The Demise of Traditional Energy Security

Rethinking Global Energy Security Amid Rising Tensions

For many years, global leaders assured financial markets that the world’s energy security framework was becoming more robust. Shipping lanes were diversified, strategic reserves increased, and renewable energy sources gained traction. Major oil-producing nations also worked more closely together to cushion oil prices from geopolitical disturbances. Many believed these efforts had created a resilient system.

However, the recent U.S.–Israel military actions against Iran have deeply unsettled this sense of security.

When conflict intensified near the Strait of Hormuz, the fragility of the global energy network became unmistakably clear. Iran has repeatedly threatened to block this narrow passage, and even the possibility of such an event has sent shockwaves through international markets. The Strait of Hormuz is responsible for transporting about a quarter of the world’s seaborne crude oil, as well as significant quantities of liquefied natural gas and petroleum products. Any prolonged disruption here would have global, not just regional, consequences.

The temporary stoppage of shipments through Hormuz brought back memories of the 1973 oil embargo, when Arab oil producers cut off supplies to Western nations. Yet, today’s energy landscape is far more interconnected. This time, the impact was felt not only in Europe and North America but also across East Asia, including countries like China, Japan, and South Korea, whose economies are heavily reliant on Gulf energy exports.

According to the U.S. Energy Information Administration, about 26% of the world’s seaborne crude oil—roughly 14 million barrels per day—passes through the Strait of Hormuz, along with nearly 6 million barrels per day of petroleum products. The strait is also a crucial route for liquefied natural gas, with over 11 billion cubic feet moving through daily. A long-term blockage would put immense pressure on both oil and gas markets, a dangerous prospect for an already vulnerable global economy.

Markets responded immediately. News of attacks on oil infrastructure in the Gulf, including sites near Saudi Arabia’s Ras Tanura, caused oil prices to spike within hours. LNG prices also surged. Even short-lived disruptions, such as those affecting Qatar’s LNG production, demonstrated how quickly regional military tensions can escalate into worldwide economic turmoil.

Political statements from both sides suggest the crisis could be prolonged. U.S. President Donald Trump has signaled that military operations might continue for weeks if needed, while Iranian officials, including Ali Larijani, have indicated their readiness for a drawn-out confrontation. In this environment, supply shocks risk becoming a persistent feature rather than a temporary setback.

Beyond Immediate Turmoil: The Deeper Challenge

Looking past the current volatility, a more fundamental issue emerges: the world’s energy security remains dangerously dependent on a single strategic chokepoint.

Even if hostilities ease—whether through political change in Iran or diplomatic efforts—the underlying weakness persists. The global system still relies on narrow transit routes and infrastructure vulnerable to political risk. While the diversity of suppliers has improved, progress on alternative transit paths and physical security has lagged.

Creating a more resilient energy order requires more than just managing short-term crises. It calls for:

• Developing new transit corridors from the Gulf to Europe, utilizing pipelines through Iraq, Türkiye, Jordan, Syria, Egypt, and Mediterranean ports.
• Establishing alternative export routes to Asia, such as subsea pipelines or overland links via Pakistan and India.
• Accelerating the adoption of renewables and regional power grids to lessen reliance on maritime fossil fuel routes.
• Strengthening the protection of energy infrastructure, ensuring oil and gas facilities are treated as neutral assets shielded from conflict.

Implementing these changes will not be easy. They demand cooperation among competing powers, sustained financial investment, and greater regional stability.

Ultimately, lasting energy security cannot be achieved by military deterrence alone. It depends on reducing both the motivation and ability to disrupt supplies. This means building stronger state institutions, addressing threats from non-state actors, and easing the sectarian and ethnic divisions that have fueled instability for decades.

Nations such as Iraq, the Kurdistan Region, Syria, Jordan, and Türkiye—as well as a post-conflict Iran—could become key stabilizing forces if they are included in a broader, cooperative energy framework supported by both Western and Eastern powers.

This crisis highlights a stark reality: while globalization has made energy markets more interconnected, it has not made them resilient. The system was designed for efficiency and price stability, not for withstanding geopolitical upheaval.

Now, with renewed conflict in the Gulf, the world faces a pivotal decision. Will it continue to address vulnerabilities as they arise, or will it undertake the much harder task of fundamentally redesigning global energy security for an era marked by rivalry, fragmentation, and the shift toward cleaner energy?

The old approaches are no longer sufficient.

By Shahriar Sheikhlar for Oilprice.com

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