Energy Shocks Become the New Normal

The world is facing an unprecedented era of global energy shocks, according to Ron Bousso. The past decade has seen a rapid succession of crises, driven by military conflict, extreme weather, and supply-chain snarls.

Since World War Two, the world has averaged one major energy crisis per decade. However, in recent years, three massive shocks have occurred within a four-year span: the 2021 post-pandemic inflationary surge, Russia's invasion of Ukraine in 2022, and now the Iran war.

The rise of Asia, particularly China, has contributed to this trend. Global oil imports surged by 55% between 2000 and 2024, with China's imports growing six-fold over that period. The US transformation from a major energy importer to a top producer and exporter has also led to increased competition in global markets.

The Iran war has shattered the assumption that Gulf producers would never engage in conflict impeding energy flows. Tehran's decision to block the Strait of Hormuz, through which 20% of the world's oil and gas previously flowed, has raised questions about the security of other critical chokepoints.