Oil sanctions have given rise to dark shipping, reshaping global energy flows and producing far-reaching economic consequences.

---

In recent years, oil export sanctions have become a central tool of U.S. foreign policy, targeting major producers including Russia, Iran, and, until very recently Venezuela. These sanctions were designed to limit oil revenues, apply economic pressure, and create geopolitical leverage. But their real-world effects have proven more complex than many anticipated.

A growing “shadow fleet” of oil tankers now operates alongside the conventional global shipping system. These vessels, often older and operating with opaque ownership and shifting registrations, transport sanctioned oil through networks designed to evade restrictions. Despite extensive sanctions, large volumes of this oil continue to reach global markets.

In this episode, Penn economist Jesús Fernández-Villaverde examines how oil sanctions have contributed to the rise of dark shipping, and have become a lever in global great power competition. Drawing on new research funded by the Kleinman Center, he explains how shadow oil flows reshape global markets, influence prices and industrial activity, and generate unintended outcomes.

Jesús Fernández-Villaverde is a professor of economics and Director of the Penn Initiative for the Study of Markets at the University of Pennsylvania.

Related Content

Boomtowns in the Battery Belt: Risks and Opportunities of Clean Energy Investments in Smalls Towns of America https://kleinmanenergy.upenn.edu/research/publications/boomtowns-in-the-battery-belt-risks-and-opportunities-of-clean-energy-investments-in-small-towns-of-america/

Energy System Planning: New Models for Accelerating Decarbonization https://kleinmanenergy.upenn.edu/research/publications/energy-system-planning-new-models-for-accelerating-decarbonization/

Energy Policy Now is produced by The Kleinman Center for Energy Policy at the University of Pennsylvania. For all things energy policy, visit kleinmanenergy.upenn.edu.

See omnystudio.com/listener for privacy information.

The nation’s largest electric grid operator outlines its plan to manage rapid growth in data center electricity demand.

---

PJM Interconnection, the nation’s largest grid operator, is preparing to file a wide-ranging proposal with federal regulators aimed at managing the rapid growth of electricity demand, including AI-driven data centers. The plan stands out as one of the first comprehensive efforts by a grid operator to address surging load from new technologies while maintaining system reliability and limiting cost impacts on consumers.

The proposal arrives at a moment when the electric grid is under growing stress. Tightening power supply-demand balances, high-profile grid failures, and a series of narrowly avoided outages have raised concerns about whether the power system can continue to meet demand reliably. At the same time, those pressures have increasingly shown up in electricity prices, which have increased sharply in many areas.

PJM’s proposal tries to answer a question grid operators across the country are now facing: how to say “yes” to large new loads without turning reliability into a gamble or costs into an afterthought. The plan lays out a structured approach to integrating data centers and other large loads, with an eye toward keeping commitments realistic and aligning responsibility with impact.

Abe Silverman is an assistant research scholar with the Ralph O’Connor Sustainable Energy Institute at Johns Hopkins University and a former general counsel to the New Jersey Board of Public Utilities. Tom Rutigliano is senior advocate for climate and energy at the Natural Resources Defense Council, where his work focuses on PJM. Both participated in the policy discussions surrounding PJM’s proposal, and provide their perspective on its potential impacts on grid reliability, consumers, and the potential rate of datacenter growth.

Abe Silverman is an assistant research scholar with the Ralph O’Connor Sustainable Energy Institute at Johns Hopkins University and a former general counsel to the New Jersey Board of Public Utilities.

Tom Rutigliano is senior advocate for climate and energy at the Natural Resources Defense Council, where his work focuses on PJM.

Related Content

Communities Are at Risk If We Don’t Slow the Roll on Data Center Development https://kleinmanenergy.upenn.edu/commentary/blog/communities-are-at-risk-if-we-dont-slow-the-roll-on-data-center-development/

Energy System Planning: New Models for Accelerating Decarbonization https://kleinmanenergy.upenn.edu/research/publications/energy-system-planning-new-models-for-accelerating-decarbonization/

Energy Policy Now is produced by The Kleinman Center for Energy Policy at the University of Pennsylvania. For all things energy policy, visit kleinmanenergy.upenn.edu.

See omnystudio.com/listener for privacy information.

AI data centers are driving rapid demand growth, exposing the limits of traditional electricity forecasting and planning.

---

Electricity demand in the United States is rising fast, fueled in large part by the rapid expansion of AI data centers. Grid operators have repeatedly revised their demand forecasts upward as they try to anticipate how much new power these facilities, along with other emerging loads such as advanced manufacturing and crypto mining, will require.

In January, however, something unexpected happened. PJM Interconnection, the nation’s largest grid operator, lowered its demand growth outlook, just weeks after a capacity auction driven by expectations of booming demand produced record high prices.

Estimating how much electricity new data centers and other large loads will actually add to the grid is difficult, and the uncertainty cuts both ways. Overestimating demand can leave consumers paying for grid infrastructure that never gets fully used. Underestimating it can threaten reliability. All of this is playing out as the rapid buildout of data centers is increasingly framed as a question of economic competitiveness and national security.

On the podcast, Shana Ramirez and Arne Olson of Energy and Environmental Economics argue that while improving forecast accuracy remains important, uncertainty itself needs to play a more central role in how the grid is planned and governed. In a recent E3 paper, they lay out why demand forecasts will remain imperfect, and why grid rules and planning processes should be designed to work across a range of possible outcomes rather than relying on a single view of the future.

Ramirez and Olson discuss the reliability and cost challenges this uncertainty creates and describe governance approaches that could help the power system remain reliable and affordable as new loads come online.

Shana Ramirez is director, asset valuation and markets at E3.

Arne Olson is a senior partner at E3.

Related Content:

Boomtowns in the Battery Belt: Risks and Opportunities of Clean Energy Investments in Small Towns of America https://kleinmanenergy.upenn.edu/research/publications/boomtowns-in-the-battery-belt-risks-and-opportunities-of-clean-energy-investments-in-small-towns-of-america/

Energy System Planning: New Models for Accelerating Decarbonization https://kleinmanenergy.upenn.edu/research/publications/energy-system-planning-new-models-for-accelerating-decarbonization/

Energy Policy Now is produced by The Kleinman Center for Energy Policy at the University of Pennsylvania. For all things energy policy, visit kleinmanenergy.upenn.edu.

See omnystudio.com/listener for privacy information.