The Energy Crisis: Downstream Impacts || Peter Zeihan

TL;DR

Global energy markets face cascading consumer-level shortages as Persian Gulf and Russian oil disruptions eliminate supply for Asia and Europe simultaneously.

Key Points

• 1.Asia is already experiencing rationing and black markets after five weeks of disruption. Half a billion barrels of crude haven't reached market; India avoided an oil crisis but lost propane supply for ~50% of its population, while Korea, New Zealand, Thailand, Taiwan, the Philippines, and Vietnam face active shortages.
• 2.China is coping by halting fuel exports rather than facing a domestic crisis. Its overbuilt refinery capacity allowed it to absorb crude and export refined fuel, but cutting those exports has triggered shortages in countries like Australia and New Zealand that depended on Chinese refined products.
• 3.Europe's crunch begins now, with Russian oil becoming a non-factor within three weeks. The last pre-war Persian Gulf tankers arrived this week; a loophole allowing Russian crude to be refined abroad and re-exported to Europe will also close within weeks, compounding the supply collapse.
• 4.The Trump administration's sanctions removal on Russia and Iran erased 5–15 years of economic isolation efforts. Lifting sanctions on crude already at sea made Iranian oil effectively legal again and broke existing containment frameworks, requiring any future isolation effort to restart completely from scratch.