Global Energy Supply Shock Cuts 20% of Oil and LNG Flows at Strait of Hormuz

The U.S.-Israel conflict with Iran has blocked about 20% of global oil and liquefied natural gas shipments through the Strait of Hormuz, according to @FortuneMagazine reporting. The disruption has produced immediate effects in multiple regions. Bangladesh has introduced gasoline rationing.

Farmers in parts of Africa report fertilizer shortages. Motorists in the United States face higher pump prices.

The United States has become the world’s largest exporter of liquefied natural gas and briefly surpassed Saudi Arabia as the top oil exporter during the conflict. Prior to 2015, U.S. crude exports were largely prohibited under rules dating to the 1970s Arab oil embargo.

Charif Souki, founder of Cheniere Energy, told @FortuneMagazine that the country has assumed the role of energy superpower and that this position will persist.

Clean energy sources now account for nearly 40% of global electricity generation. When transportation, heating, and industrial uses are included, their share of total energy consumption falls to 20% or less. India, South Korea, Indonesia, Thailand, Vietnam, and the Philippines have extended the operating life of existing coal plants.

Electric-vehicle sales have risen in some markets. In China, EVs account for more than half of new-car sales.

The United Arab Emirates has announced its departure from OPEC, leaving the cartel with its five founding members plus six African producers. The UAE cited production limits and tensions with Iran and Saudi Arabia. Saudi Arabia has used its East-West Crude Oil Pipeline to reroute exports through the Red Sea, limiting further price increases.