Why Global Oil Prices Haven’t Surged Despite Strait of Hormuz Supply Disruptions

The Strait of Hormuz, a critical chokepoint for global oil shipments, has been closed for months. Yet, as of late Tuesday, oil prices remain below $110 per barrel. This raises a pressing question: Why haven’t markets responded more dramatically to what is arguably the largest supply disruption in history?

On the latest episode of Shift Key, host Robinson Meyer engages in a deep discussion with Jason Bordoff, founding director of the Center for Global Energy Policy at Columbia University’s School of International and Public Affairs. Bordoff, also a co-founding dean of the Columbia Climate School, previously served as a special assistant to President Obama and senior director for energy and climate change at the White House National Security Council.

The conversation explores whether the current crisis will permanently reshape the global energy system, what a new climate and energy consensus might look like, and whether Democrats should prioritize climate politics in their agenda.

Key Takeaways from the Conversation

Global Energy Security and U.S. Leadership

Robinson Meyer opens the discussion by asking Bordoff about the most overlooked risks in the current crisis:

Robinson Meyer: What’s the risk that you’re most worried about in the current crisis that you feel like maybe isn’t getting enough play? In some ways, the lack of any progress since the ceasefire was put into place has meant that we kind of have talked about everything. But I don’t know, is there something that in your mind, whenever you encounter it, you’re like, Oh, that’s a big deal, and people don’t realize how big a deal that is?

Bordoff highlights the erosion of global cooperation and America’s diminishing role as a trusted partner in energy security:

Jason Bordoff: I mean, whether it’s tariffs, or Greenland, or Venezuela, or this — and I could list other examples, too — I think global cooperation and America’s role as a trusted partner for countries around the world is a very important one. And that’s true for energy security, too. If you’re really worried about 80%, 90% of lots of the parts of particularly clean energy supply chains, say, being dominated by China or critical mineral supplies, the only way to change that reality is to work in partnership with more countries: Europe and Latin America and Africa. And I’m worried that China has a strong desire to position itself as a reliable commercial partner in the world, contrary to the U.S. And I worry that conflicts like this one don’t help us counter that argument.

Energy Security and Isolationist Policies

Bordoff and Meyer also discuss the potential for energy-import-dependent economies, particularly in Europe, to respond to supply disruptions by adopting isolationist policies. Bordoff co-authored a piece in the latest issue of Foreign Affairs with Meghan O’Sullivan of Harvard, examining this very issue:

Jason Bordoff: If you’re more worried about energy security, and particularly you’re an oil- and gas-import dependent economy, say in Europe, a response to this could be, energy security comes from isolating yourself, becoming self-sufficient.

However, Bordoff cautions that such an approach may not be sustainable or effective in the long term, especially as global supply chains become increasingly interconnected.

About the Podcast Shift Key

Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap News. The podcast delves into pressing issues at the intersection of climate, energy, and politics. Episodes are available on Apple Podcasts, Spotify, Amazon, and other major podcast platforms.

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