NN #1: Protecting yourself from the Global Energy Crisis

The Strait of Hormuz has been closed to all but a very few ships for two months now, and although the markets seem to have a new justification every day for ignoring the mounting damage that the Iran war is causing to the global economy, there is no doubt that the damage is real, and growing every day. After all, this is the largest energy supply disruption in history.

The net supply loss due to the war has climbed to 13 million barrels a day (mb/d) according to IEA chief Fatih Birol, between the oil that’s not getting through the strait and the damage to much of the oil and gas infrastructure across the Persian Gulf producers. Figures on the loss of natural gas supply are much less available, but I have heard 20% cited numerous times for the loss of global liquefied natural gas (LNG) supply.

Those losses are piling up. The world is already looking at the loss of approximately a billion barrels of oil alone, even if the war ended and the strait reopened today. It will take years for the world to recover from this. And when it does, it will a different world than the one that existed before the war—one with structurally lower demand for fuels made from oil and natural gas.

Higher prices for oil and gas are going to be with us for a long time to come, as are the prices from everything that is produced from it. And that’s assuming you can even get those things. Depending on the thing, and where in the world you are, you might not be able to buy it at any price for months or even years to come.

Since the war began, I’ve been asked many times what people can do to give themselves a bit of buffer against those high prices and shortages. So I thought I’d start off this newsletter by offering a few suggestions.

What is made from oil and gas?

The list of things made from oil and from natural gas is astonishingly long. Aside from the fuels that are refined or produced from them directly, they’re also used as feedstocks to produce hundreds of everyday items.

Stockpiling fuels isn’t practical for most people. Gasoline and diesel can both spoil if they’re in storage for too long. The shelf life of gasoline is typically around 3-6 months without a stabilizer, and 6-12 months with one. Diesel has a shelf life of 6-12 months without a stabilizer and as much as two years with additives and proper storage. But not everyone has safe place to store those fuels in any significant quantity. Likewise for LPG. You can always keep an extra canister of propane around, but it’s generally not practical for most people to store much more than that. So as far as the fuels go, stockpiling doesn’t give you much protection against rising prices. And the flow of those fuels is so vast, and so globally interconnected, that even with the amount of supply lost so far, I don’t expect there to be much in the way of outright shortages except in very particular circumstances like an unhedged airline operating low-demand routes in Asia, or something of that sort. Most business and consumers should be able to get some fuel for the near-to-medium term, albeit at eye-watering prices.

What you can think about buying now is the other stuff made from oil and gas, especially if you have a strong expectation you’ll need it in the next year or so. Check out those links, and if you think you’ll need something on those lists, you might want to pick it up now. To be clear: I am not advocating hoarding or stockpiling. Those kinds of reactions tend to make supply availability worse without actually helping anyone (including the people doing the stockpiling). Remember the toilet paper frenzy of the early days of the covid lockdowns? Yeah, don’t do that. But if you expect to paint your house in the next year, or that you’ll soon need some new tarps or adhesives, or you plan to reseal your driveway, or even if it’s just getting time to stock up on medications, it would be better to do that sooner than later. Even medical providers are looking to build up buffers of their stocks of single-use medical supplies like syringes and latex gloves in anticipation of shortages.

Reducing your dependency

The best thing you can do for the long run, however, is to reduce your dependency on oil and gas.

The most obvious first step is to swap out your oil-burner for an EV. Demand for EVs has surged since the war began, but don’t let that stop you from joining the crowd now. I expect that prices for EVs will be broadly supported by the war throughout its duration and for some time afterward, although in the long run, I expect the increased demand to lead to lower prices as manufacturers ramp up production and competition heats up. But that’s your best and most direct way to reduce your exposure to high oil prices and even spot shortages. And if you haven’t shopped for an EV in awhile, you’ll probably be surprised to see how good the options are and how reasonable the prices are. They’re finally becoming real options for many consumers, with prices points, ranges, and features that will meet 99% of their needs. (And if you find yourself trying to argue that you shouldn’t buy one because of something in that 1% of your use-cases—that one trip you take to see grandma every year? Maybe ask yourself why you would let that stop you from avoiding having to buy fuel, and the very significant cost savings you’ll realize, by buying an EV. Usually there’s another way to meet that 1% case that’s very reasonably priced and no reason at all not to buy an EV.)

And if unfamiliarity is a hurdle for you, take my word for it that you’ll get over that quickly. Millions of people do every year. And nearly without exception they never look back. They love their EVs and wouldn’t even consider going back to an oil-burner. Because EVs are just better in every way. They’re quieter, smarter, more sophisticated, with better acceleration, lower (nearly zero) maintenance, and lower total cost of ownership. And the availability of charging stations is very workable for most people, even on road trips. Look around online and you’ll find endless resources to help you overcome any hurdle to EV ownership.

After a car, the next-best thing you can do is reduce your consumption of oil and gas in your home or business. If your space and hot water heating uses fuel oil or natural gas, have a look at a heat pump. There are a lot more models available now and they may be practical and affordable for you (although the range of fully installed prices is pretty large). Many places have incentives that will make one more affordable now, and again, you’ll ultimately save money in the long run by not having to buy fuel. Be sure to check for incentives and buyer’s guides provided by your local municipality or town council, state or province, and by various NGOs as well as federal sources.

That’s enough for an initial post I think. I do expect this new newsletter to be a work in progress that evolves over time, so if you have feedback to share, send me an email!

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Sources

Holly Ellyatt, “‘We are facing the biggest energy security threat in history,’ IEA chief tells CNBC,” CNBC, April 23, 2026.

“The Definitive List of 365 Products Made from Oil / Petroleum,” Bad Ass Work Gear, March 18, 2023.

“What Is Made From Natural Gas?” OFTRB, July 9, 2024.

Julia Kollewe, “From syringes to stents: Iran war exposes NHS dependency on petrochemicals,” The Guardian, April 26, 2026.