As I write this, the Strait of Hormuz is still closed. Almost 20 per cent of the world’s total oil and natural gas, along with refined products like jet fuels, are trapped.
Although future markets for oil are way up, they are relatively optimistic – future prices for oil have been hovering around $9o to $100 a barrel – but the supply constraints mean that the prices people actually pay are soaring to around $150 a barrel, with refined products hitting a record of up to $290 a barrel, in a recent sale in Singapore.
The shortages and blockades will have some awful effects.
The Strait of Hormuz was also the passage point for large amounts of urea (used in fertilizer), helium (for making microchips and cooling MRI machines), and other key commodities like sulfur and aluminum.
It is likely, verging on inevitable, that people will go hungry this year because crop yields will be lower in many parts of the world thanks to a lack of fertilizer.
We’re likely facing both a recession and inflation.
But there is one good thing to come out of this: I believe 2026 will see lower carbon dioxide emissions than 2025, and they’ll be lower every year to come.
Indian families are ditching liquid petroleum gas ranges for electric ones. People are beating down the doors at every electric vehicle or e-scooter retailer across Southeast Asia. Everywhere the price of gas-fired electricity goes up, people will be slapping solar panels on their roofs to save a few bucks.
In the short term, we’re going to see some more-polluting fallbacks, including increased output from coal-fired plants. But in the long term, the future is green, thanks to the cheap power cost of wind, solar, and batteries. All of those have become dramatically less expensive and more efficient than 10 years ago.
Even if there were no shortages, we’re at the point where it’s just good economic sense.
Whether it’s millions of individual consumer choices, or big, utility scale projects, this stupid, unnecessary catastrophe will help us make real progress on the climate crisis.
And that makes me sad and frustrated.
Like tens of millions of other people, I’ve argued for years that we should be doing more on the climate. More solar, more wind, more EVs, more public transit and bike paths, low-carbon production of fertilizers, less plastic. We were in favour of doing it, you know, without actually blowing anything up!
Everyone advocating for change has been steamrolled by a combination of conspiracy theorizing, oil industry lobbying, and the sheer, stubborn resistance to change.
Things were already getting better, if too slowly. Half the cars sold in Europe last month were EVs. Coal use has been declining across most of the world. Over 40 per cent of Australian homes have solar panels.
But we could have done more, far more. We could have done it without the panic, the chaos, the inflation and potential starvation.
Or maybe we couldn’t have.
That’s what scares me. That we might not be capable of rapid, focused change unless we’re in a crisis.