How an energy crisis is spreading across the world

A widening global energy crisis, triggered by conflict among major oil exporters, is rapidly spreading across economies reliant on imported energy, amplifying price shocks and supply disruptions worldwide.

Geopolitical tensions, particularly in key oil-producing regions, are constraining supply flows and driving volatility in oil and gas markets. Countries heavily dependent on imports, especially in Europe and parts of Asia, are facing rising costs for fuel, electricity, and industrial inputs, echoing but also extending beyond the 2022 energy crisis.

Energy crises often lead to short-term reliance on fossil fuels, delaying climate progress. At the same time, they can accelerate investment in renewables, electrification, and energy independence, highlighting the structural vulnerability of fossil fuel dependence and the strategic value of clean energy systems.

Governments are expected to deploy emergency measures such as subsidies, strategic reserves, and demand reduction policies, while accelerating long-term investments in domestic energy production and renewables to reduce exposure to geopolitical shocks.

Around 20% of global oil supply typically flows through key chokepoints like the Strait of Hormuz, making disruptions there highly consequential for global markets. The US-Iran war illustrates just how easily such disruptions can happen.

It appears that most of the countries negatively affected do not have a plan in place to mitigate the problems we are seeing. This doesn’t mean that countries will not be able to find solutions, but it does mean that in the present and immediate future, energy will be a point of worry for much of the globe.

The interconnected world, once and even now a strength of the last few decades, has also set the stage for problems to spread to every corner of the world in the same way.