The New Twin Fossil Shock

The shutdown of the Strait of Hormuz that began on 28th February 2026 has been the largest oil supply disruption on record. The 1973 and 1979 oil shocks each removed around five million barrels a day. Hormuz has taken out more than ten. If scale is one variable, duration is the other. In both 1970s crises, the supply loss lasted around six months. Six weeks in, even an immediate reopening puts normality months away. Wells need time to restart. Over sixty damaged energy sites across the Gulf need repairing. The risk premium for crossing the Strait will linger.

The significance of this shock is compounded by what preceded it. Four years ago, Russia’s invasion of Ukraine shut the world’s largest fossil fuel exporter out of its largest market. Overnight, Europe was forced to replace its main energy supplier, with knock-on effects worldwide. Now, four years later, the world’s largest oil and LNG supply route has followed suit. One shock is an event. Two is a pattern. To the extent history persuades, it is by repetition.

The wider pattern is that fossil fuel trade has never been riskier. The world is increasingly unstable – global armed conflicts are at their highest in decades, and the weapons needed to close a chokepoint have never been cheaper. A $20,000 drone can stop a $150 million tanker dead in the water. Furthermore, in 2019, the United States became a net fossil exporter for the first time since World War II. Its incentives have changed accordingly. For the three-quarters of the world living in fossil fuel-importing countries, that means, at best, a receding guarantor at the very time maritime dangers rise. At worst, the US has moved from guarantor to disruptor. For this importing majority, decades of fossil import dependency accumulated under the Pax Americana are now a glaring strategic vulnerability.

Generational shocks ask for a historical perspective. The closest analogy to the twin shocks of the 2020s is the twin shocks of the 1970s. So, what structural changes did that cyclical disruption bring forward? What guidance can it offer now? And why might today’s response go further, given the scale and cost of the alternatives?