the ground, using all available resources, and our priority is to restore the water supply. However, this will only be done under conditions that fully ensure people’s safety and health,” wrote Munteanu. Russia’s ambassador to Moldova, Oleg Ozerov, was summoned by the government on Monday to answer for the damage, and was “gifted” a plastic bottle filled with polluted water from the Dniester River. Brussels triggered its Civil Protection mechanism on Tuesday to provide emergency assistance to the affected areas of the Moldova, which is an EU candidate country. Luxembourg and neighboring Romania have sent rescue supplies, it was announced today. Russia has frequently targeted Ukraine’s energy infrastructure since invading the country more than four years ago. Neighboring countries have been affecting previously, too, with Russian drones sometimes violating EU countries’ airspace.

President Donald Trump is demanding that the Federal Reserve immediately lower borrowing costs. But the war in the Middle East has now made any interest rate cuts much less likely in 2026 — not just in the U.S. but around the world. With oil prices surging past $100 a barrel and Gulf shipping routes disrupted by Iran, governments and investors are bracing for a repeat of the 2022 energy shock from Russia’s invasion of Ukraine. And from Washington to Frankfurt, and London to Tokyo, the world’s central banks are likely to strike a more wary tone on inflation while assessing the fallout during a flurry of policy meetings taking place this week. The effective closure of the Strait of Hormuz, a channel through which roughly a fifth of global oil passes, is pushing up costs not only for energy and transportation, but also for other key goods that are shipped through the waterway. The result could be a toxic mix for central banks: higher prices and lower employment, two problems they’re not equipped to address simultaneously. “My best guess, but spoken with no conviction at all, is that this gets sorted out somehow in the next few weeks, and by the middle of the year, oil prices have come back down a fair amount,” said William English, a former top staffer at the Fed who is now a professor at Yale University. “But there’s a real risk, of course, that things go on for longer and are more damaging. And in that case, all bets are off.” The specter of a prolonged global energy crunch could dash the hopes of consumers, businesses and investors worldwide for rate cuts this year — and in some cases, throw those plans in reverse. No immediate moves are likely except in Australia, which raised its target rate by a quarter-point on Tuesday. But markets have already repriced their bets on what comes next from monetary policymakers. Indeed, if the Fed does cut rates later this year, it might be one of the few major central banks that does so, given that other economies like Europe are more exposed to higher energy costs than the U.S. Before the war, investors saw a chance of cuts from the Fed, the European Central Bank and the Bank of England. Now they’re pricing in an altogether tighter policy stance: at least one ECB rate hike this year, a 60 percent chance of a BoE increase, fewer and later cuts from the Fed and more urgency in raising rates from the Bank of Japan. Central bankers will prefer to wait until they get a better gauge of the economic repercussions from the conflict because “the shock could turn out to be negligible or very large,” said EFG chief economist Stefan Gerlach. But few doubt the need for strong messaging as central banks are wary of repeating 2022, when energy price shocks combined with the after-effects from Covid and fiscal stimulus to morph into the worst inflation spike in half a century. “There will be a significant contingent worrying about upside inflation risks in light of the 2022 experience,” J.P. Morgan economist Greg Fuzesi said ahead of the ECB’s policy-making council’s meeting on Thursday. The Iran conflict is further complicating efforts by Trump to demonstrate to voters that the GOP is addressing cost-of-living concerns before this year’s midterm elections. Already, the war has caused a surge in politically salient gas prices and erased some of the progress toward more affordable mortgage rates. And it’s further muddied the picture for a central bank that the president has been pressing hard to take decisive action toward rate cuts. Now, when Chair Jerome Powell and other Fed officials meet on Wednesday, they’re expected to be more open to the idea of rate increases later this year, though that’s still not the likeliest outcome. As Yale’s English pointed out, higher costs might ultimately increase the case for rate cuts if they slow the economy significantly. “With the higher oil prices and the shock to the global economy, the likelihood of overheating seems reduced now, so that’s one of the reasons you might be comfortable waiting through some period of higher inflation,” rather than hiking rates in response, English said. “This might be enough to push the economy into real weakness, and in that case, they might well have to cut.” But if households and businesses start to worry about a new acceleration in inflation and start expecting higher prices, that dynamic can be self-fulfilling and might call for rate hikes. Hawkish policymakers are already signaling the ECB won’t hesitate this time. “A reaction by the ECB is potentially closer than many people think,” Peter Kažimír, Slovakia’s central bank governor, told Bloomberg last week. “We will be ready to act if needed.” President Christine Lagarde pledged to ensure that consumers “don’t suffer the same inflation increases like those we saw in 2022 and 2023.” Back then, the ECB was slow to react, helping inflation surge past 10 percent. Economists say today’s backdrop looks very different: In 2022, rates were near or below zero, balance sheets were bloated and fiscal policy was highly expansionary. “When inflation rose, it did so in an environment of strong demand supported by both fiscal and monetary stimulus,” said Gerlach. Now, tighter monetary and fiscal policy should limit the risk of energy shocks spilling through the economy into second-round effects. Still, Barclays analyst Silvia Ardagna says that if medium-term inflation expectations “deteriorate significantly,” she expects “the ECB to act more swiftly than in 2022, but to tighten policy gradually.” Nick Kounis, of Dutch bank ABN AMRO, also sees a more hawkish tone. “Uncertainty on the conflict is high, but if the current situation persists through to the April meeting, a hike becomes a distinct possibility,” he said. Many analysts say the first obvious central bank casualty of the war is likely to be the Bank of England, which was widely expected to cut this week but is now seen firmly on hold. That’s because the U.K. still hasn’t quite gotten on top of the inflation that was unleashed four years ago. Andrew Benito, an economist with hedge fund Point72 in London, reckons that the inevitable increase in fuel prices and household energy bills alone will add a full percentage point to headline inflation by summer, with “second-round” impacts on other prices pushing it even further away from the BoE’s target. That, says Deutsche Bank’s Sanjay Raja, will force the bank into some “uncomfortable trade-offs”: The U.K. economy has already slowed over the last year due to global trade uncertainty and various government tax hikes to close the budget deficit. Hiking rates when the economy is already struggling could risk needlessly making things worse. But any sign of complacency could be disproportionately punished by the markets, given that the BoE performed worse than any other major central bank during the last inflation shock (the headline rate peaked at over 11 percent). Raja expects BoE Governor Andrew Bailey to highlight the differences with 2022 — when inflation was accelerating rather than slowing — as one reason not to overreact to today’s price spike. However, he expects that Bailey, like the ECB and others, will talk tough about not letting business and households develop an inflationary mindset again. More important will be the Bank of Japan’s decisions and press conference on Thursday, due to the outsized influence of Japanese interest rates on global financial markets. For decades, Japan kept interest rates low and printed money furiously to escape deflation. As long as it did so, Japanese and foreign investors borrowed yen cheaply to throw at higher-yielding markets such as the U.S. Now, however, the BoJ’s concerns have finally switched from deflation to inflation, and BoJ Governor Kazuo Ueda is now in a hurry to “normalize” policy. Its key interest rate, at 0.75 percent, is the lowest in the developed world outside Switzerland. But Japan, too, faces a big headwind from higher energy prices because of its dependence on imports, and Gregor Hirt, chief investment officer for Multi Asset at Allianz Global Investors, argues that the BoJ will hesitate before raising rates again. The trouble with waiting and seeing is that the yen has already lurched lower, prompting alarm in Washington and sparking rumors of possible intervention to support it. “In order to stop further weakness, the BoJ may have to move up a rate hike to stabilize the currency,” Hirt said. Meanwhile, the war has presented the Swiss National Bank, which has kept interest rates at zero since June 2025, with a different kind of conundrum. One risk is that a global “flight to safety” drives the Swiss franc to even greater heights against the euro and others. That could make so many imports cheaper that the overall inflation rate could turn negative. Alternatively, the boost in energy prices could have the same malign impact on inflation as it will elsewhere. “The SNB will probably prefer to wait and see which of the two effects will have the greater impact on inflation prospects before acting in one direction or the other,” said ING economist Charlotte de Montpellier, who expects the Swiss central bank to stay on hold. That response, shot through with varying degrees of nervousness, looks likely to be the dominant one this week. But things will look very different if the war situation hasn’t improved by the next round of meetings.

BRUSSELS — The EU’s announcement that Ukraine has accepted its offer to help repair the Druzhba oil pipeline gives Viktor Orbán a chance to end his showdown with Brussels over a loan to Kyiv, according to two EU officials. Two days before EU leaders meet for crunch talks in Brussels, European Commission President Ursula von der Leyen and European Council President António Costa said that “the Ukrainians have welcomed and accepted” an offer of “technical support and funding” to help repair the damaged pipeline, in a bid to restore Russian oil flows to Hungary and Slovakia. Orbán has refused to back a €90 billion loan to fund Ukraine’s war effort unless the oil starts flowing. The agreement gives Orbán a way out of the standoff with the EU as he attempts to overturn a nine-point polling deficit ahead of Hungary’s April 12 election, according to the two officials, who granted anonymity to speak freely on the sensitive diplomacy, as were others in this article. In a video posted to social media after Tuesday’s pipeline news, Orbán doubled down, saying that “if there is no oil, there is no money” for Ukraine. But a diplomat familiar with Budapest’s thinking hinted there could be room for a breakthrough ahead of Thursday’s summit, given the movement from the EU and Ukrainian President Volodymyr Zelenskyy. Brussels wants Orbán to lift his veto on the delayed 20th package of sanctions against Russia and on the loan to Ukraine, which EU leaders, including the Hungarian prime minister, agreed to in December. Orbán later changed his mind, taking the unprecedented step backtracking on a decision agreed at a European Council meeting. Two senior EU officials said Brussels believed Orbán was looking for an off-ramp. Orbán has used the spat with Ukraine over the Druzhba pipeline to score political points against his rival, Tisza party leader Péter Magyar. Orbán accused Kyiv of intentionally delaying repairs to the pipeline, which was damaged during a Russian drone attack in late January, to help Magyar in the election — a claim Tisza and Kyiv strongly deny. Zelenskyy has denied he has been slow-walking repairs to the pipeline for political reasons. He said he didn’t want to fix Druzhba both because Russia has repeatedly attacked it, including during repair works, and because doing so would help fill the Kremlin’s coffers and allow Moscow to continue its full-scale invasion of Ukraine. He has decried the pressure placed on him by his EU allies, accusing them at the weekend of “blackmail.” But on Tuesday, Zelenskyy finally agreed to the request. In a letter sent to von der Leyen and Costa, Zelenskyy said, “We are undertaking all possible efforts to repair the damage and restore operations” of the pipeline. “Ukraine is a reliable energy partner for the European Union and honours fully its commitments,” he added. In their response to Zelenskyy, von der Leyen and Costa said his acquiescence “would allow [the EU] to move forward in a timely manner with the EU Ukraine Support Loan funding for your own macro-economic stability and for the purchase of defence equipment, as well as the final adoption of the 20th package of sanctions.” The Council and Commission presidents also said their priority “is to ensure energy security for all European citizens,” while working on “alternative routes for the transit of non-Russian crude oil” to Central and Eastern Europe. Speaking to POLITICO on Monday, before the announcement, Hungary’s EU Minister János Bóka said: “I see that the mood has changed after the escalation of the crisis in the Middle East. I think now that most member states do understand that the Ukrainian decision to cut off access to the Druzhba pipeline undermines energy security and security of supply in the Central European region, and this will have implications for the European Union as a whole.” “I think that this understanding is slowly but surely sinking in and my feeling is that the Commission can no longer pretend that it is OK not to do anything in order to help two member states in securing their energy supplies through Ukraine via the Druzhba pipeline,” Bóka added. The episode has been a bruising one for Brussels and for Ukraine, which needs the EU cash to keep afloat through this year and was meant to start receiving the money from April. A previous bid to use frozen Russian assets to fund Ukraine collapsed at the last minute in December amid opposition from Belgium. Any EU country can block the €90 billion loan, because one of the bills that needs approval before the cash can be disbursed requires a unanimous yes from all member countries. Kyiv was expected to run out of money by April, but the urgency eased somewhat after the International Monetary Fund approved an $8.1 billion loan late last month. Ukraine should have enough money to stay solvent until early May, POLITICO reported last week. The EU now appears cautiously optimistic that Orbán may climb down from blocking the loan and sanctions — but potentially not until after the Hungarian election next month. Costa expects Orbán to follow through on the commitment he made at the December EU leaders’ summit “in the very short run,” said one of the EU officials above. But while a German official conceded there is now “some momentum” to resolve the issues over Druzhba, whether a deal on the €90 billion loan will be done at Thursday’s leaders’ summit “remains to be seen.” Nette Nöstlinger, Sebastian Starcevic, Gabriel Gavin and Gerardo Fortuna contributed reporting.

Netflix co-CEO Ted Sarandos arrives in Brussels on Tuesday with a clear message for EU regulators ahead of a looming review of Europe’s streaming rules: Don’t overcomplicate them. In an exclusive interview with POLITICO, Sarandos said Netflix can live with regulation — but warned the EU not to fracture the single market with a patchwork of national mandates as officials prepare to reopen the Audiovisual Media Services Directive. “It doesn’t make it a very healthy business environment if you don’t know if the rules are going to change midway through production,” Sarandos said. He also warned regulators are underestimating YouTube as a direct competitor for TV viewing, too often treating it like a social media platform with “a bunch of cat videos” than a massive streaming rival. Sarandos’ effort to win over European regulators comes soon after the collapse of Netflix’s bid to buy Warner Bros. Discovery — but Sarandos maintained that the political dynamics around the deal only “complicated the narrative, not the actual outcomes.” He added that there was no political interference in the deal, and he shrugged off President Donald Trump’s demand to remove Susan Rice, a former national security adviser under President Barack Obama, from the Netflix board. “It was a social media post,” Sarandos said. “It was not ideal, but he does a lot of things on social media.” This conversation has been edited for length and clarity. What’s bringing you back to Brussels now? Well, we have ongoing meetings with regulators around Europe all the time. We have so much business in Europe, obviously, and so this has been on the books for quite a while. Can you give me a little bit of a sense of who you’re meeting with, and what is the focus? I think one of the things to keep in mind is that we’ve become such an important part, I’d think, of the European audiovisual economy. We’ve spent, in the last decade, over $13 billion in creating content in Europe. It makes us one of the leading producers and exporters of European storytelling. First of all, we’ve got a lot of skin in the game in Europe, obviously. We work with over 600 independent European producers. We created about 100,000 cast and crew jobs in Europe from our productions. So we talk to folks who are interested in all the elements of that — how to keep it, how to maintain it, how to grow it and how to protect it. In terms of regulation in the EU, Netflix is governed by a directive here. The commission is looking to reopen that this year. There seems to be a sense here from regulators that the current rules don’t create a level playing field between the broadcasters, the video on demand, the video sharing, and so they may look to put more requirements on that. How steeped in the details are you there? And how would Netflix react to more rules put on Netflix at this moment? Well, first and foremost, we comply with all the rules that apply to us in terms of how we’re regulated today. We have seen by operating around the world that those countries where they lean more into incentives than the strict regulatory scheme, that the incentives pay off. We’ve got multibillion dollar investments in Spain and the UK, where they have really leaned into attracting production through incentives versus regulatory mandates, so we find that that’s a much more productive environment to work in. But the core for me is that obviously they’re going to evolve the regulatory models, but as long as they remain simple, predictable, consistent — the single market, the benefit of the single-market is this — as long as these rules remain simple, predictable and consistent, it’s a good operating model. I think the more that it gets broken up by individual countries and individual mandates, you lose all the benefits of the single market. There’s a lot of talk in Brussels right now about simplification, getting rid of a lot of red tape. Do you think the rules that you’re governed by would benefit from a similar kind of effort to simplify, of pulling back on a lot of these patchwork of rules, even at the EU? Look, I think it doesn’t make it a very healthy business environment if you don’t know if the rules are going to change midway through production, so for me, having some stability is really important, and I understand that we’re in a dynamic market and a dynamic business, and they should reflect the current operating models that we’re in too. We want to work closely with the regulators to make sure that what they’re doing and what we’re doing kind of reflect each other, which is trying to protect the healthy work environment for folks in Europe. When you meet with regulators here, is there a message you’re going to be delivering to them or what do you want them to walk away with in terms of the bottom line for you in terms of your business at this moment in the EU? I think some things are well understood and other things I think are less so. I think our commitment to European production is unique in the world. Both in our original production but also in our investment in second right’s windows that we pre-invest in films that compel production. Tens of millions of dollars’ worth of film production is compelled by our licensing agreements as well beyond our original production. And the fact that we work with local European producers on these projects — I think there’s a misconception that we don’t. And the larger one is the economic impact that that brings to Europe and to the world with our original program strategy that supports so many, not just the productions themselves but even tourism in European countries. Think about President [Emmanuel] Macron pointing out that 38 percent of people who went to France last year cited “Emily in Paris” as one of the top reasons they went. We’ve seen that in other countries. We saw it in Madrid with the “Casa de Papel.” And so it’s one of those things where it really raises all boats across the economies of these countries. Regulators often focus on the competition between streaming services, but as you know very well, younger audiences are spending more time on platforms like YouTube. Do you think policymakers are underestimating that shift? Would you like to see that taken into account more in the regulatory landscape? One of the things that we saw in recent months with the Warner Brothers transaction is a real deep misunderstanding about what YouTube is and isn’t. YouTube is a straightforward direct competitor for television, either a local broadcaster or a streamer like Netflix. The connected television market is a zero-sum screen. So whichever one you choose, that’s what you’re watching tonight. And you monetize through subscription or advertising or both, but at the end of the day, it’s that choosing to engage in how you give them and how, and how that programming is monetized is a very competitive landscape and it includes YouTube. I think what happens is people think of YouTube as a bunch of cat videos and maybe some way to, to promote your stuff by putting it on there for free. But it turns out it is a zero-sum game. You’re going to be choosing at the expense of an RTL or Netflix. I think in this case it’s one of these things where recognizing and understanding that YouTube is in the same exact game that we are. Do you feel like you’re on different planes though, in the eyes of regulators at this moment? I don’t think that they see them as a direct competitor in that way. I think they think of that as an extension of social media. And the truth is when we talk about them as a competitor, we’re only talking about them on the screen. I’m not talking about their mobile usage or any of that. You know, about 55 percent of all YouTube engagement now is on the television through their app. So to me, that’s the thing to keep an eye on. As you get into this, it’s a pretty straightforward, competitive model and we think probably should have a level playing field relative to everybody else. Who do you view as Netflix’s main competitors today? Look, our competitive space is really the television screen. When people pick up the remote and pick what to watch, everyone is in that mix. We identified YouTube — this isn’t new for us — we identified YouTube as a competitor in the space 10 years ago, even before they moved to the television. And I think, for the most part, TikTok forced their hand to move to the television because they were kind of getting chased off the phone more or less by TikTok. I think that’s the other one that regulators should pay a lot of attention to is what’s happening with the rise of TikTok engagement as well. It’s not directly competitive for us, but it is for attention and time and to your point, maybe the next generation’s consumer behavior. Last question on regulation: With the EU looking at the rules again, there’s a tendency always to look to tinker more and more and do more. Is there a point at what regulation starts affecting your willingness to invest in European production? Well, like I said, those core principles of predictability and simplicity have really got to come into play, because I think what happens is, just like any business, you have to be able to plan. So, if you make a production under one set of regs and release it under another, it’s not a very stable business environment. The topic that dominated a lot of your attention in recent months was obviously the merger talks with Warner Brothers Discovery. I know you’ve said it didn’t work for financial reasons. I want to ask you a little bit about the political dynamics. How much did the political environment, including the Susan Rice incident, how much did that complicate the calculus in your mind? I think it complicated the narrative, not the actual outcomes. I think for us it was always a business transaction, was always a well-regulated process in the U.S. The Department of Justice was handling it, everything was moving through. We were very confident we did not have a regulatory issue. Why would that be? It’s because it was very much a vertical transaction. I can’t name a transaction that was similar to this that has ever been blocked in history. We did not have duplicated assets. We did have a market concentration issue in the marketplace that we operate in. And I think that’s the feedback I was getting back from the DOJ and from regulators in general, which was, they understood that, but I do think that Paramount did a very nice job of creating a very loud narrative of a regulatory challenge that didn’t exist. But looking back to those early days of the merger discussions, did you have an appreciation for what might follow in terms of that complicated narrative? Yeah. Look, I think it opens up the door to have a lot of conversations that you wouldn’t have had otherwise, but that’s okay. A lot great things came out of it, the process itself. I would say in total, we had a price for where we thought this was good for our business. We made our best and final offer back in December and it was our best and final offer. So that’s all. But what came out a bit that’s positive is, we’ve had really healthy conversations with folks who we hardly ever talked to, theater operators, as a good example. I had a great meeting in February with the International Union of Cinemas, and the heads from all the different countries about what challenges they have, how we could be more helpful, or how they could be helpful to us too. I think we’ll come out of this with a much more creative relationship with exhibitions around the world. And by way of example, doing things that we haven’t done before. I don’t recommend testifying before the Senate again, but it was an interesting experience for sure. Probably a good learning experience. Hopefully not in the future for anything that you don’t want to be there for, but yes. Yeah, exactly. We’ve always said from the beginning, the Warner transaction was a nice-to-have at the right price, not a must-have-at-any-price. The business is healthy, growing organically. We’re growing on the path that we laid out several years ago and we didn’t really need this to grow the business. These assets are out there through our growth period and they’re going to be out there and for our next cycle growth as well and we’ve got to compete with that just like we knew we had to at the beginning. This was I think something that would fortify and maybe accelerate some of our existing models, but it doesn’t change our outcome. Are there regrets or things you might have wished you’d done differently? I mean honestly we took a very disciplined approach. I think we intentionally did not get distracted by the narrative noise, because we knew, we recognized what it was right away, which is just narrative noise. This deal was very good for the industry. Very good for both companies, Warner Brothers and Netflix. Our intent was obviously to keep those businesses operating largely as they are now. All the synergies that we had in the deal were mostly technologies and managerial, so we would have kept a big growth engine going in Hollywood and around the world. The alternative, which we’ve always said, is a lot of cutting. I think regulators in Europe and regulators in the U.S. should keep an eye on horizontal mergers. They should keep a close eye on [leveraged buyouts]. They typically are not good for the economy anywhere they happen. What were you preparing for in terms of the EU regulatory scrutiny with Warner Brothers? What was your read on how that might have looked? I think we’re a known entity in Europe. Keep in mind, like in Q4 of last year, we reported $3.5 billion or $3.8 billion in European revenues. So 18 percent year-on-year growth. The EU is now our largest territory. We’re a known entity there. The reason we didn’t take out press releases, we had meetings in Europe as we know everybody. We talked to the regulators, both at the EU and at the country level. And I do think that in many of the countries that we operate in, we’re a net contributor to the local economy, which I think is really important. We’ve got 12 offices across Europe with 2,500 people. So we’re members of the local ecosystem, we’re not outsiders. With President Trump, he demanded that Netflix remove Susan Rice from the board or pay the consequences. Did that cross a line for you in terms of political interference? It was a social media post, and we didn’t, no, it did not. It was not ideal, but he does a lot of things on social media. So you didn’t interpret it as anything bigger than that. I mean, he does that one day, he could obviously weigh in on content the next day. How does somebody like you manage situations like that? I think it’s really important to be able to separate noise from signal, and I think a lot of what happens in a world where we have a lot of noise. There was so much attention to you going to the White House that day. And we didn’t learn until several days later that you didn’t actually have the meetings that were predicted. Before you arrived in Washington that day, had you already made the decision not to proceed? Not before arriving in Washington, but we knew the framework for if this, then that. So, yeah, I would say that it was interesting, but again, we don’t make a big parade about our meetings with government and with the regulators. I had a meeting on the books with the DOJ scheduled several weeks before, meeting with Susie Wiles, the president’s chief of staff, scheduled several months before, unrelated to the Warner Brothers deal. And that was just the calendar that lined up that way. We didn’t know when Warner Brothers would make the statement about the deal. It’s all very dramatic, like it belongs on Netflix as a movie. There was paparazzi outside of the White House waiting for me when I came out. I’ve never experienced that before. Yeah, it’s a remarkable story. I would tell you, and I’m being honest with you, there was no political interference in this deal. The president is interested in entertainment and interested in deals, so he was curious about the mechanics of things and how things were going to go or whatever, but he made it very clear that this was under the DOJ. So it’s just like we all spun it up from the media? How do you explain it all? First of all, Netflix is clickbait. So people write about Netflix and it gets read. And that’s a pretty juicy story. And [Trump] said, and by the way, like I said, he makes statements sometimes that lead to the beliefs of things that do and sometimes that don’t materialize at all. But I found my conversations with him were 100 percent about the industry, protecting the industry. And I think it’s very healthy that the president of the United States speaks to business leaders about industries that are important to the economy. To what degree did the narrative or the fact that David Ellison had a relationship or seemed to have a relationship with people in Washington who were in power, that that might have swayed or changed the dynamic at the end with where Warner Brothers went though? I can’t speak to what their thinking is on it. I feel like for me, it’s very important to know the folks in charge, but I wouldn’t count on it if you’re doing something that is not in the best interest of the country or the economy. You talked with Trump in the past about entertainment jobs. Were there specific policies you’ve advocated to him or anything that he brought up on that point? He has brought up tariffs for the movie and television industry many times. And I’ve hopefully talked to him the way out of them. I just said basically the same thing I said earlier. I think that incentive works much better. We’re seeing it in the U.S. things like the states compete with each other for production incentives and those states with good, healthy incentive programs attract a lot of production, and you’ve seen a lot of them move from California to Georgia to New Jersey, kind of looking for that what’s the best place to operate in, where you could put more on the screen. And I do think that having the incentives versus tariffs is much better. Netflix is now buying Ben Affleck’s AI company. What areas do you see AI having the most potential to change Netflix’s workflow? My focus is that AI should be a creator tool. But with the same way production tools have evolved over time, AI is just a rapid, important evolution of these tools. It is one of those. And the idea that the creators could use it to do things that they could never do before to do it. Potentially, they could do faster and cheaper. But the most impact will be if they can make it better. I don’t think faster and cheaper matters if it’s not better. This is the most competitive time in the history of media. So you’ve gotta be better every time out of the gate. And faster and cheaper consumers are not looking for faster and cheaper, they’re looking for better. I do think that AI, particularly InterPositive, the company we bought from Ben, will help creators make things better. Using their own dailies, using their own production materials to make the film that they’re making better. Still requires writers and actors and lighting techs and all the things that you’d use to make a movie, but be able to make the movie more effective, more efficient. Being able to do pick up shots and things like this that you couldn’t do before. It’s really remarkable. It’s a really remarkable company. As AI improves, do you see the role of human voice actors shrinking at Netflix? What’s interesting about that is if you look at the evolution of tools for dubbing and subtitling, the one for dubbing, we do a lot of A-B tests that people, if you watch something and you don’t like it, you just turn it off. The one thing that we find to be the most important part of dubbing is the performance. So good voice actors really matter. Yeah, it’s a lot cheaper to use AI, but without the performance, which is very human, it actually runs down the quality of the production. Will it evolve over time? Possibly, but it won’t evolve without the cooperation and the training of the actual voice actors themselves too. I think what will happen is you’ll be able to do things like pick up lines that you do months and months after the production. You’ll be able to recreate some of those lines in the film without having to call everybody back and redo everything which will help make a better film. You’re in the sort of early stages of a push into video podcast. What have you learned so far about what works and what doesn’t? It’s really early. The main thing is we’ve got a broad cross-section of podcasts. It’s nowhere near as complete as other podcast outlets yet. But the things that we leaned into are the things that are working. We kind of figured they would. You’ve got true crime, sports, comedy, all those things that we do well in the doc space already. And I really am excited about things where people can develop and deepen the relationship with the show itself or the [intellectual property] itself. Our Bridgerton podcast is really popular, and people really want to go deeper and we want to be able to provide that for them. I think a video podcast is just the evolution of talk shows. We have tried to and failed at many talk shows over the years, and for the most part it’s because the old days of TV, when 40 million people used to tune in to the Tonight Show every night, [are over]. What’s happened now is that it’s much smaller audiences that tune into multiple shows in the form of a podcast every day. And then they come up to be way bigger than the 40 million that Johnny Carson used to get. They’re all individual, and it’s a deeper relationship than it is a broad one. So instead of trying to make one show for the world, you might have to make hundreds or thousands of shows for the whole world.

Teresa Graham, © EFPIA European governments navigate an ever more competitive global landscape, stagnating productivity and competing demands on budgets. We have successfully faced and solved many challenges in the past, but this situation is different: the choices we make today will shape our health care systems and patient care, and these choices will dictate Europe’s economic performance and global relevance for decades to come. For those of us in the life sciences, these aren’t just macroeconomic trends — they are the pulse of a system that determines how quickly a breakthrough reaches a patient. It is a high-stakes environment where policies on health care and innovation carry urgent human and economic consequences. When a medicine has the power to treat or potentially cure, neither innovators nor policymakers want to drag their heels, because no person requiring health care can afford the luxury of delay. > The true economic burden of health care isn’t financing health innovation, but > the cost of failing to do so. Europe’s challenge is clear: we must better align our industrial strength in life science with public health goals, ensuring innovation reaches both patients and economies faster. The question is no longer what Europe wants to be — it is where Europe chooses to invest to remain a global player. Health as e conomic i nfrastructure Under the weight of mounting budget pressures, it is understandable that governments often view health primarily as a cost to be contained. However, this perspective is disconnected from modern economic reality. And let me be clear: the true economic burden of health care isn’t financing health innovation, but the cost of failing to do so. For years, Europe has already been paying the price of lost productivity: citizens forced out of the workforce too early and chronic diseases managed too late. For instance, cardiovascular diseases alone cost the E uropean U nion economy up to €282 billion annually. This creates a massive yet avoidable strain on national budgets, especially as pharmaceutical innovation is estimated to be responsible for up to two-thirds of life expectancy gains in high-income countries . 1 > Every medical breakthrough that enables a citizen to return to work or care > for their family is a direct investment in Europe’s economic strength. We must shift our mindset . H ealth is not merely a social good; it is economic infrastructure. Healthier societies are inherently more productive and resilient, and every medical breakthrough that enables a citizen to return to work or care for their family is a direct investment in Europe’s economic strength. Investing in innovation today is the only way to secure a competitive workforce and reduce long-term systemic costs. The c ompetitiveness t est: a s trategic a sset, n ot a l ine i tem Europe’s life sciences sector is one of the few remaining areas that retains genuine global competitiveness and strength, contributing more than €300 billion to annual output and supporting 2 million high-skilled jobs across m ember s tates . 2 It anchors Europe’s trade resilience, generating a trade surplus 66 percent higher than all other EU sectors combined . 3 But the warning signs are clear: while Europe still accounts for 20 percent of global pharmaceutical research and development , its share of global investment is shrinking as capital and talent migrate elsewhere . 4 Europe’s world-class science is being held back by fragmentation and regulatory inertia. > We must treat this sector as a pillar of our sovereignty and a strategic > asset, not merely a cost to be managed. If we want to lead the next wave of medical breakthroughs, we must move at the speed of global change. This requires a fundamental shift: simplifying clinical trial regulations, deploying AI-driven digital tools, incentivizing research through strong intellectual property frameworks and establishing a public-private dialogue on innovative pharmaceuticals. We need a clear action plan, not just more legislation, to translate our scientific leadership into tangible health outcomes.   We must treat this sector as a pillar of our sovereignty and a strategic asset, not merely a cost to be managed.  A  c onsequential  c hoice  Europe has to choose. Either we can continue to approach life science innovation as a budgetary threat, only to reali z e too late that we have weakened our competitiveness and delayed new treatments for patients. Or we can recogni z e innovation for what it is  —  an economic multiplier that strengthens our productivity, resilience  and global influence  —  and ensure that Europe remains a place where the next generation of medical breakthroughs is discovered, developed  and delivered to patients.  There is no middle ground. Europe must stop focus ing solely on the cost of innovation and start asking how much innovation it can afford to lose. In the global race for talent and capital, hesitation is a decision. The rest of the world is not waiting. -------------------------------------------------------------------------------- References 1. The value of health: Investing in Europe’s future [EPC 2026] 2. Economic and Societal Footprint of the Pharmaceutical Industry in Europe [VE / PwC 2024] 3. International trade of EU and non-EU countries since 2002 by SITC [Eurostat 2026] 4. The 2025 EU Industrial R&D Investment Scoreboard [EC 2025] -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is European Federation of Pharmaceutical Industries and Associations (EFPIA) * The entity ultimately controlling the sponsor is European Federation of Pharmaceutical Industries and Associations (EFPIA) * The political advertisement is linked to  EU pharmaceutical regulation and innovation policy. More information here.

LONDON — War in the Middle East has put Keir Starmer in a tight spot.  The U.K. government can’t afford to spend big on protecting voters from looming energy bill hikes. But politically, the British prime minister has little choice.  Starmer said Monday that his “first instinct” in responding to the Iran conflict — and the global energy price shock it has triggered — is protecting the household finances of ordinary voters.  “It’s moments like this that tell you what a government is about,” Starmer said, addressing yet another hastily-arranged Downing Street press conference.   “My answer is clear. Whatever the challenges that lie ahead, this government will always support working people.”  He was announcing £53 million in state support for low-income families already hit by a sharp rise in the cost of heating oil, a fuel that warms around one in 20 U.K. homes.    But much bigger, much pricier policy choices are coming down the track.    STRAITENED FINANCES A regulated cap on energy costs is keeping a lid on most people’s household bills. But the current cap expires in July — at which point, without intervention, bills could jump significantly. Wholesale gas prices, which significantly influence household bills, have nearly doubled since the crisis began. Starmer’s Energy Secretary Ed Miliband told The Mirror newspaper he would “keep looking at how we can do more” to protect consumers. The government must decide how big they go with any support package.  But the Institute for Fiscal Studies think tank has already sounded the alarm over the government’s fiscal wiggle room. “The public finances are in a more strained position than they were [in 2022] at the start of the Russia-Ukraine war, and a sustained increase in energy prices is likely to worsen them further,” the think tank said last week. Starmer sought to contrast the situation now with that faced by Liz Truss’s Conservative government in 2022, and her multi-billion pound energy bailout.  The policy reduced the energy bills of every family in the country. It also, coupled with sweeping tax cuts, led sterling to crash, borrowing costs to soar, and forced Truss out of her job days later.  His Labour government, Starmer said, had “brought stability back to our public finances, stability that I will never put at risk.”  Now he faces the challenge of meeting that pledge on stability, while standing by his cost-of-living guarantee to the British people.   TO TARGET To help people most exposed to rising bills, while avoiding Truss’s fate, the obvious option for Starmer is to make a targeted intervention on energy bills come July.  The heating oil policy follows this approach, aimed squarely at “people who need it most,” Chancellor Rachel Reeves said Monday. The Treasury is similarly looking at “targeted options” for any future energy support package, she told The Times at the weekend.  Starmer himself said on Monday “we’re not ruling anything out.” But the signals are that a universal offer like Truss’s — which ended up costing an eye-watering £23 billion — is unlikely.   Among Labour MPs, the penny is already dropping that not all households will benefit from government largesse.   “It’s right that the government steps in at a time of national crisis and supports those that are struggling,” Suffolk Coastal MP Jenny Riddell-Carpenter told the BBC on Monday. “But it’s complex,” she added. “There isn’t a limitless pot of money.”   And targeting the right people for help will not be straightforward. In 2022, government lacked the data required to know which households should be targeted, Reeves told MPs on the Treasury committee last week.    Work on this inside government is now “more advanced,” she insisted. But officials still lack the targeting data needed, said Ben Westerman, director of policy at the energy campaign group Electrify Britain.    Officials simply “haven’t moved on” with targeting data since the last energy crisis, Westerman said, adding: “That is a failure of governments plural to learn the lessons from last time.”   Energy companies, pushing ministers over the issue, have grown frustrated.   “Industry has called for government to provide the data so that we can target support [to] those who need it. And there’s just been little to no progress on this,” Caitlin Berridge-Dunn, head of external affairs at energy supplier Utilita, said.  NEW AND OLD IDEAS  One option, separate from bills, would be to maintain a longstanding, five pence per liter tax relief on gasoline and diesel, a fuel duty cut which expires in September. The oil price shock has driven up costs at the pump by more than eight pence per liter for gasoline and more than 18 pence for diesel. Another approach officials could opt for, according to Westerman, and reported in The Times Monday, is to expand the existing Warm Homes Discount, a one-off payment to reduce bills for the poorest households, as a vehicle for getting more support to people who need it most.  But that approach, he cautioned, would not catch the “squeezed middle” of households.   Another option is to repeat a trick Starmer and Reeves pulled off at last year’s budget — shifting green and other levies currently added to energy bills into general taxation.   Miliband hailed that move at the time — which saved around £150 on the average energy bills — as a way of “asking some of the wealthiest in our society” to subsidize everyone’s bills.  There is enthusiasm for the principle in Whitehall, even if no decisions have yet been made. A government official, granted anonymity because they were not authorized to speak on the record, said the £150 cut could be “the beginning of a big principled move” of the burden of energy costs from consumers onto tax.     A study by the industry group the MCS Foundation found that moving all such levies onto taxation could cut bills by up to £410 a year. But that, of course, would put taxpayers on the hook. MCS Foundation estimated it would cost £5.7 billion per year. The most important difference from the Truss era, argued Sam Alvis, a former Labour adviser and now a director of energy security and environment at the influential IPPR think tank, is that Starmer cannot hang around.  The government should be planning any intervention now and not allow prices to rise in July, he argued, avoiding a repeat of the last Conservative government’s mis-step, when it waited until the fall to act.  “I think the public tolerance for [energy bill] increases will be a lot lower than it was in 2022, when Liz Truss waited from February to September to react,” Alvis said. “I just don’t think we’ll have that same time.” 

Listen on * Spotify * Apple Music * Amazon Music Energy markets are on edge as Iran tensions disrupt shipping and threaten supply shocks. EU foreign ministers and energy ministers meet in Brussels to discuss what the bloc can actually do to protect global energy flows — and whether it has the tools to act. Meanwhile, Norway is positioning itself as a reliable energy lifeline as the geopolitical turmoil puts security of supply back in focus. And the U.K.’s Brexit minister is in town as the EU asks Britain to lower the tuition fees it charges students from the bloc before Brussels and London can move forward with a “Brexit reset.” Zoya Sheftalovich and Kathryn Carlson break it all down. If you have questions for us, or want to share your thoughts on the show, you can reach us on our WhatsApp at +32 491 05 06 29.

Dr. Daniel Steiners This is not an obituary for Germany’s economic standing. It is an invitation to shift perspective: away from the language of crisis and toward a clearer view of our opportunities — and toward the confidence that we have more capacity to shape our future than the mood indicators might suggest. For years, Germany seemed to be traveling along a self-evident path of success: growth, prosperity, the title of export champion. But that framework is beginning to fray. Other countries are catching up. Parts of our industrial base appear vulnerable to the pressures of transformation. And global dependencies are turning into strategic vulnerabilities. In short, the German model of success is under strain. Yet a glance at Europe’s economic history suggests that moments like these can also contain enormous potential — if strategic thinking and decisive action come together. One example, which I find particularly striking, takes us back to 1900. At the time, André and Édouard Michelin were producing tires in a relatively small market, when the automobile itself was still a niche product. They could have focused simply on improving their product. Instead, they thought bigger; not in silos, but in systems. With the Michelin Guide, they created incentives and orientation for greater mobility: workshop directories, road maps, and recommendations for hotels and restaurants made travel more predictable and attractive. What began as a service booklet for motorists gradually evolved into an entire ecosystem — and eventually into a globally recognized benchmark for quality. > In times of change, those who recognize connections and are willing to shape > them strategically can transform uncertainty into lasting strength. What makes this example remarkable is that the real innovation did not lie in the tire itself or merely even a clever marketing idea to boost sales. It lay in something more fundamental: connected thinking and ecosystem thinking. The decision to see mobility as a broad space for value creation. It was the courage to break out of silos, to recognize strategic connections, to deepen value chains — and to help define the standards of an emerging market. That is precisely the lesson that remains relevant today, including for policymakers. In times of change, those who recognize connections and are willing to shape them strategically can transform uncertainty into lasting strength. Germany’s industrial health economy is still too often viewed in public debate in narrowly sectoral terms — primarily through the lens of health care provision and costs. Strategically, however, it has long been an industrial ecosystem that spans research, development, manufacturing, digital innovation, exports and highly skilled employment. Just as Michelin helped shape the ecosystem of mobility, Germany can think of health as a comprehensive domain of value creation. The industrial health economy: cost driver or engine of growth? Yes, medicines cost money. In 2024, Germany’s statutory health insurance system spent around €55 billion on pharmaceuticals. But much of that increase reflects medical progress and the need for appropriate care in an aging society with changing disease patterns. Innovative therapies benefit both patients and the health system. They can improve quality and length of life while shifting treatment from hospitals into outpatient care or even into patients’ homes. They raise efficiency in the system, reduce downstream costs and support workforce participation. > In short, the industrial health economy is not merely part of our health care > system. It is a key industry, underpinning economic strength, prosperity and > the financing of our social security systems. Despite public perception, pharmaceutical spending has remained remarkably stable for years, accounting for roughly 12 percent of total expenditures in the statutory health insurance system. That figure also includes generics — medicines that enter the ‘world heritage of pharmacy’ after patent protection expires and remain available at low cost. Truly innovative, patent-protected medicines account for only about seven percent of total spending. Against these costs stands an economic sector in which Germany continues to hold a leading international position. With around 1.1 million employees and value creation exceeding €190 billion, the industrial health economy is among the largest sectors of the German economy. Its high-tech products, bearing the Made in Germany label, are in demand worldwide and contribute significantly to Germany’s export surplus. In short, the industrial health economy is not merely part of our health care system. It is a key industry, underpinning economic strength, prosperity and the financing of our social security systems. Its overall balance is positive. The central question, therefore, is this: how can we unlock its untapped potential? And what would it mean for Germany if we fail to recognize these opportunities while economic and innovative capacity increasingly shifts elsewhere? Global dynamics leave little room for hesitation Governments around the world have long recognized the strategic importance of the industrial health economy — for health care, for economic growth and for national security. China is demonstrating remarkable speed in scaling and implementing biotechnology. The United States, meanwhile, illustrates how determined industrial policy can look in practice. Regulatory authorities are being modernized, approval procedures accelerated and bureaucratic barriers systematically reduced. At the same time, domestic production is being strategically strengthened. Speed and market size act as magnets for capital — especially in a sector where research is extraordinarily capital-intensive and requires long-term planning security. When innovation-friendly conditions and economic recognition of innovation meet a large, well-funded market, global shifts follow. Today roughly 50 percent of the global pharmaceutical market is located in the United States, about 23 percent in Europe — and only 4 to 5 percent in Germany. This distribution is no coincidence; it reflects differences in economic and regulatory environments. At the same time, political pressure is growing on countries that benefit from the American innovation engine without offering an equally attractive home market or recognizing the value of innovation in comparable ways. Discussions around a Most Favored Nation approach or other trade policy instruments are moving in precisely that direction — and they affect Europe and Germany directly. For Germany, the implications are clear. Those who want to attract investment must strengthen their competitiveness. Those who want to ensure reliable health care must appropriately reward new therapies. Otherwise, these global dynamics will inevitably affect both the economy and health care at home. Already today, roughly one in four medicines introduced in the United States between 2014 and 2023 is not available in Europe. The gap is even larger for gene and cell therapies. The primacy of industrial policy: from consensus to action — now Germany does not lack potential or substance. We still have a strong industrial base, a tradition of invention, outstanding universities and research institutions, and a private sector willing to invest. Political initiatives such as the coalition agreement, the High-Tech Agenda and plans for a future strategy in pharmaceuticals and medical technology provide important impulses, which I strongly welcome. > A fair market environment without artificial price caps or rigid guardrails is > the strongest magnet for private capital, long-term investment and a resilient > health system. But programs must now translate into a coherent action plan for growth. We need innovation-friendly and stable framework conditions that consider health care, economic strength and national security together — as a strategic ecosystem, not as separate silos. The value of medical innovation must also be recognized in Germany. A fair market environment without artificial price caps or rigid guardrails is the strongest magnet for private capital, long-term investment and a resilient health system. Faster approval procedures, consistent digitalization and a determined reduction of bureaucracy are essential if speed is once again to become a competitive advantage and a driver of innovation. Germany can reinvent itself, of that I am convinced. With courage, strategic determination and an ambitious push for innovation. The choice now lies with us: to set the right course and unlock the potential that is already there.

U.S. Energy Secretary Chris Wright on Friday took action to hit back at two of the Trump administration’s top antagonists: oil supply disruptions brought on by the war in Iran and California Governor Gavin Newsom. Wright issued an order paving the way for a company operating off the California coast to restart an oil pipeline that state officials have kept offline since 2015. The Energy Department framed it as a way to ease reliance on oil imports through the Strait of Hormuz, a key waterway for oil tanker traffic that the war has choked off. “Today, more than 60 percent of the oil refined in California comes from overseas, with a significant share traveling through the Strait of Hormuz — presenting serious national security threats,” the department wrote in its announcement. Wright said in a statement that the move would “strengthen America’s oil supply and restore a pipeline system vital to our national security and defense, ensuring that West Coast military installations have the reliable energy critical to military readiness.” Wright’s directive invoked the Defense Production Act, a 1950 law that gives the president broad powers over domestic industry in the interest of national defense. President Donald Trump signed an executive order earlier Friday that delegated some of his authority under the law to the energy secretary, opening the door to Wright’s move. Newsom was quick to push back against the Trump administration’s justification. “Donald Trump started a war, admitted it would spike gas prices nationwide, told Americans it was a small price to pay, and now he’s using this crisis of his own making to attempt what he’s wanted to do for years: open California’s coast for his oil industry friends so they can poison our beaches,” Newsom said in a statement. He called the attempt to restart the pipeline illegal and said that it “wouldn’t lower prices by a cent” due to the fact that oil prices are set on the global marketplace. In overriding California’s authority over a pipeline system that connects a trio of offshore platforms to the California coast, Wright is also bringing the full powers of the federal government to bear against California in an escalating conflict over whether oil producers should be allowed to expand drilling off the Golden State coast. The pipeline owner, Texas-based Sable Offshore Corp., appealed last year to Trump’s National Energy Dominance Council for help securing federal permits to transport its oil to market in a bid to get around state regulators, who had raised environmental concerns. Bringing Sable’s oil to market won’t come close to making up for the supply disruptions caused by the war in Iran, according to Ryan Cummings, chief of staff of the Stanford Institute for Economic Policy Research. While the nearby oil will provide a more profitable supply to Golden State refiners, “we shouldn’t expect that to really flow through to consumers in any meaningful way in California, and certainly not in the United States,” Cummings said. California Attorney General Rob Bonta has already sued the U.S. Transportation Department over its December move to assert jurisdiction over Sable’s pipelines. Wright’s order sets the stage for more legal clashes between California and the White House. “California will not stand by while the Trump administration attempts to sacrifice our coastal communities, our environment, and our $51 billion coastal economy,” Newsom said. “The Trump administration and Sable are defying multiple court orders, and we will see them back in court.” Wright’s directive is a lifeline for Sable, a company whose stock price had plummeted at the end of last year amid the barrage of regulatory setbacks. Its share value rose significantly after a Department of Justice opinion last week signaled that the company might benefit from a presidential intervention. Company representatives didn’t immediately respond to a request for comment. Sable’s pipeline system has been shut down since it was responsible for a major 2015 oil spill in Santa Barbara County, while owned by a different company. Sable purchased the three offshore platforms, the pipelines and an onshore processing facility in 2024 and has been working to restart the operation ever since. But the company has run afoul of state and local agencies in the process. The California Coastal Commission fined the company $18 million, accusing it of defying orders to stop work on its pipeline. California Attorney General Rob Bonta sued Sable in October alleging water discharge violations, and the Santa Barbara County District Attorney filed criminal charges against the company in September alleging environmental violations. In December, the U.S. Transportation Department’s Pipeline and Hazardous Materials Safety Administration wrested oversight of Sable’s pipelines from the California Fire Marshal and approved the company’s restart plan. California Attorney General Rob Bonta then sued the federal pipeline regulator, challenging the move in a case that remains ongoing. A California judge last month ruled that Sable still needed a waiver from the state fire marshal before restarting the pipeline, citing a federal consent decree in the wake of the 2015 spill.