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As the oil and gas crisis drives the world economy towards another financial crash, green energy is the only viable future

Could this be a watershed moment heralding US geopolitical and technological decline?

David Toke, Mar 19, 2026

Let’s not make a secret of this. The world is hurtling at breakneck speed towards the worst-ever energy crisis. This will be worse than the oil crises of the 1970s. It could be worse even than the oil crisis of 2007-2012, the latter which triggered the global financial meltdown of 2008. Maybe it is small comfort to those billions of people around the world facing hardship in this developing crisis. However, out of the ruins we shall see a market and state-driven renewed drive towards installation of wind, solar, batteries and Electric Vehicles.

Of course, if the US/Israel war with Iran ceased at once and The Straits of Hormuz were reopened by the end of March this apocalyptic scenario could be greatly reduced. Even then, the damage to oil and gas fields would take time to be repaired, and prices would remain high. Yet, time drags on. Reports circulate that the US is planning a military assault to secure the Straits (which would take a long time to assemble and execute), so the likelihood of deep damage to the world economy seems all but certain.

As can be seen in Figure 1 [on original] today’s oil crisis looks much worse than those of the 1970s with Saudi, Kuwaiti and Iraqi oil shut off from transport through the Straits of Hormuz. I take into account in Figure 1 that some oil from these countries, mainly from Iran, but also a minority of the oil from Saudi Arabia, and a trickle from Iraq, will keep on flowing. The release of oil from the IEA’s strategic reserve has some short-term public relations calming effect, but has modest physical effect. But on top of all of this gas production from Qatar and the UAE is shut down. This accounts for 6 per cent of the world’s gas production, although only around half of this is exported in the form of Liquified Natural Gas (LNG)……………………………………….

Regrettably, the energy crisis to which we are already entering may well be even worse than the 2007-2014 high price period. This is because our current crisis is not just an oil crisis, but also a crisis of shortage of natural gas. Added to that, as if more was needed, the closure of the Straits of Hormuz means that other important goods such as large amounts of nickel and material for fertilisers is also blocked off. A vicious round of inflation is striking the world, and what we are seeing now in terms of increases in oil and gas price increases are only the low foothills of the process.

Energy insiders recognise that current oil prices, increasing now above $100 per barrel (up from around $65 per barrel in February), are not yet reflecting the market shortages. Oil traders may be hedging on the conservative side, expecting a political deal, or at least an understanding, to end the War and open the Straits of Hormuz soon. But, if, as seems increasingly likely, the war drags on for months, then physical market realities will send the oil price into a very steep climb.

………………………………………. Indeed market price equilibrium will only come when the amount of oil and gas demanded shrinks to the amount of available supply. Logically, such dramatic contractions in capacity as currently exist can only ultimately happen with massive price increases. This will produce massive economic recession around of the world.

……………………………………..Trump’s USA and Israel can blow up Iranian gas fields and increase the profits of interests of US oil and gas companies without immediately affecting US consumers. This is because the US natural gas market is largely insulated from world gas prices. But Europe will pay heavily for this since natural gas prices in Europe are governed by prices of world LNG supplies. Further destruction of natural gas supplies will see European gas prices go even faster upwards and for much longer than they are anyway. Ultimately, the US economy will get blowback as the rest of the world’s economy collapses through the oil and gas crises – and of course also as US consumers see their gasoline bills spiral upwards beacuse of increases in oil prices.

Each oil crisis has created a new green energy revolution……………………………………..

This oil crisis will boost renewables, EVs and heat pumps

So what technological leaps will this latest oil crisis generate? Certainly, the crisis will make wind power, solar PV, batteries, heat pumps and Electric Vehicles essential means to help mitigate the effects of the coming economic cataclysm. Without solar and wind power the European gas crisis of 2022-3 would have been all the worse. This oil and gas crisis would be all the worse without the amount of solar PV, wind power, batteries and also heat pumps that are in operation.

According to the European Heat Pump Association, there were 25.5 million heat pumps operating in its 19 member states in 2025. This saves around 5 per cent of European gas supply. In the UK renewable energy generates getting on for half of UK electricity. If this were all produced from natural gas, then UK natural gas consumption would be around a third higher than it is………………………………………………………

…………………………….  when the world rebuilds its energy systems there will be increased emphasis on green energy technologies. China, which is deeply involved in green energy technology, will see its economic and geopolitical position strengthened. Although US oil and gas companies will make enormous profits from the War, US citizens will be impoverished by rising fuel and food prices, and world respect for the US as a geopolitical actor will be much reduced into the bargain. The longer this current crisis continues, the greater the risk will be of another global financial crash.

Trump-USA’s attempt to prevent green technological progress will make the USA a loser compared to the rise of China. Finally, and crucially, the battle to combat the climate crisis through market/technological changes and changes in people’s behaviour will be boosted. It would, of course, be much better to do this through peace, not war. https://davidtoke.substack.com/p/as-the-oil-and-gas-crisis-drives

March 22, 2026 - Posted by Christina Macpherson | renewable