Lessons from the crisis

The US-Iran conflict demonstrates the need for diversification in several senses of the word. It also exposes the limits of Washington applying pressure on major oil and gas producers it considers geopolitical adversaries

Beyond the immediate turmoil that the US-Iran conflict and the closure of the Strait of Hormuz has inflicted on oil and gas markets, it is worth assessing how what the IEA has described as the worst energy crisis in history may drive long-term shifts in policy. The first lesson is that diversification of supply, while still the key to ensuring energy security, is a more complicated challenge than some policymakers might have assumed. The current shock has exposed not only the risks of dependence on a single supplier, but also the dangers of dependence on a single route, an overly short-term approach to procurement and certain political assumptions. In terms of LNG, production is heavily cent