Paul Krugman writes: The war goes on, and so does the global energy crisis. In fact, I believe that prices of oil futures remain too low given how much spot prices will need to rise to resolve the shortages that will hit once oil supplies that were shipped before the Strait of Hormuz was closed are exhausted. But a better future is coming, despite Donald Trump’s assault on renewable energy as he tries to drag us back into the fossil…
RFE/RL reports: When an Indian tanker carrying liquefied petroleum gas (LPG) passed through the Strait of Hormuz recently, its progress was followed by excited live TV news coverage. “Its position was received eight minutes ago. It’s currently at 12.5 knots and is moving at 154 degrees. It’s reported ETA in India is at 9.30 p.m. tomorrow,” reported one journalist, providing running commentary while following a tracker app. Later, videos showed the ship with a military escort from the Indian Navy…
Bloomberg reports: Emirates Global Aluminium, the Middle East’s top producer of the metal, halted operations at its Al Taweelah smelter after the site was struck by Iranian missiles and drones over the weekend, according to a person familiar with the matter. The smelter on the outskirts of Abu Dhabi lost power due to the strikes and smelting facilities known as potlines were forced into an uncontrolled shutdown, said the person, who asked not to be identified as the information isn’t…
Miles Kellerman writes: The global financial system is a colossal factory containing an endless web of information assembly lines. Every time you tap your card on a payment terminal, whether it’s for a coffee on the way to work or a new vacuum cleaner, you are sending a new informational signal to that factory. Like raw material, that signal is then loaded on a conveyor belt where it is checked and modified by your bank, the seller’s bank, a payment…
Matteo Wong and Charlie Warzel write: The global economy has become dependent on the AI industry. Trillions of dollars are being invested into the technology and the infrastructure it relies on; in the final months of 2025, functionally all economic growth in the United States came from AI investments. This would be risky even in ideal conditions. And we are very far from ideal conditions. Much of the AI supply chain—chips, data centers, combustion turbines, and so on—relies on key…
Bloomberg reports: The biggest oil supply shock in history has reached the one-month mark. Prices have surged, growth forecasts are being cut worldwide, and shortages are emerging across Asia, from Thailand to Pakistan. But the energy industry is warning that the crisis is only beginning. In conversations with more than three dozen oil and gas traders, executives, brokers, shippers and advisers over the last week, one message was repeated over and over: The world still hasn’t grasped the severity of…
Patrick Wintour writes: The price of oil is the key metric for Iran’s success, along with its remaining supply of missile launchers. As a result, 95% of traffic through the strait of Hormuz remains blocked, depriving the markets of 10-13m barrels of oil each day. Such is Iran’s stranglehold even Trump describes Iran allowing ships through as a “present” to the US. Trump admits he is surprised the price of oil is not higher. Jason Bordoff, the founding director at…
Politico reports: President Donald Trump is counting on money from the Gulf Arab States to power his economic golden age. But as the war with Iran nears its fifth week and the regional economy enters a free fall, hundreds of billions of dollars that Middle Eastern governments have pledged for U.S. projects are under threat. That has the Trump administration concerned that Gulf leaders may not be able to fulfill promises to invest heavily in the U.S., according to three…
Soran Mansournia writes: The Islamic Revolutionary Guard Corps (IRGC) does not need aircraft carriers, command of the sea or even a total blockade to threaten the global energy supply. In the Strait of Hormuz, it relies on something older, cheaper and, in some ways, more effective: the weaponization of geography. The corps does not need to destroy fleets or physically block every vessel to produce systemic disruption. It only needs to raise the risk of transit high enough that normal…
Eduardo Porter writes: To shield ordinary Indians from the war in Iran, the government in Delhi redirected supplies of liquefied gas to Indian families, for which it is the main cooking fuel, limiting supplies to the plastics industry. The Nepalese government rationed gas and the Philippines trimmed the government workweek to four days. Bangladesh closed universities and rationed fuel. They have been hardest hit by Iran’s closure of the strait of Hormuz. Economies in Asia import over a third of…
Politico reports: Global energy leaders have been jolted by the enormity of what the U.S.-Israel war with Iran means for their business — and they’re not liking what they’re seeing. It’s the second time in four years that top White House officials have taken the stage at the CERAWeek by S&P Global conference to plead with producers to ramp up their drilling to cover supply disruptions from war-driven oil and natural gas price shocks. But unlike the coordinated international response…
Paul Krugman writes: Over the weekend Donald Trump threatened dire vengeance on Iran unless its government opened the Strait of Hormuz within 48 hours, a deadline that would expire Monday evening in Washington. Specifically, he announced that the U.S. would begin bombing power plants — plants that supply electricity to Iran’s civilian population — unless the Strait was cleared. But at 7:05 AM Monday Trump called the whole thing off — for five days, he said, but many people are…
The New York Times reports: Western companies that pump and process oil and natural gas are among the biggest beneficiaries of the war with Iran, which has snarled production and shipping of fuels in the Persian Gulf. But even as many of them reap the rewards of much more expensive energy, executives are worried that what comes next could be bad for business. Should the war end — a possibility made real when President Trump said on Monday that the…
Richard Heys, Himanshi Bhardwaj and Cliodhna Taylor write: For decades, economists have known that using gross domestic product (GDP) alone to guide policy is problematic. The metric is mainly a measure of market production, albeit one with strong marketing and branding, and misses key elements of what makes a good life. Nevertheless, failure to agree on alternatives has held back the debate over what should replace it. This year will be pivotal for changing how policymakers use data to guide…
Richard Bookstaber writes: At the start of the 2008 financial crisis, I was at a hedge fund. By its end, I was at the U.S. Treasury. At both, I worked with people only a few years out of college. The drama of 2008 was all they knew about financial markets. “Remember what’s happening,” I told them. “You’ll never see anything like this again.” Now I’m not so sure. Maybe they’ll see worse. We have returned to a period of risk,…
Wired reports: On Thursday, Israel launched a series of strikes on various oil and gas facilities in the region, most notably the South Pars gas field, the world’s biggest natural gas field, which is jointly controlled by Iran and Qatar. Iran retaliated with counterstrikes, including on the world’s largest oil export facility in Qatar. Oil prices temporarily shot up to nearly $120 a barrel. These strikes appear to have damaged infrastructure that’s crucial to the world’s fossil fuel supply. Qatar…