OPINION:
The global economy is approaching a dangerous energy vulnerability that policymakers appear unwilling to confront.
For years, governments assumed energy markets could absorb almost any geopolitical shock. Cheap oil, stable shipping routes and reliable supply chains came to be viewed as permanent features of the global economy.
They are not.
Today, global oil inventories are tightening, strategic reserves remain depleted, spare production capacity is limited, and tensions surrounding Iran and the Strait of Hormuz continue to threaten one of the world’s most important energy corridors.
This is not just about higher gasoline prices. It is also about the erosion of the safety buffer that protects the global economy from major disruptions.
Roughly one-fifth of the oil traded globally passes through the Strait of Hormuz. Any serious military escalation involving Iran could send immediate shock waves through energy markets, driving up shipping costs, insurance premiums and fuel prices while disrupting global supply chains.
What makes the situation particularly dangerous is the lack of replacement capacity. New oil projects require years to develop. Pipelines cannot be built overnight. Tanker fleets and refining capacity cannot suddenly expand in response to a crisis.
Yet many Western governments continue to act as if energy stability is guaranteed.
History demonstrates that energy shocks rarely remain confined to fuel markets. Rising energy prices quickly translate into higher transportation expenses, increased food prices, manufacturing slowdowns, weaker consumer spending and broader economic instability.
In severe cases, they can contribute to recession.
Markets appear increasingly aware of these risks. Traders continue to price in the possibility of supply disruptions tied to geopolitical tensions in the Middle East, even as public officials project confidence.
Washington should treat energy security as a core national security priority. Preventing a wider regional conflict is not only about protecting allies or deterring adversaries. It is also about protecting American consumers, businesses and the global economy from a potentially severe economic shock.
The prosperity of modern economies depends on reliable and affordable energy supplies. As geopolitical tensions rise and spare capacity shrinks, that assumption is becoming increasingly fragile.
Policymakers should recognize the warning signs before the next disruption forces them to do so.
HEYRSH ABDULRAHMAN
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