A New Phase.
Energy Common Sense.
One of the very best Substack newsletters on the subject of energy is Carolyn Kissane’s “Energy Common Sense.” This from her LinkedIn profile:
I lead and teach with curiosity, and a conviction that energy is at the heart of every global story. As Associate Dean and Clinical Professor at NYU’s Center for Global Affairs, I’ve spent two decades teaching, researching, and writing about the intersections of energy, geopolitics, and climate security. My work explores how policy, technology, and markets intersect, and what that means for economies, societies, and the future of power itself.
I oversee two dynamic graduate programs, the MS in Global Affairs and the MS in Global Security, Conflict, and Cybercrime, and I’m deeply committed to creating the best possible opportunities for our students. Whether through global field intensives, consulting practicums, research collaborations, or mentorship, I work to ensure they graduate prepared to lead in complex, rapidly changing environments.
I write and speak frequently on energy, security and climate for outlets including Barron’s, CFR and Project Syndicate…My Substack, Energy Common Sense, is where I unpack the week’s big stories in energy and global affairs with context, clarity, and candor. Follow along for insights that connect the dots between energy, policy, and power. (Source: linkedin.com)
Regarding her Substack, my advice is simple: subscribe. Pay up. It’s well worth it.
What follows is her most recent post (3/19):
Monday, oil opened a few dollars above $100; today, oil is now trading above $115–$119 per barrel. LNG prices are surging sharply across Europe and Asia; diesel has moved above $5 per gallon in the United States. Gasoline is pushing toward $4, and jet fuel is rising even faster than crude. This is not one market moving; it is the entire energy complex repricing at once. Crude feeds products, products feed economies, and natural gas underpins power systems. When all of them move together, there is no buffer left in the system. This is why this moment matters.
What is driving this is physical disruption. Qatar’s LNG infrastructure is offline, the Iranian South Pars field was struck by Israel, and there have been targeted energy infrastructure attacks on Kuwait, Oman, and the UAE, and attempts to take down Saudi energy production. The Strait of Hormuz is effectively constrained, allowing only tankers bound for China, India, and Turkey, thereby removing a critical artery for oil and gas flows. Roughly a fifth of global energy supply is now either offline, delayed, or at risk. This is the jugular of the system, and it is being hit directly. When supply is removed at this scale, prices do not adjust gradually; they rise sharply because there is no immediate replacement.
And this is no longer just about flows; it is about production. Even if shipping resumes, nearly three weeks of backlog cannot be cleared quickly. Tankers are delayed, cargoes are floating, and insurance has fundamentally repriced risk. More importantly, production itself has taken hits that cannot be quickly reversed. Wells shut under pressure take time to restart, damaged facilities require repair, and in some cases, production has been curtailed because there is nowhere for it to go. Storage is finite, logistics are broken, and the system is no longer operating as a continuous flow but as a constrained network under stress.
This is why this is not a short-lived spike. This is now a multi-month, likely rest-of-year story of elevated prices and elevated risk. The damage is physical, and physical systems take time to rebuild.
Asia is where this hits hardest. LNG has been the backbone of power generation across much of the region, with Qatar as a central supplier of flexible gas. Remove that supply, and there is no immediate substitute. Countries like Japan, South Korea, Taiwan, Pakistan, and Bangladesh rely on natural gas for a significant share of electricity, and LNG has no strategic reserve equivalent to oil. This means the adjustment is not simply higher prices—it becomes about allocation, rationing, and difficult political choices. Power systems come under pressure, industrial output slows, and the economic impact begins to spread outward.
The United States is more insulated, but not immune. Domestic production provides a buffer, but energy is globally priced, and higher oil and gas prices are passed through directly to diesel, gasoline, and jet fuel—into transport, logistics, and food. Inflation will rise, not as a sudden spike but as a persistent pressure building through the system. This is how energy shocks embed themselves across the economy.
What is increasingly clear is that this is no longer just an energy story; it is an inputs story. Helium supply disruptions from Qatar are beginning to affect semiconductors and fiber-optics, slowing data center builds just as AI demand accelerates. Fertilizer costs rise with natural gas, feeding into agriculture and eventually food prices. Even wiring, materials, and industrial inputs tighten as energy costs surge. The system is under pressure across multiple layers at once, and the effects compound over time.
And the longer-term ripple effects are already forming. In many import-dependent economies, diesel price shocks are among the most politically destabilizing forces because they hit transport, agriculture, and basic goods simultaneously. Governments rely on subsidies to manage this, but as prices surge beyond what was budgeted, those subsidies become fiscally unsustainable. The result is a set of impossible choices: cut subsidies and risk unrest, or maintain them and strain already fragile public finances. Fragile states are pushed closer to failure, and even more stable states become more fragile under the combined weight of inflation, fiscal pressure, and public discontent.
Policy responses are underway, but they remain limited given the scale of the disruption. The 60-day Jones Act waiver provides greater flexibility for domestic fuel movement in the United States, which may ease bottlenecks and marginally reduce costs, but it does not replace lost global supply. Strategic reserve releases can buy time, but they are finite, and this crisis is not just about flows; it is about production and infrastructure.
Which leaves the harder question of stabilization. Richard Haass offered a different proposal: an “Open for All or Closed to All” approach in the Strait of Hormuz that reflects the reality that partial disruption is already destabilizing the entire system. There are no easy answers, only trade-offs and risks.
What is clear is that the war has entered a new phase, wider, bigger, and more costly, not just militarily, but systemically. The economies of the Gulf will see hits to their economic trajectories and GDP. When the most concentrated chokepoints of global energy systems are hit, the consequences cascade outward.
This is not just volatility in the energy markets; it is structural stress. Prices are rising because supply is physically constrained, and that constraint will not be quickly resolved. Asia will feel it first and hardest, but the impacts are global. Inflation will rise, supply chains will tighten, and the effects will move beyond energy into food, technology, and political stability.
And as Brad Setser from CFR put it, “There is going to be a pretty big shock, the kind of shock that might lead to something close to a recession—if there isn’t a resolution in the near term.” What we are seeing in prices today reflects that tension: a market caught between two possibilities, either a rapid de-escalation and reopening of the Strait, or a prolonged disruption that pushes the system into something far more severe.
Right now, the balance is shifting toward the latter. (Sources: carolynkissane157206.substack.com, richardhaass.substack.com, youtube.com)
Ms. Kissane’s post is republished in full with her expressed permission.
Thanks for the introduction. Terrific