Editorial: The second-best time

If there’s one thing that dislocates a market, it’s armed conflict. The broader-based and longer-lived, the greater the dislocation. Coping with this dislocation requires a combination of market interference and sometimes unproductive (or even self-harming) political decisions. This is the case whether you’re an observer of said conflict or its initiator.

Demand for Russian crude has increased since the Iran war started. It stands to reason. The passage through which roughly 20% of global supply passes has effectively been closed. India is one of Russia’s biggest customers, but flows of oil between the countries had been at least partially stymied by US-led sanctions against the purchase of Russian barrels.

The US, however, has responded to the strait’s closure by granting a temporary waiver on India’s imports of oil from Russia, presumably to thwart or at least delay the worst of already occuring price increases. Other efforts to tinker with the market have included:

• The IEA coordinating a 400-million bbl release of reserves by its 32 member countries, including 172 million from the US.
• Launching a US government-backed reinsurance fund for tankers seeking to navigate the Strait of Hormuz.
• Suspending Jones Act restrictions and limiting US exports.

Let’s take these one at a time. The emergency reserves release would have been a drop in the bucket even were it to have happened simultaneously and instantly. As it is, each country gets to determine its own timing and method.

At $20 billion, the reinsurance fund falls dramatically short of the estimated need, which JPMorgan Chase & Co. placed in the hundreds of billions of dollars to fully cover the hundreds of tankers in the region.

What tankers are going to come here to move US crude from one domestic port to another? And how would removing more barrels from the open market lower prices?

It goes deeper

Aside from the difficulty getting crude oil out of the Gulf region, as of Mar. 16, 2026, production shut-ins were under way in Iraq and Kuwait, with S&P Global estimating that the global supply of crude oil and refined products available to the market had fallen about 17 million b/d since Feb. 27. QatarEnergy, the world’s biggest LNG producer, had already put its 77 million tonnes/year of capacity into cold shutdown before its plants were attacked. Energy infrastructure has been damaged across the region; including South Pars natural gas field, the world's largest. An even larger proportion of the world’s supplies of sulphur and urea—key fertilizer components—also passes through the Strait.

At the time of writing, spot West Texas Intermediate prices had risen 41%. And at the same time that we’ve made it easier for Russia to sell its crude, it’s been helping Iran with both military intelligence and advanced drone tactics learned over years of combat in Ukraine. And Iranian crude is still getting shipped to China.

There are many reasons to wrap this war up as quickly as possible. But among them, particularly in the context of the oil and gas industry, is the increasingly bright light it shines on which are the truly safe, cheap, reliable sources of energy.

More than a quarter of US electricity came from renewable sources in 2025, up from 10% the prior year, the US Energy Information Administration found. Nearly 80% of the power plant capacity planned here over the next decade is tied to renewable sources.

The best time to end this war was before it started. The second best time is now.