Following the era of “happy globalization,” the COVID-19 crisis, the invasion of Ukraine, the attack on Israel and its subsequent retaliation in the Gaza Strip, and, now, the war against Iran, a series of crises marks the world’s return to a period of intense turmoil.

This latest development is particularly unsettling because it affects the Arab-Persian Gulf. While the energy transition has begun in this region, it remains a highly sensitive area for the energy supply of a world that is still largely dependent on hydrocarbons. According to Fatih Birol, executive director of the International Energy Agency, this is already the most significant disruption to the supply of fossil fuels—oil and gas—in recent decades.

Beyond the threat to our economies, will this shock accelerate their decarbonization? To appreciate its significance and transformative power, we must view it within the long history of international energy markets—a history already fraught with setbacks.

Sixty Years of Oil Crises

The outbreak of a new major international crisis in the Middle East and the threats it poses to energy supplies and the global economy raise questions about the conditions that trigger oil shocks. An oil shock can be defined as a sharp (a doubling or even a tripling) and sustained rise in oil prices. Conversely, a counter-shock corresponds to a sharp and sustained decline.

The history of oil prices over the past sixty years can be analyzed as a succession of four major periods, as shown in the figure below.

• 1965–1973: Rising Tensions. In the 1960s, there was a very rapid increase in Middle Eastern production (a threefold increase between 1965 and 1973), with very low prices—around $20 per barrel in today’s dollars (or 17.30 euros). This caused demand to skyrocket, and producers struggled to keep up.

• 1973–1998, the era of shocks and counter-shocks: The Yom Kippur War between Israel and the Arab countries allowed the latter to gain the upper hand and unilaterally raise prices, leading to the 1973–1974 oil crisis. A few years later, the Islamic Revolution in Iran triggered another surge in prices on the emerging spot markets: this was the second shock of 1979–1980. This was followed by a decline in production in the Middle East (primarily from Saudi Arabia), before the counter-shock of 1985–1986 and a return to moderate price levels, despite Iraq’s invasion of Kuwait in 1990.

• 1998–2015: a gradual resurgence of tensions culminating in a third shock, this time driven by demand. In the early years of the 21st century, tensions reemerged, fueled by strong global growth and soaring commodity prices ahead of the 2008 Summer Olympics in Beijing. The subprime crisis in 2008 brought this trend to a halt. Prices plummeted but quickly rebounded to high levels, comparable to those seen after the second shock (around $150, or just under 130 euros, per barrel).

• 2015–2025: A New Equilibrium: A new equilibrium has emerged in the most recent period. Despite high production levels, particularly in the Middle East (one and a half times that of the early 2000s), and largely due to the emergence of shale oil and gas in the United States, the price remains within a range of $60 to $100 (more than 51 euros to 86.50 euros) per barrel.

Geopolitical events and energy shocks have thus occurred in rapid succession in the Middle East over the past few decades. They do not always occur simultaneously, but in 2026 the conditions appear to be ripe for a “perfect storm” in the energy markets: a major geopolitical event has occurred against a backdrop of high oil production levels. This is all the more significant given that it affects another market that has become strategic: the liquefied natural gas (LNG) market.

Natural Gas: From Compartmentalized Regional Markets to a Now-Global Risk

The history of natural gas, while less spectacular than that of oil, nevertheless reveals a profound transformation of the global energy system. Over the past fifty years, the natural gas market has evolved from a system of regional markets (North America, Europe, Asia)—governed primarily by long-term contracts—into a largely globalized market characterized by constant price arbitrage and now exposed to major systemic risks.

Its evolution can be divided into three major phases, each characterized by specific supply patterns, pricing dynamics, and levels of vulnerability.

• 1970–1986, the era of isolated markets: Until the mid-1980s, there was no global gas market. Natural gas was a regional commodity, constrained by inflexible infrastructure and long-term contracts. In the United States, prices were low because it was a continental market, supplied by pipelines and governed by federal regulations. In Europe, prices were higher because supplies relied on a mix of pipelines from the USSR/Russia, Norway, and Algeria, supplemented by a limited amount of imported LNG. In Japan, LNG is expensive, and Asian prices are the highest in the world. These three markets have little interaction with one another: no transcontinental flows, no connections between markets, and no international transmission of local price pressures. While there can be a global oil shock, there is not yet a global gas shock.

• 1986–2008: Relative Convergence— Starting in 1986, the structure of the markets began to change. The oil counter-shock led to a revision of contracting practices, the gradual rise of LNG trade, the opening of the first spot markets (i.e., markets where prices are set on a day-to-day basis), and the relaxation of trading conditions in certain regions. Prices in the United States, Europe, and Asia remained different, but their trends converged. This resulted from the growth of international LNG trade, the gradual standardization of infrastructure, and the spillover effects of an oil market that had become more volatile. However, this period was not uniform. In the United States, spot markets experience very sharp spikes due to transportation constraints and regional limitations on storage or production capacity. Despite these regional fluctuations, gas prices reflect greater consistency on an international scale.

• 2008–2025: Despite the Rise of LNG, Divergences Resurface: The third period begins with a structural shock—the shale gas revolution in the United States. Within a few years, the abundance of unconventional gas causes U.S. prices to plummet. And starting in 2016, the United States became a major exporter of LNG. At the same time, Asia experienced a period of tension following the Fukushima disaster in 2011: Japan shut down its nuclear reactors, triggering massive demand for LNG, causing prices to skyrocket and remain persistently high. Europe, for its part, remained dependent on Russian gas pipelines until 2021. The situation changed abruptly with the invasion of Ukraine in 2022, which led to a historic spike in European prices. The continent then turned to the global LNG market, putting itself in direct competition with Asian buyers for supplies from the United States and Qatar.

Paradoxically, the current situation marks the emergence of a true global LNG market. Not because prices are converging, but because shipments are moving to the region offering the best price. This ability to shift LNG shipments from one region to another effectively creates a global market, although prices within that market remain divergent for the time being.

It is precisely this mechanism that explains why, in the current crisis, a blockade of the Strait of Hormuz could trigger another global spike in gas prices. Nearly 20% of the world’s LNG—particularly from Qatar—passes through this area. A closure of the Strait of Hormuz is therefore not just a local risk: it has the potential to cause a global shock.

Gas: A Catalyst for Oil Crises

The current crisis differs from previous ones in that it has a dual nature: it affects both oil and gas simultaneously. In an energy system where the two markets are interdependent, this simultaneity acts as a risk multiplier.

In the short term, a rise in gas prices immediately triggers adjustments in the power systems: in both Europe and Asia, some power plants are switching back to coal.

This phenomenon, which was already observed in 2022 during the invasion of Ukraine, underscores a fundamental reality: in times of crisis, security of supply takes precedence over climate goals. However, in both Europe and Asia, the countries least affected are those that are less dependent on natural gas for electricity generation because they have access to carbon-free renewable or nuclear energy sources. This is particularly true of China.

But what sets the 2026 crisis apart is the combination of vulnerabilities. Oil remains subject to the geopolitics of the Middle East, while natural gas now depends on global maritime routes, the balance of power in Asia, U.S. export policies, and Europe’s ability to outbid Asia.

In other words, a local shock in the Gulf has now become a global“stress test”(resilience test), revealing the fragility of a market that is now unified but difficult to secure.

The markets’ initial reaction reflects this new reality: the closure of the Strait of Hormuz has not (yet) triggered a massive spike in prices, but has led to a risk premium in Europe, a convergence of Asian prices, and a sharp rise in spot volatility. Traders are betting on a short-term blockade: it is this expectation—rather than the actual flow of oil—that is still keeping prices stable.

The future will depend on how long the blockade lasts

Therefore, the extent of the impacts will depend on the duration of the disruption. Beyond immediate adjustments, the issue quickly becomes macroeconomic: if the disruptions persist, markets will no longer be balanced solely by supply but also by demand, through persistently high prices that act as a de facto global energy tax, weighing on growth, purchasing power, and industrial competitiveness. But also—and this is the silver lining—it could encourage decarbonization efforts.

• For a disruption lasting less than three months, the impact on prices would remain limited; global trade flows would be reallocated, and most Asian importers would absorb the shock by drawing on their seasonal inventories.

• With a six-month supply disruption, the strain would become structural, leading to more sustained price increases in Europe and Asia, and putting spot markets under heavy pressure.

• If the stalemate were to last about a year, the effects would be similar to those of the 2022–2023 crisis: Asia would enter into direct competition with Europe, prices could reach extreme levels, and some emerging economies could face rationing or massive power outages.

In today’s interconnected energy system, the decisive factor is no longer just the magnitude of the shock, but its duration. The longer the crisis lasts, the more it resembles a global oil and gas crisis.

It is this combination—oil, gas, shipping routes, and Asian arbitrage—that creates the potential for a true “perfect storm.” And it is yet another reason to accelerate the phase-out of fossil fuels, whose geopolitical vulnerability is more evident than ever.

This article is republished from The Conversation under a Creative Commons license. Readthe original article.