Petro is pretty much upstream of everything: plastics, fertilizers, pharmaceuticals, cooking oils, lubricants, cosmetics. Dow chemical just doubled the cost of polyethylene as of April 1st. Taiwan relies on LNG for 40% of its energy production and has 11 days of LNG storage--meaning it may have to consider limiting industrial electricity use if things persist. I will clarify based on a reply, this doesn't mean they'll run out in that time, but that they have limited runway that will have deleterious effects as time goes on:
> Yeh Tsung-kuang, a professor in the Department of Engineering and System Science at National Tsing Hua University, said Taiwan's maximum LNG inventory is only 11 days but that does not mean the island will run out of fuel or face outages within that time period.
Even if the Strait saw normal traffic today (and Iran is incentivized and well-positioned to keep it closed for a while), it would take quite a while to recover lost supply. Iran continues to employ a tit-for-tat strategy and Israel just targeted steel industry in the country -- I'm not even taking into account more deliberate damage to energy infrastructure in the Mid east.
This is a scary crisis wherein the most movable actor (the US) is not going to accept Iran's terms. It could collapse the global economy, and that crucially includes the AI industry this forum loves to focus on almost exclusively. The US and the majority of the west has essentially no fiscal room compared to the comparably lesser 1970s crises either. This could easily spiral out of control and cause a level of suffering across the world (esp the global south) most of us on this forum have not lived to see.
Before calling it "the worst", I'd like more detail on how to do the comparison with the oil crises of the 1970's. My guess is that modern economies might be somewhat less oil-dependent than they were then, because the alternatives are more developed.
They are more developed, sure, and the US (from a US centric view) is producing a lot of oil now. However, consider that pretty much all of the goods you see in the supermarket got there via diesel (trains, semi-trucks). The percentage of semi-trucks operating on electricity is still miniscule at this point. Air transport? All petroleum. Consider also other things like fertilizers - we're heavily dependent on nitrogen fertilizers derived from petroleum and planting season in the northern hemisphere is starting right about now. Yes we're producing a lot more electricity with renewables, but demand is also up.
During the 1973–74 Arab oil embargo, the disruption removed approximately 4.5 million barrels per day (mb/d) from the market, which constituted about
7% of the global oil supply at the time. This disruption significantly impacted global supplies.
20% is a lot more than 7%. This could be worse than 1973-74.
As a 10year-old in 1973 I remember spending a lot of time in the backseat of the station wagon as we were waiting line line for gas.
For context, during the first COVID spring (March-June 2020) oil demand fell by 20%. Because nobody was driving or flying anywhere. That's what it took to cut 20%.
Yes, couldn't make either face masks or toilet paper during covid. Most people will find out how fragile everything is with idiot MBAs optimizing just-in-time for better quarterly reports!
To look at it another way, we're a lot more globalised than in the 1970s. Resources halfway across the planet that you never even knew you depended on can shut you down when they suddenly go away.
> Ressources can be diverted at a much quicker rate with a lot more agility.
That's completely incorrect.
Covid demonstrated that. We have optimized so strongly for profit (outsource everything, just in time inventory, etc.) that we have no robustness in the face of disruption. There are now single chokepoints everywhere.
Yes, we could retool. But nobody will retool without a check from somebody. Everybody will simply hold their breath waiting for the crisis to pass. Everybody held their breath for Covid; they will absolutely do so with the knowledge that the orange clown will disappear in two years.
Before calling it "the worst", I'd like more detail on how to do the comparison with the oil crises of the 1970's.
There's a graph in today's (March 28/29) Wall Street Journal that does exactly that, and shows that what's happening now is both currently slightly worse than the 1970's, and the worst oil shock in history.
> Petro is pretty much upstream of everything: plastics, fertilizers, pharmaceuticals, cooking oils, lubricants, cosmetics. Dow chemical just doubled the cost of polyethylene as of April 1st. Taiwan relies on LNG for 40% of its energy production and has like 10 days of fuel left--semis are implicated.
This is, on the high end, 20% of the use of fossil fuels. We overwhelmingly burn oil and gas. If we displaced the burning, Hormuz would not matter (or would minimally matter for a few molecules) and the world would be awash in abundant supplies.
Renewable investment would solve/would have prevented this crisis.
>This could easily spiral out of control and cause a level of suffering across the world (esp the global south) most of us on this forum have not lived to see.
Daily anxiety attack thanks. As a european I think we are way too vulnerable. Countries divided, rich getting richer, more and more poor people who can barely afford food, and that's in Europe let alone talk about what happens with the poor in Africa and Asia.
Sooner or later we will need a global reset but that sounds worse than everything else
There's no reason to assume it won't. It might not voluntarily but it looks a lot like it's either going to be forced to accept them, or it's going to become an irrelevant actor one way or another leaving Iran to set terms by default.
Other countries are switching to the yuan global reserve currency and petrocurrency in order to be allowed passage through Hormuz. The US has no counter to this (besides ending the war, which it won't) and with how much the US relies on these two things to be globally relevant, if this continues then oil prices will return to normal, will be traded in yuan, and there will no longer be a US. A complete own goal and possibly the fastest self destruction by unforced error in all of human history.
Europe will lag behind the trend because of its alliance with the US but it will turn eventually in order to get low oil prices. When the US attempted to force Europe to sanction Iran several years ago, Europe invented a system to evade them (INSTEX).
US bond markets have just locked up this week. The US found itself unable to borrow more money at any price - nobody wants to lend it. Banks turned off their automated trading systems because they can't work in this environment. This is a symptom of global dedollarization. While this shock may only last a few days the frequency of this sort of this sort of thing is rapidly increasing, and when a government can't borrow money any more it has no choice but to print it to pay its debts, and we know where that leads: Weimar-style hyperinflation.
Missing in discussion is that the loss of mideastern oil is being offset by releases from strategic reserves.
But those will end, creating even more shortages.
Most people just don't understand what a monumental rewrite of global politics this is and (IMHO) it will go down as the worst foreign policy mistake in US history and it's not even close. Some might say "what about Vietnam?" No, this is worse, geopolitically. WhY/ Because there was never any possibility of success. The US simply doesn't have the military capability to depose the regime or open the Strait and Pentagon military planners all knew this beforehand.
The big winners are:
- China. They're already going renewable at a rapid pace. They have a massive stockpile of oil (~1.4B barrels) and they're still receiving oil from Iran. This diminishes US influence in the the world and increases China's influence;
- Russia: this crisis will probably force the West to make peace with Russia and they'll retain any current Ukrainian territory just to secure Russian energy exports, particularly natural gas;
- Iran: the sanctions are over. Prior to all this Iran was selling oil to China for below market rate, less than $50/barrel. Now? They're legally able to sell it and get market rates, which are more like ~$120/barrel. Iran may well still get a regime of charging ships to traverse the Strait after the war is over;
Who are the losers?
- Europe: this is going to massively increase energy costs for years;
- Ukraine: see above (Russia);
- The US: massively decreased influence, particularly in the Middle East;
- Israel: there will be no regime change in Iran, Iran will come out in a better position and this may well be the first crack in the US-Israel relationship because Israel dog-walked the US into this war. The Iron Dome has shown to be not as impenetrable as once thought;
- The Gulf states: they face a tough choice between remaining US client states or breaking free. Breaking free probably means their monarchies and despotic regimes will fall. The myth of the US security guarantee has been broken. These regimes will probably stick with the US for their own survival and we may see some of them fall anyway (eg Bahrain).
I agree with your main point: "just go renewable" is both naive and utterly useless advice. That's a decades-long project. Also, who makes all the solar panels (and probably windmills)? China.
It is a little different because the US is a net energy exporter now and definitely wasn't in the 1970s. Still, there will be higher prices for everything and the US can't realistically block exports to keep prices low because other countries will stop sending us stuff.
Were the president anyone else, they would be impeached and removed from office. That's how bad this is. But we live in a post-truth world the the president is the leader of a cult.
The world is way too stable for a real crisis. The west is much more resilient than a lot of people think. Nothing will really change. Life will go on.
So... why is fuel 25% cheaper in Slovenia than in the neighbouring country while Solvenia is simultaneously having issues with running out of fuel?
Seems like the obvious solution is to raise prices so people stop driving to your country (wasting fuel, ironically) to take your cheap fuel instead of just paying for the fuel in their own country. More than that it's a solution the free market would actually find on its own...
50L/day - with no other limits - sounds like a lot. Are there really fuel tourists coming in en masse and taking more than this? With zero tracking of enforcement whatsoever, people will just hit up a few different nearby gas stations instead of one anyways and that's it.
If you want to see the end state of lack of oil, look no further than Cuba's current state of affairs. It's dire.
Also for the naive people in the comments who say "invest in renewables" it's not that simple. You can buy electric cars but the car's whole manufacturing process had multiple steps that required oil. The same applies to everything, it's not a single layer issues, it's a multi-layer issue that needs addressing from the ground and takes years and years with full investment. The boats, the planes require fuel. The industrial machinery requires fuel. We need to address it from the ground up and it's not an easy feat.
We should 100% invest and diversify energy production, but the reality is that even if we had a surplus of renewable energy on the grid, that wouldn't save a country because there are too many cogs that need oil right now that need replacing.
Well if you have regulated fuel prices, and free trade and travel with neighboring countries (the whole point of the EU), you're gonna see arbitrage if those countries aren't regulating fuel prices.
Options are to either un-regulate the prices, or ration the fuel sales.
Meanwhile in India, people are queuing up to get LPG cylinders (cooking gas) and the government is making similar statements as quoted in this article that there are no shortages.
Pump prices of petrol and diesel in India are being kept the same by reducing taxes since there are some key state elections next month and the ruling party of the union government doesn’t want to hurt its chances.
Expect fuel prices in India to go up in May and the following months, even though procurement from Russia is increasing.
With a fertilizer shortage, the consequences of this war are making things tougher and tougher for common people everywhere.
This is just like COVID where countries watch other countries react and just go "huh would you look at that" and go back to their lunch.
In the UK there is currently a feels like temperature of -8C (early morning) and yesterday reached a dizzying high of 4c. Spring is stubbornly in hiding still.
The inflationary crisis will be immense as it's building off the previous one which didn't really go away
Slovenia is 165km wide and 265km long so with 50lit gas tank your are out of the country. It's only the same day back and forth that is limited by this measure. It probably has nothing to do with energy saving or renewable push.
Er, Hungary had implemented this back in 2022/23 when the Ukraine war started. The title makes it look like it's the very first country to restrict how much fuel you can buy in one go.
Say I live in Austria and it is a short ride to a Slovenia Station. Can buy as much gas as I want, but citizens in Slovenia are limited ? That does not seem right.
350 comments
This is the worst energy crisis in modern history, and little of the western world has really started feeling the effects yet:
https://thedispatch.com/newsletter/dispatch-energy/iran-war-...
Petro is pretty much upstream of everything: plastics, fertilizers, pharmaceuticals, cooking oils, lubricants, cosmetics. Dow chemical just doubled the cost of polyethylene as of April 1st. Taiwan relies on LNG for 40% of its energy production and has 11 days of LNG storage--meaning it may have to consider limiting industrial electricity use if things persist. I will clarify based on a reply, this doesn't mean they'll run out in that time, but that they have limited runway that will have deleterious effects as time goes on:
> Yeh Tsung-kuang, a professor in the Department of Engineering and System Science at National Tsing Hua University, said Taiwan's maximum LNG inventory is only 11 days but that does not mean the island will run out of fuel or face outages within that time period.
Even if the Strait saw normal traffic today (and Iran is incentivized and well-positioned to keep it closed for a while), it would take quite a while to recover lost supply. Iran continues to employ a tit-for-tat strategy and Israel just targeted steel industry in the country -- I'm not even taking into account more deliberate damage to energy infrastructure in the Mid east.
This is a scary crisis wherein the most movable actor (the US) is not going to accept Iran's terms. It could collapse the global economy, and that crucially includes the AI industry this forum loves to focus on almost exclusively. The US and the majority of the west has essentially no fiscal room compared to the comparably lesser 1970s crises either. This could easily spiral out of control and cause a level of suffering across the world (esp the global south) most of us on this forum have not lived to see.
During the 1973–74 Arab oil embargo, the disruption removed approximately 4.5 million barrels per day (mb/d) from the market, which constituted about 7% of the global oil supply at the time. This disruption significantly impacted global supplies.
20% is a lot more than 7%. This could be worse than 1973-74. As a 10year-old in 1973 I remember spending a lot of time in the backseat of the station wagon as we were waiting line line for gas.
For context, during the first COVID spring (March-June 2020) oil demand fell by 20%. Because nobody was driving or flying anywhere. That's what it took to cut 20%.
> Ressources can be diverted at a much quicker rate with a lot more agility.
That's completely incorrect.
Covid demonstrated that. We have optimized so strongly for profit (outsource everything, just in time inventory, etc.) that we have no robustness in the face of disruption. There are now single chokepoints everywhere.
Yes, we could retool. But nobody will retool without a check from somebody. Everybody will simply hold their breath waiting for the crisis to pass. Everybody held their breath for Covid; they will absolutely do so with the knowledge that the orange clown will disappear in two years.
There's a graph in today's (March 28/29) Wall Street Journal that does exactly that, and shows that what's happening now is both currently slightly worse than the 1970's, and the worst oil shock in history.
And remember that this isn't over yet.
> Petro is pretty much upstream of everything: plastics, fertilizers, pharmaceuticals, cooking oils, lubricants, cosmetics. Dow chemical just doubled the cost of polyethylene as of April 1st. Taiwan relies on LNG for 40% of its energy production and has like 10 days of fuel left--semis are implicated.
This is, on the high end, 20% of the use of fossil fuels. We overwhelmingly burn oil and gas. If we displaced the burning, Hormuz would not matter (or would minimally matter for a few molecules) and the world would be awash in abundant supplies.
Renewable investment would solve/would have prevented this crisis.
>This could easily spiral out of control and cause a level of suffering across the world (esp the global south) most of us on this forum have not lived to see.
Daily anxiety attack thanks. As a european I think we are way too vulnerable. Countries divided, rich getting richer, more and more poor people who can barely afford food, and that's in Europe let alone talk about what happens with the poor in Africa and Asia.
Sooner or later we will need a global reset but that sounds worse than everything else
> Petro is pretty much upstream of everything: plastics, fertilizers, pharmaceuticals, cooking oils,
Really! What petroleum-based oil do you cook with?
> Taiwan relies on LNG for 40% of its energy production and has like 10 days of fuel left--semis are implicated.
The "10 days left" thing seems to be a hoax(?)
https://www.msn.com/en-us/politics/international-relations/m...
https://www.malaymail.com/news/world/2026/03/26/is-taiwan-ru...
> the US is not going to accept Iran's terms
There's no reason to assume it won't. It might not voluntarily but it looks a lot like it's either going to be forced to accept them, or it's going to become an irrelevant actor one way or another leaving Iran to set terms by default.
Other countries are switching to the yuan global reserve currency and petrocurrency in order to be allowed passage through Hormuz. The US has no counter to this (besides ending the war, which it won't) and with how much the US relies on these two things to be globally relevant, if this continues then oil prices will return to normal, will be traded in yuan, and there will no longer be a US. A complete own goal and possibly the fastest self destruction by unforced error in all of human history.
Europe will lag behind the trend because of its alliance with the US but it will turn eventually in order to get low oil prices. When the US attempted to force Europe to sanction Iran several years ago, Europe invented a system to evade them (INSTEX).
US bond markets have just locked up this week. The US found itself unable to borrow more money at any price - nobody wants to lend it. Banks turned off their automated trading systems because they can't work in this environment. This is a symptom of global dedollarization. While this shock may only last a few days the frequency of this sort of this sort of thing is rapidly increasing, and when a government can't borrow money any more it has no choice but to print it to pay its debts, and we know where that leads: Weimar-style hyperinflation.
The big winners are:
- China. They're already going renewable at a rapid pace. They have a massive stockpile of oil (~1.4B barrels) and they're still receiving oil from Iran. This diminishes US influence in the the world and increases China's influence;
- Russia: this crisis will probably force the West to make peace with Russia and they'll retain any current Ukrainian territory just to secure Russian energy exports, particularly natural gas;
- Iran: the sanctions are over. Prior to all this Iran was selling oil to China for below market rate, less than $50/barrel. Now? They're legally able to sell it and get market rates, which are more like ~$120/barrel. Iran may well still get a regime of charging ships to traverse the Strait after the war is over;
Who are the losers?
- Europe: this is going to massively increase energy costs for years;
- Ukraine: see above (Russia);
- The US: massively decreased influence, particularly in the Middle East;
- Israel: there will be no regime change in Iran, Iran will come out in a better position and this may well be the first crack in the US-Israel relationship because Israel dog-walked the US into this war. The Iron Dome has shown to be not as impenetrable as once thought;
- The Gulf states: they face a tough choice between remaining US client states or breaking free. Breaking free probably means their monarchies and despotic regimes will fall. The myth of the US security guarantee has been broken. These regimes will probably stick with the US for their own survival and we may see some of them fall anyway (eg Bahrain).
I agree with your main point: "just go renewable" is both naive and utterly useless advice. That's a decades-long project. Also, who makes all the solar panels (and probably windmills)? China.
It is a little different because the US is a net energy exporter now and definitely wasn't in the 1970s. Still, there will be higher prices for everything and the US can't realistically block exports to keep prices low because other countries will stop sending us stuff.
Were the president anyone else, they would be impeached and removed from office. That's how bad this is. But we live in a post-truth world the the president is the leader of a cult.
I hear diesel is running out in NSW and Queensland Australia. Good thing you don't need diesel to run mining operations. Oh wait..
>Petro is pretty much upstream of everything: [...] cooking oils
Wait, what?
And, looking at the scenario you’re describing, it could be the most sane thing to do at this point.
Seems like the obvious solution is to raise prices so people stop driving to your country (wasting fuel, ironically) to take your cheap fuel instead of just paying for the fuel in their own country. More than that it's a solution the free market would actually find on its own...
https://fuelo.net/cheap/where?lang=bg&order=cheap&fuel_type=...
come here, the water is fine :)
Also for the naive people in the comments who say "invest in renewables" it's not that simple. You can buy electric cars but the car's whole manufacturing process had multiple steps that required oil. The same applies to everything, it's not a single layer issues, it's a multi-layer issue that needs addressing from the ground and takes years and years with full investment. The boats, the planes require fuel. The industrial machinery requires fuel. We need to address it from the ground up and it's not an easy feat.
We should 100% invest and diversify energy production, but the reality is that even if we had a surplus of renewable energy on the grid, that wouldn't save a country because there are too many cogs that need oil right now that need replacing.
Options are to either un-regulate the prices, or ration the fuel sales.
Pump prices of petrol and diesel in India are being kept the same by reducing taxes since there are some key state elections next month and the ruling party of the union government doesn’t want to hurt its chances.
Expect fuel prices in India to go up in May and the following months, even though procurement from Russia is increasing.
With a fertilizer shortage, the consequences of this war are making things tougher and tougher for common people everywhere.
In the UK there is currently a feels like temperature of -8C (early morning) and yesterday reached a dizzying high of 4c. Spring is stubbornly in hiding still.
The inflationary crisis will be immense as it's building off the previous one which didn't really go away
https://www.independent.co.uk/news/world/europe/slovakia-die...
Say I live in Austria and it is a short ride to a Slovenia Station. Can buy as much gas as I want, but citizens in Slovenia are limited ? That does not seem right.
> 23 March 2026