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TOKYO, May 22 (Reuters) – U.S. crude futures rose more than $1 in early trade on Friday as investors doubted the prospects of a breakthrough in U.S.-Iran peace talks, with the two countries stuck in opposing stances over Tehran’s uranium stockpile and controls on the Strait of Hormuz.

A senior Iranian source told Reuters no deal has been reached with the U.S. but the gaps have been narrowed, while U.S. Secretary of State Marco Rubio said there had been “some good signs” in talks but any toll system in the strait would be unacceptable.

U.S. West Texas Intermediate (WTI) crude futures climbed as high as $98.00 a barrel and last traded up $1.20, or 1.3%, at $97.55 as of 2228 GMT. They fell about 2% on Thursday, closing at their lowest in nearly two weeks.

The benchmark was still headed for a weekly loss of over 7%.

(Reporting by Yuka Obayashi; Editing by Nia Williams)

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SACRAMENTO, Calif. (AP) — California Gov. Gavin Newsom is in a spat with a major oil company over who is to blame for the state’s high gas prices, with the Democratic governor’s office urging drivers not to fill up at Chevron stations over Memorial Day weekend.

“Pro tip: unbranded gas comes from the same refineries, storage tanks, and pipelines, and it meets the same state standards to keep your engine running clean,” Newsom’s office posted Thursday on X. “Big Oil is already making billions off Trump’s Iran War; don’t let them rip you off even more by overpaying for the brand name.”

Newsom’s office cited an analysis by a group within the state’s energy commission, which oversees the oil and gas industry, that found that Chevron averaged more than 60 to 80 cents per gallon above unbranded alternatives.

Memorial Day weekend is one of the busiest travel times of the year. The call-out by the governor’s office follows Chevron posting signs at California gas stations blaming the state’s climate policies for the high cost of gas. The average price of gas in California sat at $6.14 per gallon on Thursday, about $1.58 higher than the national average, according to the American Automobile Association. The state taxes consumers about 70 cents per gallon of gas, according to the state’s energy commission. That is the highest gas tax in the country.

“California politicians are choosing foreign oil and fuels over local jobs and lower costs,” the signs read. They feature a QR code that directs to a Chevron webpage asking people to “speak up for affordable, reliable energy.”

It is not clear when Chevron put the signs up, but spokesman Ross Allen said they are part of a campaign the company launched three years ago to inform drivers on the price impacts of California policies.

“We’ve been very vocal about the importance of customer education in California so that our drivers and our consumers understand where their tax dollars are going,” Allen said.

There are hundreds of Chevron gas stations operating in California, and most of them are operated independently and set their own prices, he said.

Chevron has also become a point of contention in the governor’s race, with billionaire climate activist Tom Steyer criticizing former federal health secretary Xavier Becerra for accepting campaign contributions from the company. Steyer and Becerra are both Democrats.

Prices at the pump have swelled nationwide since the Iran war began, launching a global energy crisis. The price of crude oil, which is the main ingredient in gasoline, has climbed during the war because the Strait of Hormuz, the narrow passage of the Persian Gulf through which a fifth of the world’s crude oil normally passes, has effectively been shut. Oil tankers have been stranded there unable to deliver crude.

Newsom, who often touts the state’s status as a global climate leader, has passed policies in recent years aimed at cracking down on oil company profits and reducing gas prices.

He signed a law in 2023 allowing the state’s energy commission to penalize oil companies for excess profits, declaring the state had “finally beat big oil.” But regulators voted last year to hold off on plans to penalize businesses until 2030 and prioritize other efforts to protect consumers at the pump.

The postponement came after two oil refineries that accounted for roughly 18% of the state’s refining capacity announced their plans to close, reigniting debate over the price impacts of the state’s ambitious climate policies.

Newsom signed another law in 2024 giving the commission the authority to require refineries to keep a certain amount of fuel on hand. The goal is to try to keep prices from increasing suddenly when refineries go offline for maintenance. But that regulation has also stalled.

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By Leika Kihara

TOKYO, May 22 (Reuters) – Japan’s annual core inflation slowed to a four-year low in April due to the effect of subsidies on fuel and education, data showed on Friday, though analysts expect surging fuel costs from the Middle East war to accelerate price growth in coming months.

While government measures are offsetting some of the price pressure from the energy shock, Bank of Japan policymakers are dropping hawkish comments signalling the chance of an interest rate hike in June as they focus on broadening inflation risks.

Japan’s core consumer price index (CPI), which strips away the effect of volatile fresh food costs, rose 1.4% in April from a year earlier, much slower than a 1.8% rise in March and falling short of the median market forecast for a 1.7% gain.

The increase was the slowest since March 2022, with a 10.6% drop in education fees weighing on service-sector inflation and offsetting steady increases in a range of other items including food, the data showed.

A separate index excluding the effect of volatile fresh food and fuel, which is closely watched by the BOJ as a better gauge of demand-driven price moves, rose 1.9% in April from a year earlier after a 2.4% gain in March.

“Although inflationary pressures eased in April, they will pick up again before long. Accordingly, we still think the Bank of Japan is likely to resume its tightening cycle sooner rather than later,” said Abhijit Surya, senior APAC economist at Capital Economics.

The data is among factors the BOJ will scrutinise at next month’s policy meeting, where the board is widely expected to raise its short-term policy rate to 1% from 0.75%.

Markets have been rattled after the Iran war effectively shut the Strait of Hormuz, a chokepoint for about a fifth of global oil and gas flows, driving up crude oil prices and the safe-haven dollar against the yen.

The war has complicated the BOJ’s rate-hike plan by adding to inflationary pressure, while weighing on an economy heavily reliant on fuel imports from the Middle East.

Wholesale inflation, a leading indicator of consumer prices, accelerated in April at the fastest pace in three years as the Iran war boosted oil and chemical goods prices, bolstering the case for a near-term rate hike.

BOJ board member Junko Koeda said on Thursday she was scrutinising the speed and magnitude of the pass-through from wholesale to consumer inflation, in gauging the pace and timing of future rate hikes.

“I believe it’s reasonable to raise the policy interest rate at an appropriate pace to address high inflation while also considering the trade-offs for the economy,” Koeda said, warning that the energy shock could push underlying inflation above the central bank’s 2% target.

BOJ Governor Kazuo Ueda is likely to deliver a speech on June 3, which will be scrutinised for any hints on whether the central bank would indeed hike rates at the June 15-16 policy meeting.

(Reporting by Leika Kihara; Editing by Sam Holmes and Kim Coghill)

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By Kalea Hall

DETROIT, May 21 (Reuters) – United Auto Workers leaders called for stronger pay standards and mandates that carmakers build where they sell, ahead of Washington’s upcoming talks on a new trade deal with Canada and Mexico.

UAW President Shawn Fain and others detailed the union’s hopes for the new pact during a Thursday presentation to media.

Formal negotiations over changes to the U.S.-Mexico-Canada Agreement are expected to start between the U.S. and Mexico next week.

• The Detroit labor group said that if pro-worker trade demands aren’t met, the U.S. government should pull out of a trade deal with the countries.

• “There’s no future for the working class that doesn’t address the free trade disaster,” Fain said during the media webinar while wearing a “Kill NAFTA” T-shirt, referring to the previous free trade deal between the three countries.

• The union recommends the expansion and enforcement of Mexico’s labor laws, raising wages in Mexico and increasing health and safety standards.

•  The UAW has long viewed free trade deals as an attack on blue-collar work in America because companies have shifted jobs to lower-cost regions over the past several decades.

• A revised USMCA could include higher U.S. content requirements for vehicles crossing the border duty-free. Those rule changes could lead to high costs, more complexity, and place limits on market access, a recent report by Boston Consulting Group noted, specifically stating the repeal could add $33 billion in tariff-related costs.

• Auto trade groups this month urged President Donald Trump’s administration to extend the current deal. The countries have a July 1 review deadline for USMCA.

(Reporting by Kalea Hall; Editing by Mike Colias in Detroit and David Gregorio)

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By Raphael Satter and Alexandra Alper

WASHINGTON, May 21 (Reuters) – SpaceX’s initial public offering is set to be the largest in history, partly fueled by its promise to grab a chunk of what it calls a multi-trillion-dollar market for artificial intelligence services through its AI startup, xAI.

But xAI’s Grok chatbot has been a flop with one of the world’s largest customers – the U.S. government, according to seven federal employees, three contracting experts and a Reuters review of government AI inventory documents.

The 2025 consolidated inventory records from federal agencies show more than 400 publicly identified examples of AI use in government that name a specific vendor. Of them, only three involve the use of xAI or Grok. By contrast, 234 examples involved technology based on OpenAI’s models, including ChatGPT, Codex, and Microsoft Copilot; 33 involved Gemini or other Alphabet products; and 26 involved Anthropic’s Claude, which has since been blacklisted by the Trump administration.

  The Office of Management and Budget (OMB), which collated the records, did not respond to requests for comment. xAI did not respond to detailed questions from Reuters about Grok’s use in government. Most of the other AI companies, which like Grok have been available to federal agencies through the General Services Administration (GSA), did not respond to requests for comment on the data. Google declined comment and referred Reuters to blog posts highlighting its government work.

Grok has been available to federal agencies for eight months at a cost of 42 cents per agency. That near-zero pricing, which is also used by xAI’s competitors, is a typical strategy tech giants use to entice government agencies into using their products so they can lock them into higher-priced contracts later. 

“The goal is to encourage adoption so that federal employees eventually can’t imagine doing their jobs without generative AI,” said Valerie Wirtschafter, a researcher at the Brookings Institution who studies AI adoption in the federal government.

The OMB data raise questions about whether Grok can take AI market share from leaders including Claude or ChatGPT and help justify SpaceX’s ambitious $1.75 trillion IPO valuation. In a recent regulatory filing, SpaceX said it expects to make far more money building AI for large companies and other big organizations – a total market opportunity it values at $26.5 trillion – than from any of its other businesses.

The U.S. government’s lack of enthusiasm for Grok is a “canary in the coal mine,” casting doubt on SpaceX’s soaring ambitions for broad adoption, said Vineet Jain, co-founder and CEO of Egnyte, which makes AI-powered software for enterprise companies. 

“It suggests the model lacks the security rigor required at the federal level, which will be a red flag” for some corporate buyers, Jain said. “Without government validation, the $1.75 trillion valuation looks less like a floor and more like a high ceiling.”

SpaceX chief executive Elon Musk has publicly touted Grok’s potential for federal work and lobbied for its widespread adoption. In a September announcement of Grok’s deal with the GSA, he said his team wanted to work with President Donald Trump to “rapidly deploy AI throughout the government for the benefit of the country.” 

Musk’s Department of Government Efficiency (DOGE) actively promoted Grok. The now-defunct entity told Department of Homeland Security officials to use Grok, for example, even though it had not been approved for use at the sprawling agency, Reuters reported at the time.

GOVERNMENT GROK USAGE

The AI inventory data collected by OMB provides a window into how federal agencies deploy the technology. The data typically describe how the tools are used and how many employees use them. Some of the uses are mundane, like categorizing incoming emails or transcribing meetings. Other more sophisticated uses involve detecting fraud or space research. National security-related use cases are typically omitted.

The data has some inconsistencies. In many cases, the specific AI service used was left blank on forms. Wirtschafter, the Brookings researcher, cautioned that there were variances about what was defined as an AI use case at some agencies. Still, she said, the database was the “most comprehensive non-military, non-intelligence inventory of AI use cases we have.”

At the Office of Personnel Management and the Department of Health and Human Services, the chatbot was being used for low-level tasks such as generating first drafts of documents or posting to social media, the data showed. HHS didn’t return messages about its AI use. A spokesperson for OPM said Microsoft Copilot is the AI tool most commonly used at the agency.

A second part of the AI inventory focused on more ambitious applications, which are used by fewer people, also shows little trace of Grok. The only three references to Grok in that data showed that Grok had been deployed “in a limited test or pilot capacity” at the Energy Department’s Lawrence Livermore National Laboratory and the Election Assistance Commission. By contrast, OpenAI and Microsoft together accounted for 140 use cases.

The Energy Department didn’t return messages. The EAC said in a statement that its evaluation was “ongoing.”

The inventory data excludes the Pentagon, which has a $200 million deal with xAI. Earlier this year, Defense Secretary Pete Hegseth announced the addition of Grok to GenAI.mil, the military’s unclassified hub for the use of AI models. In May, xAI became one of seven companies to deploy on the Defense Department’s classified networks.

One Pentagon source with direct knowledge of the matter said many staffers preferred competitors’ AI tools over Grok.

At the Defense Advanced Research Projects Agency (DARPA), the Pentagon’s research and development arm, Google’s Gemini is used for engineering analysis, while Anthropic’s Claude is preferred for coding, writing and research, the source said. OpenAI was also used, the person said, but Grok was generally not. 

Claude or Gemini are used within the more sophisticated engineering circles at DARPA, the person added, in part because Grok is “just not the best model out there,” he said.

The Pentagon and DARPA did not respond to requests for comment.

SIGN OF WEAKNESS WITH CORPORATE CUSTOMERS?

SpaceX is still fighting to make inroads. The company’s AI subsidiary, xAI, recently began pursuing FedRAMP High Authorization – a kind of seal of approval for sensitive government work  – with the help of the U.S. Department of Agriculture.

But three USDA information-technology professionals said they were not aware of Grok being used. The USDA said it was “proud to sponsor Grok” but didn’t respond to a question about how often the chatbot was used.

Last month, xAI lost a bid to build a Grok-powered product for the Department of Veterans Affairs, according to a person familiar with the matter. The person said the chatbot hadn’t met the department’s requirements.

Veterans Affairs didn’t directly address questions about its Grok use. 

The low usage within the federal government echoes data that points to Grok failing to break into the business world more broadly.

In a report published last year, the web traffic monitoring firm Netskope – which tracks how its thousands of corporate customers connect to AI models – said that Grok had “failed to gain significant traction” in corporate environments. Updated figures that Netskope provided to Reuters showed that Grok enterprise usage had fallen even further, to 2 out of every 1,000 users down from a peak of 5 out of every 1,000 users. Netskope executive Ray Canzanese said that even the employees that used Grok spent less time with the chatbot than its competitors – less than half the time that ChatGPT users spent with OpenAI’s model, for example.

Canzanese said the Grok usage data told him the chatbot “is just not going to enter the mainstream for corporate America.”

(Reporting by Raphael Satter, Alexandra Alper, Mike Stone and David Jeans; Additional Reporting by Echo Wang; Editing by Chris Sanders, Brian Thevenot and Anna Driver)

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FRANKFURT, Germany (AP) — The European Union’s executive commission cut its growth outlook and predicted higher inflation due to sharply higher energy prices from the war in Iran — but said the economy will avoid an outright recession.

“As a net energy importer, the EU’s economy is highly susceptible to the energy shock caused by the conflict in the Middle East,” the commission said in a statement Thursday. The rising cost of fuel “means higher household bills and surging business costs that reduce profits for many industries.”

The commission’s spring forecast lowered the outlook for growth in the 21 countries that use the euro to 0.9% for this year, from 1.2% in its autumn forecast, and to 1.2% from 1.4% for 2027. Inflation is now expected to reach 3.0% for 2026, up from the earlier forecast of 1.9%.

The new inflation figure exceeds the inflation goal of 2% set by the European Central Bank, and higher inflation expectations have led to predictions the ECB will raise its interest rate benchmarks this year to combat inflation.

Oil prices rose sharply after risk of Iranian drone and speedboat attacks closed off most ship traffic through the Strait of Hormuz, the sea passage for about a fifth of the world’s oil and natural gas. On top of that, news of the war has shaken consumer confidence, which fell to a 40-month low amid mounting fears of job losses and higher inflation.

Still, the commission said the economy will continue to show modest growth and avoid an outright recession.

It warned however that a downside scenario of a prolonged period of higher energy prices would push growth lower and inflation higher.

The new inflation figure exceeds the inflation goal of 2% set by the European Central Bank, and higher inflation expectations have led to predictions the ECB will raise its interest rate benchmarks this year to combat inflation.

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KYIV, Ukraine (AP) — Ukrainian drones smashed into another Russian refinery overnight, starting a fire that produced huge clouds of black smoke, President Volodymyr Zelenskyy said Thursday, in what appeared to be the latest long-range attack on Moscow’s vital oil industry.

The drones targeted the Syzran oil refinery, located more than 800 kilometers (500 miles) inside Russia, Zelenskyy said on social media, where he posted a video of the aftermath.

It was not possible to verify the video or independently confirm the attack. The governor of Russia’s Samara region, Vyacheslav Fedorishchev, said that two people were killed by Ukrainian drones in Syzran but he didn’t mention the refinery. Russia’s Astra news outlet said that Ukrainian drones struck the Syzran refinery owned by oil and gas giant Rosneft.

Ukraine has expanded its mid- and long-range strike capabilities, deploying eye-catching drone and missile technology that it has developed domestically as it battles to defeat Russia’s 4-year-old invasion. Ukrainian weaponry and expertise are now sought by other countries, whereas earlier in the war Kyiv had to plead for massive foreign military aid.

Ukrainian drones hit another refinery the previous day, Zelenskyy said, as attacks on Russian oil assets that play a key part in funding the invasion have become almost daily occurrences.

“Overall, our long-range plan for May is being carried out largely in full,” Zelenskyy said in a social media post late Wednesday. “The key targets are Russian oil refineries, storage facilities, and other infrastructure tied to these oil revenues.”

The escalating attacks have hurt Moscow’s revenue at the same time as it feels the economic pinch of international sanctions. With some attacks reaching more than 1,500 kilometers (900 miles) into Russian soil, the strikes have contributed to some Russians feeling unsafe due to the war and heaped pressure on Russian President Vladimir Putin.

Ukraine’s new reach has also helped it push Russian troops back along parts of the front line, with Ukrainian forces making their most significant battlefield gains since 2024, according to the Institute for the Study of War.

“Ukraine’s intensified midrange strike campaign against Russian logistics, military equipment, and manpower since early 2026 has also degraded Russian forces’ ability to conduct offensive operations across the theater and has also likely supported recent Ukrainian advances,” the Washington-based think tank said in an assessment late Wednesday.

Ukraine has slowed Russia’s battlefield advance and is gradually regaining the initiative along the front line, Defense Minister Mykhailo Fedorov said, partly due to Russian forces being denied access to Starlink satellite services to steer its drones toward targets.

“Russia has since not been able to find a full replacement (for Starlink), giving Ukraine a critical battlefield advantage,” Fedorov told reporters. He spoke on Saturday but his comments were embargoed till Thursday.

Fedorov said in February he had asked Elon Musk’s SpaceX to help deny Russia use of the service in Ukraine. Starlink is a global internet network that relies on around 10,000 satellites orbiting Earth.

Fedorov said that mid-size drones have become a key technological advantage for Ukraine on the front line and claimed that Ukrainian forces have doubled their interception rate of Russian drones over the past four months.

Ukraine is also preparing changes to the military, covering pay and contract terms, he said.

Russia’s Defense Ministry said that air defenses downed 121 Ukrainian drones between late Wednesday and early Thursday.

In the Belgorod region that borders Ukraine, eight people were injured by Ukrainian drones, according to the regional governor, Alexander Shuvayev.

Russia has also invested heavily in drones, using them to bombard civilian areas of Ukraine throughout the war and killing more than 15,000 civilians, according to the United Nations.

Ukraine’s air force said Thursday it shot down 109 out of 116 drones that Russia launched overnight.

One civilian was killed and at least six others were wounded in the strikes in the north, south and east of the country, emergency services said.

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Hatton reported from Lisbon, Portugal. Associated Press writer Samya Kullab in Kyiv, Ukraine, contributed to this report.

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Follow the AP’s coverage of the war in Ukraine at https://apnews.com/hub/russia-ukraine

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WASHINGTON (AP) — In the year since President Donald Trump signed an executive order promising to create a deep-sea mining industry from scratch, businesses have raised millions of dollars from investors, stock prices have soared and federal regulators have raced to fast-track a permitting process.

At least nine companies are in talks with the government for access to seabed minerals, according to an Associated Press review. Sections of the seafloor from American Samoa to Alaska could be auctioned for offshore mining this summer and through the fall.

All the action suggests the U.S. may soon give the green light for companies to commercially mine the seabed — something that’s never been done in international waters.

But a close look at some of the companies involved reveals uncertain track records and histories spattered with legal disputes, while major questions about how the minerals would be processed and refined remain unanswered. Watchers of the nascent industry are skeptical the promised riches will ever materialize.

“It just feels right to people thinking that there is a cornucopia of metals on the bottom of the seafloor that are just there to be plucked up like seashells on the seashore,” said Victor Vescovo, a private equity investor and deep-sea explorer who has chosen not to back any deep-sea mining companies.

“If there’s more scrutiny on their actual financial models,” he added, “you would go, ‘Wait a second, this is much more uncertain.’”

Trump’s executive order in April last year marked a sudden embrace of an industry long dormant in the U.S. The president hailed seafloor minerals as vital to America’s future prosperity and its trade independence from China. He directed U.S. agencies to expedite permitting.

The most widely prized ores are fist-shaped rocks known as polymetallic nodules, formed over millions of years from the remains of sunken shark teeth and shells. They contain high grades of manganese, copper, nickel and cobalt, and some rare earth elements.

Other parts of the seafloor have drawn prospectors, too: the mineral-rich crusts atop volcanic seamounts, and the rocky mounds flecked with gold and silver near hydrothermal vents. Nearer to shore, companies have proposed dredging ocean sands for titanium, zirconium and phosphorites. But for many companies, seafloor nodules hold the most allure.

Trillions of nodules lie on the international seabed between Mexico and Hawaii, scientists say. For more than a decade, delegates from dozens of countries have convened at the headquarters of the International Seabed Authority in Jamaica with the difficult task of creating globally agreed upon mining rules for those areas, which belong to no single country.

The agency has so far granted exploration rights to nearly two dozen contractors, but has not allowed any to mine commercially. Under its mandate, the minerals are designated for the shared benefit of “all humankind.”

Trump’s order suggests the U.S. will decide for itself when to mine the global seabed, reversing the decision of previous administrations to honor the seabed authority’s rules.

In a statement, a White House spokesperson said “all presidential actions are legally sound.”

Geologists have known about polymetallic nodules for more than a century, but it wasn’t until the 1960s that companies started building technology to haul them to the surface.

At the time, the laws of the sea were still in the making, with ongoing talks at the United Nations over how countries would use and protect the oceans beyond their borders. When it came to seabed mining, the U.S. was at odds with much of the world over how the resources and technology should be shared.

In 1980, with global talks still in progress, Congress passed the Deep Seabed Hard Mineral Resources Act and created a process for U.S. companies to mine the deep sea. The U.S. issued four exploration licenses in 1984.

Yet in the decades that followed, low metals prices and the brewing uncertainty around international rules pushed several of those companies to forfeit their licenses or dissolve. Today, more than 150 countries agree that deep-sea mining should be mutually governed by the seabed authority. Lockheed Martin holds the only two exploration licenses still active in the U.S.

Two U.S. agencies will enforce rules: the National Oceanic and Atmospheric Administration, which oversees minerals beyond U.S. borders, and the Bureau of Ocean Energy Management, a division of the Department of the Interior that regulates offshore oil, gas, wind and minerals in U.S. waters.

NOAA has never approved a commercial project for seabed mining; nor has BOEM, beyond a short-lived mining effort in California waters more than 60 years ago. But their leaders, appointed by Trump, are pushing for that to change.

In June, Interior Secretary Doug Burgum announced a mandate for BOEM to “speed up” the development of critical minerals offshore, and outlined steps to streamline the regulatory process. The agency soon announced it was evaluating seabed mining in the waters of Alaska, Virginia, American Samoa and the Northern Mariana Islands. It plans to hold the first lease sale as early as August, according to a budget proposal, and in the coming months will restructure under the new name of the Marine Minerals Administration.

NOAA, too, is working quickly to approve permits. Until this year, the agency required companies to have an exploration license before they could pursue commercial operations; in January, it said companies could apply for both activities at once. NOAA has requested funds to expand its permitting staff and set a target of processing 16 applications next fiscal year.

So far, the companies answering the call of Trump’s executive order include a firm that once made its money hunting for sunken treasure, and a South Carolina-based startup that sprung from an effort to find Amelia Earhart’s long-lost plane.

And it includes The Metals Company, long seen as the front-runner in the industry. If the U.S. grants a permit, the firm says it is ready to commercially mine the seafloor before the end of next year. It is one of few companies to have tested equipment in deep-water conditions — hauling up 3,000 metric tons of nodules in a 2022 trial.

The company has close ties to the Trump administration. CEO Gerard Barron says he was in the White House on the day Trump signed the executive order, and since then, he’s been invited to speak at three congressional hearings on deep-sea mining. The Metals Company has received financial advice from Cantor Fitzgerald, the investment group Commerce Secretary Howard Lutnick led for decades until Trump appointed him to federal office. Lutnick is now in charge of NOAA and could be influential in the final decision on permits.

In a January congressional hearing, U.S. Rep. Ed Case, a Hawaii Democrat, accused The Metals Company of being “in bed” with NOAA and having advance knowledge of the agency’s plans, citing the close timing of certain events. The Metals Company submitted its seabed mining applications within a week of the executive order last year, and resubmitted them under the streamlined regulations one day after NOAA finalized the new rules.

At the hearing, Barron denied the accusation, saying it’s the company’s job to respond to and anticipate government action. “We had lobbied hard” against some of the regulatory inefficiencies, he added.

Since 2024, records show the company spent nearly $800,000 on lobbying for seabed mining issues, including permitting. Its stock price hit record highs across the last year.

A spokesperson for The Metals Company said in a statement the firm had no unfair advantages, and is well-poised to address the strategic priorities of the U.S. after 15 years of preparation and testing.

Barron got his start in deep-sea mining as an investor of a company, Nautilus Minerals, which won a license from Papua New Guinea for the world’s first commercial seabed mining effort in 2011. But Nautilus folded before mining began, leaving the government, which had a 15% stake in the project, with more than $100 million in debt.

Tampa, Fla.-based Odyssey Marine Exploration has also signaled interest in offshore mining. Odyssey formed in the 1990s with a mission to discover sunken treasure and sell the artifacts for profit. The company claims to have found more shipwrecks than any other organization in the world.

But Odyssey ran into trouble in 2007, when it discovered an underwater shipwreck littered with silver and gold coins that Odyssey brought to the U.S. Later, the government of Spain said the wreck matched descriptions of a Spanish naval ship sunk by the British in 1804. Warships are immune to the claims of salvagers. Odyssey argued the remains couldn’t reliably be identified, but after years of bitter court battles, relinquished the treasure.

Amid the legal fight, the company pivoted to pursuing seafloor minerals.

There, too, Odyssey ran into controversy. The company’s subsidiary was awarded mining permits in Mexico’s Gulf of Ulloa for a project that would have dredged 7 million tons of mineral sands per year, operating 24 hours per day, according to Odyssey’s proposal, with a goal of extracting phosphate for fertilizer.

But the Mexican government withdrew its support during its environmental review out of concern the mining would disturb marine habitats and threaten loggerhead turtles. Officials later argued Odyssey didn’t have enough mining experience.

The company sued the government of Mexico for damages, winning $37 million in 2024, more than 10 years after it received the first mining permit.

In December, BOEM announced that Odyssey had requested the agency begin the regulatory process to consider mining off the coast of Virginia. As in Mexico, the company is hoping to dredge coastal sands.

In a statement, an Odyssey spokesperson said the company carefully selected the area to avoid sensitive marine habitats and shipping traffic, and that dredging is an established tool for construction projects and can be done safely.

This spring, the company said it will merge with and adopt the name of American Ocean Minerals Corporation, which incorporated last year and has applied for NOAA’s permission to explore for seafloor nodules.

Out in the U.S. territories of the Pacific Ocean, another fight is brewing over potential mining. The startup Impossible Metals has set its sights on seafloor nodules in U.S. waters near American Samoa and the Northern Mariana Islands, despite growing outcry from local residents and leaders.

American Samoa has banned deep-sea mining in local waters, while a similar push is underway in the Northern Marianas. Nearby Guam has banned deep-sea mining, too. Republican House representatives from all three territories worry their constituents will bear the environmental and economic harms. But the final decision is in the hands of the federal government, which controls U.S. waters beyond 3 miles from shore.

Impossible Metals boasts of being the most environmentally friendly deep-sea mining company. Most mining machines are built to drive along the seafloor, endangering the sea sponges, nematodes and brittle stars that live among nodules. Impossible Metals is building a fleet of robots that it says will float above the seabed and collect only rocks that don’t contain marine life. The company has offered island territories 1% of future profits.

Critics question whether the technology will work, and if there will in fact be any profits to share.

Impossible Metals didn’t respond to the AP’s questions or requests for comment. The company has said previously that it’s engaging with local communities and is committed to building something lasting.

Still other companies are lining up for U.S. permission. American Metal Resources and SeaX, both formed last year, applied for exploration licenses that are under NOAA review.

Deep Sea Minerals Corp., founded in 2022, is publicly traded in Canada and announced its application to explore for nodules in March. The company recently issued a press release saying its advertisements may have “overstated” the certainty of its future growth. It does not yet have deep-sea mining rights or any specialized marine technology, it said.

There are some early signs of discord: American Metal Resources and The Metals Company have both sued each other, alleging the misuse of confidential information.

Deep-sea ecologists and ocean advocates have fought against seabed mining for years on the grounds that the deep ocean remains vastly under-studied, and that mining could extinguish its fragile life.

But a number of analysts and investors also question its economic merit.

Of the four metals contained in polymetallic nodules, copper is the surest bet to see sustained demand given the booming need for electrical wiring.

But mineral forecasts, said mining consultant Lyle Trytten, “often get a lot of attention when they’re very high, and then things change.”

Five years ago, The Metals Company built its marketing on the surging demand for metals to build electric vehicle batteries. Forecasters projected global shortages and prices soared.

In the years since, battery design has evolved and no longer depends as much on cobalt and nickel, leaving seabed mining companies with a more subdued outlook on profits. Even highly-sought copper is already being replaced in some industry sectors with aluminum.

Ian Lange, a professor of mineral economics at the Colorado School of Mines, said deep-sea mining advocates seem to overlook the more affordable and widely available sources of minerals on land. He questioned whether demand is strong enough: Copper mines in Michigan and Wyoming are fully permitted but inactive; a cobalt mine is idled in Idaho.

“I personally am skeptical that what’s holding people back (from deep-sea mining) is nonmarket things like permitting,” he said.

The Securities and Exchange Commission requires publicly listed mining companies to assess the economic viability of their projects in a document known as a pre-feasibility study.

The Metals Company did so last year, and forecast that it would break even in its eighth year of commercial seabed mining – the same year that it forecast the mineral reserves to be “all mined.”

“No one goes into a project saying, ‘In the best-case scenario, we’ll break even,’” said mining consultant Steven Emerman. “Anyone at my level would know to come to the conclusion that now is the time to abandon the project.”

Unless the project expands, said Simon Jowitt, Nevada’s state geologist and director of the Nevada Bureau of Mines and Geology, “there’s not going to be any profit in the project.”

The Metals Company says it expects to find billions of dollars’ worth of seabed minerals after the project breaks even. But it has yet to prove those additional resources are economical to mine.

Forecasting this way is unusual, Jowitt said.

Other experts, including Trytten and Emerman, said the company’s forecast is overly optimistic, projecting high metals prices and low costs. Trytten reviewed the forecasts at the request of an environmental group, the National Ocean Protection Coalition, and Emerman at the request of opponents to deep sea mining, including Greenpeace. Both said their analysis was independent.

The Metals Company said it had completed mining plans and seafloor surveys for the first eight years of the project, and that the costs of surveying, sampling and analyzing additional seafloor minerals were best incurred once the project was underway. The company is confident those resources will be minable, a spokesperson said.

It would take at least three land-based mines to produce the four minerals that exist in seafloor nodules, the company said, and this variety makes the project resilient to economic headwinds or changing demand for metals.

Deep-sea mining companies will also face challenges around where to process the nodules. Despite Trump’s focus on trade independence, the U.S. currently has no major processing facilities for nickel, manganese or cobalt.

Building these facilities on U.S. soil will take time and money – a lot of it. “That is going to take some engineering and some capital,” said James Deckelman, head of Deep Sea Minerals Corp. “But there’s just so much support from the U.S. government right now, so much momentum.” Indeed, the White House told AP it’s a priority to expand domestic refining capacity.

Records show The Metals Company began lobbying around “financing for domestic processing of minerals” early this year.

In the near term, companies will have to rely on existing supply chains abroad. The Metals Company has thus far explored processing in Japan, South Korea and Indonesia.

But reliance on foreign partners could raise a host of legal issues for companies. Most other countries involved in deep-sea mining are bound by their commitments to the International Seabed Authority. Their governments, companies or citizens could be sued for helping the U.S. tap the global seabed, said Coalter Lathrop, a legal expert on the law of the sea.

It could be financially devastating to The Metals Company if foreign companies cut ties. The firm relies heavily on the Swiss company Allseas, which owns the deep-sea mining ship and designed the deep-sea “collector vehicles” that would gather nodules from the seafloor. In a statement, Allseas said it was committed to following all national and international laws, and would deploy its technology “only once we are confident that all relevant regulatory conditions are satisfied.”

In a congressional hearing, Impossible Metals suggested the U.S. government could smooth over some of these hurdles by purchasing nodules for the National Defense Stockpile — a store of metals held in reserve for supply chain emergencies.

Stockpiling the nodules would offer deep-sea mining companies “a guaranteed buyer” in the government, said Oliver Gunasekara, CEO of Impossible Metals, in his January testimony. Not only would it spur industry investment, he suggested, but the government could profit in the future as metals prices rise.

Trytten, the mining consultant, disagrees. “If you can’t process it, it doesn’t do you any good sitting there in a warehouse.”

A spokesperson for the Defense Logistics Agency, which runs the national stockpile, said there was currently no plan to acquire seafloor nodules.

Elizabeth Klein, BOEM’s director under the final two years of Joe Biden’s presidency, denied a 2024 request from Impossible Metals to consider a mining lease near American Samoa. She told the AP she was concerned about local opposition and the suitability of current regulations to a novel industry.

“You want to make sure that the operators are financially capable … (that) they actually have the skills and the resources that would be required,” Klein said. “The current regs don’t speak to much of that at all.”

A spokesperson for BOEM said in a statement that companies demonstrate their financial capability in the bidding process for a mining lease, along with a required deposit. Current regulations require BOEM to ensure the project is carried out safely and responsibly, the spokesperson said.

Tony Romeo, founder of Deep Sea Rare Minerals, which planned to change its name to Eco Minerals this week, isn’t discouraged by the naysayers. Every new source of energy or metal requires some trial and error before it becomes profitable, he told AP.

His South Carolina company got its start in deep-sea operations by pursuing a personal obsession of his – scanning the seafloor for Earhart’s plane. Now, the company is awaiting updates from NOAA on its application to explore for nodules and is considering bidding on mining leases near Alaska and the Northern Mariana Islands.

“There’s going to be some flops. There’s going be some failures. Some businesses aren’t going to make it, but somebody will,” Romeo said. He hopes his company will be producing offshore minerals by 2028.

By then, Trump’s second term will be in its final year. Company executives are pushing hard for assurances that their projects won’t be canceled by a future president who’s not as eager to mine the sea.

At an industry conference in January, top officials at NOAA and BOEM deflected when asked about what kind of certainty they can promise. No one has a crystal ball, they said – but for now, they’re “open for business.”

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Contact AP’s global investigative team at Investigative@ap.org or https://www.ap.org/tips/

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NEW YORK (AP) — Walmart delivered another quarter of impressive sales as speedy deliveries and low prices served as a magnet for shoppers across the income spectrum.

Yet like other major retailers posting financial results this week, it was cautious about the rest of the year given the current economic uncertainty. On Thursday, it issued a forecast for the current quarter that was weaker than what Wall Street had been expecting.

Walmart has resonated with many Americans who are increasingly careful about where they spend their money as inflation has taken a bigger bite out of paychecks, particularly since the start of the Iran war in late February. Traffic at Walmart can be a barometer of consumer spending given its vast customer base. More than 150 million customers are on its website or in its stores every week, according to Walmart.

Walmart’s promise of lower prices, improved merchandise and faster delivery has broadened its base to include wealthier shoppers, with the biggest gains in market share coming from households with annual income over $100,000. That development is taking place as lower-income shoppers become more entrenched in what economists call a K-shaped economy.

“Our results reflect our continued focus on delivering across the enterprise — better shopping experiences, a broader assortment, and faster delivery,” CEO John Furner said in a statement Thursday.

Yet U.S. retailers have spent months navigating an uncertain economic environment, first with President Donald Trump’s tariffs, and now the impact soaring gasoline prices due to the war. The average price for a gallon of regular gasoline has raced higher this week, and did so again overnight. Gasoline prices are 40% above where they were at this time last year.

Based on early reports from retailers including Target and Home Depot, shoppers are cautious but still spending, helped by more generous tax refunds, economists said. Yet there is a widespread belief that once of those benefits dry up, shoppers will pull back their buying

Target reported the largest jump in comparable sales in four years Wednesday, but a cautious outlook overshadowed convincing evidence that changes under the company’s new CEO are resonating with customers. Target raised its annual revenue outlook, but the upgraded sales expectations were still below the pace of the first quarter given so much economic uncertainty.

The nation’s two largest home improvement retailers Home Depot and Lowe’s this week reported a sales lift from professionals and also homeowners stocking up on spring supplies. But executives from both companies said that customers are still holding back on larger discretionary home projects.

“I think, overall, this has been the most difficult housing market that that I’ve faced in this business since the financial crisis, ” Lowe’s CEO Marvin Ellison told analysts on Wednesday.

Walmart, based in Bentonville, Arkansas reported first-quarter earnings of $5.33 billion, or 67 cents for the quarter ended April 30. Adjusted per-share results were 66 cents, matching the 66 cents that analysts expected, according to FactSet.

For the year-ago quarter, the company reported net income of $4.48 billion, or 56 cents per share.

Sales rose 7.3% to $177.75 billion in the fiscal first quarter, above the $174.84 billion that analysts predicted,

Comparable sales at U.S. Walmart stores, including online sales, rose 4.1% during the three-month period ended April 30. That’s below the 4.6% gain in the fourth quarter.

The company said Thursday that consumers are feeling some economic pressure, but sales strength has persisted and it saw one of its strongest quarters of market share gains.

For the second quarter, Walmart expects sales will be 4% to 5% higher than the same period a year ago. That brings the range to between $182.8 billion and $184.59 billion. It also expects per-share profit to be between 72 cents and 74 cents. Analysts had been projecting per-share earns of 75 cents on sales of $186.2 billion, according to FactSet.

For the year, Walmart stuck to the guidance it issued in February of per-share earnings between $2.75 and $2.85, and an increase in sales of between 3.5% and 4.5%, or between $731.1 billion and $738.2 billion.

Wall Street has been anticipating profits of $2.92 per share on sales of $749.01 billion for the year.

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May 20 (Reuters) – PepsiCo is preparing to raise prices on some of its smaller bags of chips due to higher expenses in the U.S., Bloomberg News reported on Wednesday.

The planned increases were prompted by higher production, distribution and retail expenses in the U.S., and are not a direct response to the Iran war, which has caused energy prices to surge, the report said, citing a PepsiCo spokesman.

The company is planning to hike prices by 10 to 20 cents on certain single-serve bags that are now retailing for $2.69 in the coming weeks, the report said. Smaller bags, often sold as two for $1, are also expected to be priced higher, the report added.

An increase would also apply to a limited number of single-serve products beginning in late June, the report also said, citing a company spokesman.

PepsiCo did not immediately respond to Reuters’ request for comment.

The company had topped Wall Street estimates in April, helped partly by the price cuts for salty snacks in the U.S.

(Reporting by Neil J Kanatt in Bengaluru; Editing by Leroy Leo)

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