The global energy order after Hormuz

The FT film reports that panic over oil prices and weakness in government bonds appeared simultaneously immediately after the war began, alongside warnings of a blockade of the Strait of Hormuz, and says an air campaign aimed at regime change began despite Trump's antiwar pledges. It argues that, contrary to US messaging about a brief disruption, the conflict became prolonged because Iran has no incentive to relinquish control of Hormuz, and attributes the initially limited rise in oil prices to White House statements downplaying the situation and a sharp decline in imports by China, the world's largest importer. It interprets the plunge in government bonds, which raised interest rates and financing costs rather than producing the usual gains in safe-haven assets, as a signal reinforcing global inflation, and reports that the conflict entered a new phase when the regime did not collapse despite the elimination of Iran's leadership on February (month 2) 28. It says this is not an inflation shock on the scale of 2022, but adds a premium to inflation that had not returned to normal after the pandemic, and that this time the warning signs are not crude oil but diesel, gasoline, jet fuel, and natural gas, which is up 160% from the start of the war. It forecasts an economic slowdown driven by a hit to household disposable income rather than a recession, reports Europe's loss of Qatari gas and dependence on the US for more than 50%, and says it examines renewed attention to drilling, renewables, and nuclear power, along with the dilemma of dependence on China. It argues that energy prices will rise even after the crisis because of resilience and security costs, and that the burden of increased energy and defense spending will be passed on to bond investors and end consumers rather than covered by tax increases. It discusses scenarios for ending the war involving Iranian hegemony or regime collapse, the formation of opposing Russia–China–Iran and US–Gulf blocs, and the paralysis of international institutions, concluding that hopes of a rapid return to low energy prices are futile and that inflation and borrowing costs will rise over the long term. All directional outlooks are the speaker's conditional judgments, not definitive predictions of short-term prices.