What Does Iran's Energy Security Crisis Mean for the World?

This transcript has been edited for clarity.

Rachel Bronson: Hi, good afternoon. I'm Rachel Bronson. I am the Lester Crown non-resident senior fellow for energy and geopolitics at the Chicago Council on Global Affairs. Thank you for joining our livestream program on fueling the global impacts of Iran's energy security crisis. I am joined by two fantastic guests.

Before jumping into that, some housekeeping. The first is the disclaimer that the Council is an independent, nonpartisan organization, and all views and opinions expressed are those of the individuals expressing them.

Let me quickly do some introductions. Jason Bordoff is the founding director of Columbia's Center for Global Energy Policy. This is a powerhouse organization that Jason, I believe, is your brainchild, but has quickly become one of the most important institutions on energy and geopolitics. He has surrounded himself with the world's leading experts. Jason has been in and out of high-level positions in the US administrations, including the Biden administration. He's been at Treasury, I believe, as well as in the White House at the NSC. So we can think of no better person to join us, and we're grateful he's here from the French Alps. Jason, we're hoping you can bring some of the observations you're picking up from speaking with your colleagues there right now.

I'm also delighted to be joined by Raad Alkadiri. Raad is a senior associate at CSIS, the Center for Strategic and International Studies. Raad and I go back to 2002, and I think it bears on this conversation. We came together as a group at the Council on Foreign Relations, which was working on planning for the Iraq invasion and how to ensure that Iraq came out of it with its energy industry healthy, stable, and flourishing. As we know, notwithstanding the fact that it was held up on the Senate floor, the administration didn't pay much attention to it, and I think they would've been better off. There's a lot of wisdom in some of those things back then that I know you've been working on since, so I'm delighted that you can join us as well. 

The International Energy Agency has described the current situation as the largest supply disruption in the history of global oil markets. So that's what we're in the moment of. Just to get us up to speed, the energy infrastructure has been targeted very quickly, certainly quicker than it seems American planners anticipated. We are learning each day that there doesn't seem to have been a lot of planning for worst-case scenarios.

We know that the tanker traffic has all but stopped. Oil prices are on a roller coaster. There's underlying market chaos and uncertainty, and what's more important is what it signifies. We've seen prices go up to 120. I've seen long-term planning up to 150. The Iranians have said they want to see it at $200. So there's a lot for us to talk about. We heard yesterday that the SPR, the Strategic Petroleum Reserves, for the 32 countries involved would be released over time in response to this. 

I'm going to start with you, Raad, and then go to you, Jason. Raad, you and I were talking in the green room about how the fact that it's just being released is telling us something about how much thinking went into worst-case scenarios. Do you want to talk a little bit about the strategic petroleum reserves and what it means if they're being released? 

Raad Alkadiri: Sure. And thank you very much for having me. It's a great pleasure to be here, and thanks to the Council. What we were talking about was how much this sort of shows a gross lack of planning and a certain amount of political failure on the part of the White House and the administration in dealing with this issue of starting a war and not anticipating the consequences.

The SPR release, the size of the SPR release, 400 million barrels, gives you a sense of the level of disruption that's actually occurred. But in many ways it was entirely predictable. The notion that Iran was just going to sit back when facing an existential threat from the Israelis and the United States and not use all the tools that it had in terms of asymmetric warfare seems a little fanciful.

As you look at the vulnerability of the Strait of Hormuz in the Gulf, and the centrality that it's played in terms of US planning in the Middle East and US energy—going back to the 1970s OPEC Oil Embargo, 1980s and the Carter Doctrine, which was designed to ensure the smooth passage of energy from the Middle East to the United States—the notion that it's taken 12, 13 days for the SPR to be released does suggest that there was no anticipation on this administration's part that the Iranians would try and block the Straits. Or at least the threats that the Iranians have made in the past weren't taken seriously. Now, that points to a certain degree of dereliction in contingency planning.

It goes against what's been a standing fear in energy markets generally, and in the United States in particular, for almost 50 years. To step back, what is this about? This is about disruption. This is about dealing with a massive disruption.

Whether it's the greatest in the history of all markets or not is probably debatable, but it's huge. It's 20% of oil and products. It's 20% of LNG flows. It's something that could and should have been anticipated at the start, so that signals could be sent out to try and calm some of the market fear and some of the market volatility, as opposed to playing catch-up.

RB: Thank you. Jason, just in the green room before we jumped in, you were noting the big news coming out that the Iranians get a vote in this. The Iranians have made it clear that the Straits will stay closed until they decide. Are you surprised by that? What are some of the knock-on effects?

Jason Bordoff: Not surprised. The idea that this would be easy in the way that removing Maduro was, and a somewhat compliant vice president, if that was some of the thinking behind how this would play out, was unlikely to be the case. Your friend and mine, Megan O'Sullivan, and I had a piece in December in Foreign Affairs about why we thought in a world of a collapsing geopolitical order, great power rivalry, and competition, there was no reason energy would not be a weapon and a source of vulnerability, much greater than we've seen even in recent years. 

Similarly to what Russia did to cut off gas supplies to Europe in 2022 after invading Ukraine. This has been a source of protection for Iran for a very long time. The fact that Iran has the potential to cause the kind of damage that it is inflicting right now has been the mother of all nightmare scenarios for people who think about energy security risk globally and plan for worst-case scenarios.

It was the idea that the Strait of Hormuz would be mostly, if not entirely, closed to traffic. As you said, 20 million barrels a day of crude and product, and a hundred million barrels a day market. Some of that is finding other ways to market now through pipelines, but somewhere around 14, 15 million barrels a day, ballpark, is still disrupted.

In percentage terms, that is the largest supply disruption we've ever seen. The Arab Oil Embargo in 1973 was about 7% of world supply. The Gulf War was about 6% of world supply. So it is really something we haven't seen at that scale before. We should remember too that this, the Strait of Hormuz, is about everything in global shipping.

You're talking about metals, fertilizer, and natural gas. Qatar, in particular, accounts for about 20% of global LNG trade flows through the Strait of Hormuz. We don't talk about that as much in the United States because US natural gas prices are mostly insulated from shocks to world prices.

But in Europe and Asia, that is a pretty big deal. So this is a weapon that Iran has, and it is being wielded, and there is no policy response that can effectively cope with the loss of 12, 13, 15, 16 million barrels a day of global supply. You will see headlines like the International Energy Agency Collection of Countries agreed to release the largest-ever release of strategic stockpiles in history.

What really matters is how much of that they can put into the global market every single day. And there's a limit to that. The US has never, in recent history, produced more than 1 million barrels per day. The Trump administration says it'll do a million and a half. Typically, the US does around half of the global total. Even if the rest of the world does more, you're talking about three, four at most. I don't know, Raad, what you think? But you're not talking about 13, 14, 15 million barrels a day. Then there will be a bunch of other policy ideas that people throw out there, like the Jones Act and other things. These are either not effective or not particularly good policy ideas, or both.

We could talk a little bit about the broader implications of this if it goes on, but I'll make one last observation, given everything we just said. It is kind of remarkable that oil is only a hundred dollars a barrel. It was more expensive when I worked in the Obama White House. The kind of scenario we're talking about is the one where people plan for 150, $200 a barrel, and there's some extra spare capacity, some strategic reserves. 

The market was a little bit loose before this all happened. We were already expecting oversupply this year, but fundamentally, I don't understand why it would not be a much higher oil price. For a market expectation that this results in a taco outcome, whereby President Trump finds a way out, claims mission accomplished, claims victory, and finds a negotiated settlement to bring this to an end soon. If this goes on for any extended period of time, oil prices will go significantly higher from here, with all of the economic and political ramifications.

RB: Picking up on that, I was struck by the piece that you wrote with Erica Downs in Foreign Policy, and it was just in your lead where you said energy markets had become complacent about Middle East risk. Which I thought was just so beautifully captured, and I was wondering if both of you could talk about what you meant by that. 

I think what you mean is about the resiliency of the overall system, and so we've become complacent. What did you mean by energy markets to become complacent? And Raad, I'm wondering if you could pick up on that. Did Middle Eastern Gulf producers themselves become complacent? Jason, can you fill in that beautifully worded line for us? 

JB: Megan and I've written a lot about this, too, but in general, over a period of a decade or two, at least globally, policymakers became relatively complacent with energy security. It was less a topic of conversation among policymakers.

We had relatively flat power demand in the United States. We had a shale revolution that brought unprecedented new supply to the market. More than 90% of the growth in global oil demand was met by the United States alone. With some hiccups along the way, we had a period of relatively stable oil prices. In general, people took energy security for granted.

With the Middle East, and the Gulf in particular, in the way we think about energy security, the policy toolkit we had to deal with was very much framed by the trauma of the 1970s. But since that time period, the Gulf producers—Qatar for LNG, Saudi Arabia for oil, and the UAE—have been some of the most remarkably reliable and dependable suppliers one could imagine. The incredibly rapid timeframe in which Saudi Aramco brought back online this key oil facility after an attack in 2018-19 was quite remarkable. 

The investments they've made to build pipeline capacity to move oil around the Strait of Hormuz to the Red Sea are being used today; they've paid a premium, and they've invested in resilience to be a reliable supplier. It's been actually quite impressive and through no fault of their own or the Qatari's fault, people may not quite look at supply from the region with quite the same level of reliability. We are being reminded that it's exposed to factors beyond its control.

RB: Raad, do you want to pick up on that? The reputational effects of buyers now seeing that maybe they are vulnerable could factor into how we think about the future. Would you start with did the Gulfies themselves become complacent, or were they always on this? What's their take now, given the situation they're in?

RA: I don't think the Gulfies ever became complacent about this. They are prisoners of geography, so at a certain point, you have to work with what you have. As Jason pointed out, they've taken steps to try to make sure that in the event of this kind of closure, they could move crude through alternative sources.

So Abu Dhabi is looking to move crude south of the Straits, and the Saudis are moving it to the Red Sea, but for some of the other countries, it has been more difficult. Kuwait and Iraq are stuck where they're stuck. Similarly, as is the case for Qatar and LNG. So I don't think you can accuse them of being complacent.

Jason mentioned Abqaiq, which was a reminder on a whole host of levels. That's the reason the Gulf states lobbied with the Trump administration not to launch this war. There was an appreciation that they may get targeted, and there was an appreciation that oil was an obvious vulnerability.

Again, something that Abqaiq in 2019 actually showed. From a market perspective, there's another factor in that you've had conflict in the region, and it hasn't really hit oil and gas for a long time. I'm old enough to remember when the Israelis first used fighter jets against targets in the West Bank, and oil markets jumped. I remember traders calling me up and going, "Are we going to get another embargo?" So that legacy of the embargo, the toolkit that Jason mentioned, has been there, but it's gradually receded.

There was a certain amount of false confidence brought in from the events of last summer, from the 12-Day War and the fact that Iran didn't actually move against energy targets when there was a fear, at the time, that they would. Arguably, that's where the market is caught, to Jason's point about prices. They're being dragged, kicking and screaming, in some ways, into the 21st century and into the 2020s. To realize that this is a different reaction environment from the Iranians, and the nature of the battle is different. This is existential for Iran. You don't go and threaten the survival of the Iranian regime and expect it to just sit back and go, thank you very much.

As we move forward, in terms of the legacy, Abqaiq had an impact, but not much. This one is going to leave a legacy. If we go back to that toolkit: 1973 has framed—and believe the Iraqi-Iranian War and some of the disruptions during the Iraqi-Iranian War as well—how the market looked at political risk in the Middle East for probably 30, 35 years afterwards.

There were a whole bunch of times when people cried wolf, and nothing happened. This time, something very significant has happened, and the longer it goes on, the deeper the scars will be. The longer the legacy and the risk premium are going to be, and that sensitivity to events in the Middle East. Let's face it, this instability isn't going to end when the bombs stop flying. You're talking about a Middle East now that's being transformed, and not necessarily for the more stable, irrespective of eliminating an Iranian regime or weakening an Iranian regime that has been nefarious.

The regional dynamics in the Middle East, changes in balances of power, rarely play out peacefully. All of that instability is going to go along now with the market that's just seen how bad things can get, and we'll continue to remember that. 

RB: I've just been seeing some Arabs in the region imagining their future of a transition underway, but one that is highly unstable, and what that will mean for their own situation in the markets more generally. 

To back up a little bit, let's talk through what some of these impacts are, more broadly. Jason, you've mentioned your work with Megan O'Sullivan. For the audience, Jason and Megan were among the first to point out our dependencies on critical minerals and the whole ecosystem that goes behind the energy transition.

You're thinking a lot about broader winners and losers. There's a lot of talk out there about China being "the big loser" and Russia "the big winner," but you have a different take on that. Can you talk through that a little bit? How are the Europeans seeing this? As you were saying, they're feeling those gas prices really fast and are starting to rethink their own energy transition.

Maybe start with these big winners and losers. Then, Raad, I've seen you talk about how difficult it may be for Iraq, in particular, to come back online just because of the age and the situation. If it has to shut in some of its production, what does that mean for Qatar in terms of coming back on?

Jason, if I could turn to you about some of the more macro wins and losses, and then Raad, also in the region and beyond, who wins and loses.

JB: There's obviously a bunch of related topics in what you threw out about how it affects Europe, Russia, and China. Oil, gas, the Gulf, and I just wanna say thank you for what you said at the top, too, which was a compliment, not to me, but to the remarkable team of scholars that we have at the Center on Global Energy.

To the extent I have anything thoughtful to say, it's because of Richard Nephew, Karen Young, Ira Joseph, Anne-Sophie Corbeau, Tatiana Mitrova, and Erica Downs. A whole team of phenomenal people, which is really helpful because these are such cross-cutting issues, and it does require bringing expertise in so many different dimensions together on oil, gas, sanctions, and the Gulf, but also those other countries you mentioned.

Tying it back a little bit to some of the big themes that Megan and I have been writing about in Foreign Affairs for the last four or five years. One was the idea that there was this optimism that a rapid transition to a clean energy economy was going to make energy geopolitics a thing of the past.

What we wrote about early on (and we're not the only ones) was the idea that energy transition, and we're barely having one by the way, but to the extent one starts to gather pace, is going to be one of the most geopolitically disruptive. Not to say we shouldn't have one, but it raises a whole host of potential geopolitical risks.

We've written a couple of times about why the Gulf states, in particular, the OPEC states, would probably become more important before they became less important. This is a reminder that energy geopolitics is alive and well. The shale revolution has really transformed American energy for sure.

The US imported 60% of its oil a decade ago, and today exports four million barrels a day on net. But I don't know if you need a better reminder than this crisis—which would ultimately matter to the price consumers pay at the pump or businesses pay for diesel—is set in a global market. Regardless of whether you're a net importer or exporter, you're still exposed to that global price.

The best thing we could do to increase our own energy security is to reduce how much we use, not just produce more of it. That is something that has happened over the last several decades. Since the 1973 Arab oil embargo, US GDP has grown fourfold. Oil demand hasn't changed very much, and so the oil intensity of the economy has declined.

It is also the case now that we're a huge net exporter rather than a net importer. That means the impacts of an oil price shock are different. It's more of a distributional effect than it is a macroeconomic effect. The increased spending by consumers and the reduction in their effective wealth for other things are not flowing abroad. It's flowing to American producers, and Trump acknowledged that on Truth Social today in a post saying, "We're the largest oil producer in the world, so we make a lot of money out of this." President Trump and Secretary Wright talk about how high oil prices might be good for the 1% of producers, not the 99% of consumers. And today we know who's benefiting from that. 

The last thing I'll say is we've been writing a lot about how we are being awoken, and 2022 and the Russia crisis helped with that. Sitting in Europe where I am now, awoken from that complacency, that sort of collective amnesia about the risks to energy security.

I don't want to be Pollyannish about this. Every time oil prices go up, people say it is a reminder of why we should switch to clean energy and use less oil and gas. But the largest reduction in fossil fuel intensity in the economy came not in the decade after the Paris Agreement was signed, but in the decade after the Arab Oil embargo. It was a collective shock to the American system that drove policymakers to push oil out of the power sector and to reduce its use in transportation through fuel-economy standards and speed limits. It's especially true for an importing region like Europe, which was already thinking about this before.

In a world where energy security and the risk of energy weaponization are much more top of mind for policymakers than in the past, it's an added motivation, beyond talk of a transition, to do something to reduce your risk and exposure to volatile global markets. Reduce trade and energy imports, which, again, here in a place like Europe, are oil and gas.

That's what China's strategy has been for the last 20 years. 30% of their economy is electric, compared with 20% globally. I'm not saying they don't care anymore, but it's more electrified. They've had a very intentional strategy to electrify more of their economy and reduce imports. As a result, half of their new cars sold are electric, and they generate more of that electricity from domestic sources. That's coal and renewables. They also built up a billion-and-a-half-barrel strategic reserve while we were selling off our strategic reserve to use it as a piggy bank for other things. We thought that with the shale revolution, we didn't need it anymore. 

Today's conflict, not that they won't be harmed by higher prices, but validates the policy approach they have taken. The things that have made Europe hesitant to move in that direction are that it would increase its reliance on China. Solar panels, EVs, critical minerals, and batteries—the clean electrification economy means you're more dependent on China. 

China may be thinking there are risks. European policymakers may be thinking that perhaps there are risks to being dependent on China. But it turns out there are risks to being dependent on Russia. There are risks to being dependent on the Gulf. They're even worried about being dependent on America now because of the way they've seen the US use economic tools of coercion. There's risk everywhere, and maybe as a comparative basis, China looks a little better today than it did yesterday.

RB: Raad, how are the Middle Eastern states thinking about this transition? They, too, have been undergoing considerable transitions: investments in solar and nuclear. I'm also struck by these pipelines we've been talking about. They dump into the Red Sea. They dump into South of Oman, which has just been targeted.

So these infrastructure plans are also quite vulnerable. How are they thinking about this transition and their role in this, and what does it mean for each of the states? I'm struck by the reputational effects. Everything that they were working on for the past couple of decades has been to mitigate these reputation effects, and it's now being brought back to the center. How are they thinking about their current vulnerabilities, in terms of infrastructure, the ability to bring it back online, and what it means for others' reliance on their exports going forward? 

RA: I don't think there's clarity of thought as of yet. We're in the midst of a crisis. It's been going on for 13, 14 days. Its endgame is unclear, and this is a crisis that they have seemingly very little agency over. 

For the Gulf States, initially, it's going to be a wait-and-see in terms of the outcome and what it means for regional geopolitics, the balance of power, and the new priorities, or how that reorders priorities for Middle Eastern states.

But your point, going back to the longer term on economic diversification, is an important one. The Gulf was doing an exceptionally good job positioning itself as a stable and reliable destination for investments. Certainly, that appeared to be improving over the past few years and expanding out of the traditional centers of Dubai and Qatar, to move more broadly to the region.

In an effort to try and attract, particularly, AI data centers, and to use an energy transition within these countries to use solar, to take advantage of some of those benefits, they've allowed themselves, one, to change the energy mix domestically and to free up more oil and gas exports nationally.

The key to all of that is these are long-term investments, just as the region was starting to become a focus again, and particularly countries like Iraq. There was a focus again on upstream investment. Similarly, this was a region that was on the cusp of really trying to present itself as something new. The question goes back to what the lasting legacy of this war will be. For a two-week conflict, think about how quickly the events of last summer have been forgotten, and seemingly weren't taken into account as we moved into this conflict.

It will be one of those blips, and particularly with fast news cycles, will move into something else. There's going to be an underlying risk premium attached to investment in the Middle East. It's going to depend. I go back to this issue of what the geopolitical circumstances and balance of power are afterwards. Taking Iran out of the equation is all well and good, but that vacuum will be filled in terms of regional influence and power. There's going to be competition over that. It's rather naive to believe that suddenly you're going to have a kumbaya moment in the region and everybody's going to live happily ever after.

There are concerns over Israeli policy and strategic intent, and whether Israel is becoming a more aggressive actor in the region and one that's seeking hegemonic power. There have already been tensions between the Gulf states over their relative strategic alignments and some of the policies that they have been pursuing regionally. Turkey clearly has aspirations to influence its own neighborhood and its strategic depth. All of these spheres of influence start to overlap, and those overlaps will be points of tension. The most vulnerable states are going to be the ones that are weakest: Syria, Lebanon, Iraq, potentially Iran as well, and particularly countries where you have ethnic divisions and sectarian divisions that also fray the political fabric. 

That's going to be the region's biggest problem in the long term. This is going to be the shock that brings back what Jason and Meghan have been talking about for a while. That brings back this sense of above-ground political risk in the Middle East. What's going to perpetuate it is if we don't immediately come out of this with the stability and peaceful outlook that some people have been heralding, and that the administration has been pointing to, to get rid of Iran, and the problems of the Middle East disappear.

But actually, we just move on to a different set of battles, a different set of challenges. The types of investment you're talking about, the tens, hundreds, billions of dollars in AI, data centers, new energy, et cetera. What companies want is certainty. Traders love volatility. So if prices go up and down, traders can make money on it. What companies—particularly companies that put physical assets in place—want to see is continuity. Stability in terms of political stability, legal stability, investment stability, and the ability to know that when you make these large investments, you are going to be able to recover those investments and make money on them.

The Middle East, right now, certainly may not be that region. That's going to be a significant step back, given all of the progress that they've been able to make over the past five to ten years. 

RB: I'd like to pick up on the point you were making about it being only a matter of time. If it's two weeks, that's one thing. If it's longer, it's another thing. Even in two weeks, we'll have a memory of what is possible, but that it does matter. 

There is a question in the chat about Japan releasing its SPR, its reserves. I think the SPR is supposed to last about three months or so. What timeline are we looking at? Jason, you were raising that. Do you have a sense? We're two weeks in, the oil markets are jumpy, but at what point do supply chains factor into this? At what point does the continued release of energy onto the market actually serve to make? Analysts are nervous about the fact that it is perhaps not moving the needle. How do you break down the timelines on this? 

JB: The starting observation I would make is we had headlines of the largest ever release of strategic stockpiles in the world, 400 million barrels a day, when I worked in the White House. There was a civil war in Libya, and the International Energy Agency, led by the US in that case, released 60 million barrels.

Whether it was a good idea or not, we could debate another time, but just giving you a scale. Joe Biden released 180 million barrels after Russia invaded Ukraine. That was a historically large release. With 400 million barrels, oil prices went up $10 that day. The market wasn't comforted by this. That was a reflection of what I said before about the scale of this. The Strait of Hormuz can't be dealt with by any policy response. There's not a tool in the toolkit that can cope with something that large. There were very few details released, frankly, other than by Japan about exactly how this would be implemented, who would do what, which country would do how much over what timeframe.

Eventually, the US administration said it would do about 180 million barrels a day. So that's a little more concrete, but it highlights the scale of the challenge relative to a tool in the toolkit like that.

Coming back to what I said before, I don't see any reason why oil prices won't go significantly higher from here if people start to believe this will go on for an extended period. The Trump administration will not try to find a way out, a negotiated settlement. Every signal we're seeing from the new Iranian leadership from Israel suggests reason to be skeptical that that's going to be possible.

Others have a vote in how this ends and how long it goes on. I don't see a reason why oil prices wouldn't be headed up from here somewhat significantly. But Raad, tell me if you agree or disagree?

RA: No, I agree. I agree completely. In terms of timing, what's a good outcome now? Probably the end of the week. Jason's point is that it's important to realize that just because you announced large numbers, there's a huge difference between that and actually getting that oil onto market. And this is not a crisis that's about sentiment.

In fact, as Jason's pointing out, the sentiment is oddly far more benign than the scale of the actual supply disruption. The sentiment remains that this will be a partial interruption. Everything goes back, everything is hunky dory, within a week or so, maybe a little longer.

This is huge volumes of oil that are going to be missing from the market. And there's a second part to this as well: Saudi Arabia has always positioned itself as the central bank of oil. That has meant that at a time of crisis, the Saudis have invested hundreds of billions of dollars over the years to keep spare capacity in the ground for precisely this kind of disruption.

The problem is that the spare capacity is in the ground. That spare capacity can't really be moved because of the Strait of Hormuz. Abu Dhabi is the same. The bits that were there in Iraq. The bits that were there in Kuwait. The places you would normally go in a time of crisis. Jason mentioned Libya. The Saudis were able to move quickly when Libya happened to comfort the market by releasing more barrels and making those promises. Promises from the SPR make for great headlines and shiny numbers, but the reality, on a day-to-day basis, with getting that oil to market, is going to be problematic. Getting the right oil in the right places and moving it around is going to be problematic. That takes time. 

That's also another thing about some of the curtailments you're seeing. The Saudis have announced curtailments. Kuwaitis have announced that Iraqis have curtailed over 3 million barrels per day at this time. Oil fields don't just switch on and off. Again, the Saudis are very, very good at getting production back up quickly, but particularly when you start to get older oil fields, they take time. In Iraq, when you had even partial curtailments in the past, it could take three or four weeks for production to start getting back.

It could take a couple of months for it to be back on a steady basis. You already have a tail in this market that's going to play out. The SPR is 3 million barrels a day. That covers Iraq. How do you cover the rest of it and the other bits that are missing?

Anything longer than that, and I totally agree with Jason here, the market's going to catch up to this. Consumers and the global economy can be glad that the market is a little bit sleepy and a bit trusting at this moment, because the economic and fiscal consequences could be much more severe.

The bit that we may come back to look at, oddly, may not be about oil or gas. It may actually start to be the impact on food costs because of fertilizer. As Jason mentioned, a whole bunch of other commodities that go through the Gulf, and the kind of impact that this may have on particularly indebted developing world states, is going to be another shock to the system. It's going to impact interest rates, or certainly hopes that interest rates will be reduced anytime soon. It's those impacts that start to feed into the global economy and that aren't necessarily gonna be felt in the United States or in Europe, but will be felt further afield. 

We saw with the Ukraine invasion that those sorts of tails tend to run very long and can be very pernicious and very disruptive in terms of the developing world.

Anything over the end of this week and into a third week, certainly into a fourth week, the market is going to have to take seriously that these disruptions are here to stay. Also, the SPR will be entirely insufficient to cover the supply gap.

RB: So weeks, not months. I feel like we're just getting started, and yet we're at time. Thank you, on behalf of the Council. I think one of the takeaways from this conversation is that energy isn't just affected by the conflict. It's one of the main strategic battlegrounds, with knock-on effects and long-term effects that we will be grappling with for years to come. 

I'm grateful to the two of you for taking time out of your busy day to speak to the Chicago Council audience. Raad and Jason, huge thanks, for me and on behalf of our audience.