How the energy crisis will change the world

Investment Analysis Clubs Macro Economic Trends and Risks
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Older METARs will remember how the energy crisis of the 1970s prompted more energy-efficient cars, homes and appliances. Higher cost is a strong incentive for change.

https://www.nytimes.com/2026/04/01/opinion/oil-crisis-iran-electric-solar.html

This Energy Crisis Is Going to Change the World

By Jonathan Mingle, The New York Times, April 1, 2026

…

Fatih Birol, the head of the International Energy Agency, has called this “the greatest global energy security threat in history” — much worse than the 1970s oil crisis, the Covid pandemic or Russia’s invasion of Ukraine in 2022. This conflict has disrupted a bigger share of the global oil and gas trade, and there is no way to quickly fill the gap…

This is the first oil crisis in which clean alternatives to oil and gas — solar panels, wind turbines, electric vehicles and batteries — are both inexpensive and widely available. …

it could be years before the oil and gas supply is restored to prewar levels. After Iranian missiles struck the Ras Laffan liquefied natural gas export facility in Qatar, the country ceased production of the fuel entirely, suddenly taking 20 percent of the world’s supply off the market. Officials predict it will take three to five years to bring that plant, the world’s largest, fully online again. …

Supply chains for key items, such as transformers, aluminum and copper wire, now face their own bottlenecks and disruptions…

Chinese companies have pledged to invest more than $227 billion in other countries’ capacity to manufacture E.V.s, chargers, batteries, solar, wind and other clean technologies… [end quote]

It takes time to design, build and install facilities but the world could leave the U.S. behind.

Wendy

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Wendy,

Deep dive into the entire portfolio of energy products that China has to offer and the financing it can offer would be an interesting AI discussion.

China is currently supply constrained on batteries for battery plus solar and for ramping up EV’s. However, the factories are being built. (Per Claude, but sometimes Claude takes LSD) Solar panels are in excess capacity.

I have not checked on China’s ability to sell SMR’s or old fashioned Nuke plants. I think from my reading that solar plus batteries is cheaper and quicker.

Cheers
Qazulight

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We are not making nearly enough of an investment. Odds are our corporations are investing as much or more overseas depending on the taxation levels and at times labor costs. This sure as heck is not going to work, and it will cost the global economy including China.

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Oil rationing limits such numbers coming out of China.

edit I see your graph. Solar cells are another story.

If I were looking at transparent motives, West Texas wants the Staits closed. Tonights fireside chat should be a doozy.

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China won’t be able to play the good guy forever. The country may militarially need to invade Iran.

China likely will not need to make immediate, drastic cuts to production due to a Strait of Hormuz closure in the short term, but will face significant pressure if it lasts, potentially triggering reduced manufacturing, energy rationing, and higher costs. While roughly 40% of China’s oil imports pass through the strait, it has significant stockpiles and diversified energy sources (coal/renewables) to manage short-term disruption.

[image]CSIS | Center for Strategic and International Studies +3

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Leap,

Play a mind game.

Go to an AI. Tell the AI that it is the advisory board to Xi. You play Xi. Start figuring out what you CAN do.

You will see that Xi can do a lot to preserve China. What he cannot do is save the world.

India is the country that is facing extreme hardship. This plays into China’s hand. It will be telling seeing how Xi handles India.

Cheers
Qazulight

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Qaz,

The backdrop to that is US and Western capital flooding into India. The country can grow fast, but needs oil. Or it needs electric, it is going to leap frog us into electric. China will be under internal pressure to manufacture in India. It exports Chinese smog. It opens up more Russian oil to Chinese manufacturers who are in India. It opens up US oil stability to India versus China.

A faster growing India calls a lot of shots.

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Leap,

That would be awesome. Problem is, India doesn’t have time. They are facing basic fuel shortages now. Fertilizer shortages in a few weeks. Even at full speed with a generous supply of Chinese solar panels (That China has in excess and batteries (That no one has to spare) they will face food shortages by fall.

It doesn’t look good.

Qazulight

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There seems to some confusion between electricity and food.

DB2

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The US has a food surplus. But I could be wrong, only a blurb heard on NPR.

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Certainly the US exports lots of grain. And probably beef and pork. Yes we have abundant food but largely dependent on fossil fuels. Green energy is possible but requires massive investment.

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True dat! Understanding this is a macroeconomics board, what are the other unintended consequences of this war?

If we look back to the Suez Crisis, we can see how that event reshaped the world order in a number of ways. Not all of them macroeconomic specific, but many macro adjacent. Take France feeling the nudge to develop nuclear weapons as an example. I guess they figured they couldn’t count on the US for protection since the US didn’t want to partake in the Suez shenanigans…oh how the tables have turned!

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I seem to remember that the sainted Ronald Reagan stripped the solar panels off the roof of the White House shortly after the Inauguration.

There’s a long history of ignorance and innumeracy.

intercst

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Yes, Elon mentioned tht small modular reactors (SMR) are not competitive with Solar plus batteries.

The largest nuclear reactor (The Sun) is free, why not make use of it?

intercst

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US households regularly discard 30% to 40% of the food they buy.

intercst

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Suez was fading empire in denial syndrome, as is our current psycho deployments and rantings.

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@flyerboys

The price of oil is beginning to drop, and will drop substantially.

This crisis is wrapping up.

Iran is being blamed by most people around the world.

David, oil is deep in backwardation. WTI is higher than Brent as I type, $112 versus $109.

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No.

No.

No.

I believe I have found an almost perfect counter-indicator for reality.

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  • Gasoline at the pump keeps going up
  • Gasoline at the pump drops from here
0 voters

This is an economics board. Econ has a beautiful twin called finance. I suggest you bone up on backwardation.