Shares of Sable Offshore (NYSE:SOC) jumped roughly 16% and were halted under a circuit breaker after a report said President Donald Trump intends to invoke Cold War-era powers to enable renewed oil production off southern California.
According to the report, the White House plans to rely on authorities granted by the Defense Production Act to preempt state laws and expedite permitting for the Houston-based company. The company is seeking to restart production from a group of offshore platforms located in California.
The plan was described to reporters by a person familiar with the matter who asked not to be named because the details were not yet public. That same account said the planned order is being considered as a response to political pressure on the administration to tackle rising fuel prices ahead of the November midterm elections.
Officials portrayed the move as an attempt to help ease a global crude supply crunch the report linked to the administration's conflict with Iran. If executed, the order would represent a notable shift in federal intervention to clear the way for resumed offshore production in a state that has restrictive oil production policies.
Sable Offshore is pursuing a restart of substantial production from a cluster of California offshore platforms. The reported use of the Defense Production Act would be aimed at preempting state-level restrictions and speeding the permitting process for the company.
At this stage the plan remains at the reported stage, with the source asking not to be identified because the matter had not been publicly disclosed at the time of the report. The trading halt followed the market reaction to the report that federal authorities might intervene to enable renewed output off the California coast.
Impacted sectors: energy producers, oilfield services, regional refining and fuel distribution networks.