The Energy Crisis: Downstream Impacts
By Peter Zeihan
The global energy crisis has moved from theoretical to very real. As the last shipments sent before the war begin to arrive, we are now hitting a turning point in the energy crisis.
Rationing and black markets have already sprung up in Asia. Some countries have found ways around the shortage (for now), but that has created new issues for others. The Europeans will feel the heat in the coming weeks, as oil from both the Gulf and Russia disappears.
Summary: The Energy Crisis Is Now Reaching Consumers
In this update, Peter Zeihan focuses on what happens next. His core point is that the global energy crisis has moved from theoretical to real. The last pre-war shipments of oil from the Persian Gulf are now arriving, and once those are gone, there is no immediate replacement. According to Zeihan, roughly half a billion barrels of oil have already failed to reach the market, and the effects are just beginning to cascade through the system.
The impact is not uniform. In Asia, shortages are already showing up in the form of rationing and black markets. Some countries have managed to delay the worst of it—India, for example, has leaned on remaining Iranian and Russian supply—but even there, critical fuels like propane are disappearing, creating a different kind of energy shortage.
Other countries are more exposed. Much of Southeast Asia is already experiencing disruptions, while South Korea faces particular vulnerability due to limited alternatives. China, for now, has avoided a full-blown crisis—not because it isn’t short on energy, but because it has excess refining capacity. By halting exports of refined fuel, China has effectively redirected supply inward, stabilizing its own market while worsening shortages elsewhere.
Europe is next. While it has had a slight delay due to shipping timelines and indirect flows of Russian crude, those buffers are now running out. Within weeks, Zeihan expects both Persian Gulf and Russian oil to largely disappear from Europe’s supply chain, creating a more acute phase of the crisis.
Meanwhile, shipping through the Strait of Hormuz remains severely constrained. Some tankers are getting out—often through improvised arrangements involving Oman—but very few are going in. That creates a critical bottleneck: even if oil is still being produced, it has nowhere to go.
Finally, Zeihan highlights a major policy shift. The U.S. has lifted sanctions on Russian and Iranian oil already in transit, temporarily easing supply pressures. But in doing so, it has effectively undone years of effort to restrict those countries’ energy revenues, resetting the geopolitical and economic landscape around global oil markets.
The takeaway is straightforward: the crisis is no longer about potential disruptions. It is now unfolding in real time, with shortages spreading unevenly across regions and moving steadily closer to end consumers.
