The New Twin Fossil Shock

The report analyzes the 'twin fossil shocks' of the 2020s—the 2022 Russian invasion of Ukraine and the 2026 shutdown of the Strait of Hormuz—comparing them to the 1970s oil crises. It contends that unlike the 1970s, today's energy transition is driven by 'electrotech' (solar, wind, batteries, and EVs) that is cheaper, faster to deploy, and more secure than fossil fuels. The authors suggest these shocks will accelerate the absolute peak of fossil fuel demand, particularly by pushing LNG out of power generation and oil out of road transport, especially in Asia. The document concludes with policy recommendations to prioritize electrification and remove fossil fuel subsidies to end fuel dependency.

• The 2020s have been defined by two major fossil fuel shocks: the 2022 Russian invasion of Ukraine and the shutdown of the Strait of Hormuz starting February 28, 2026. The latter is described as the largest oil supply disruption on record, removing more than ten million barrels a day.
• Modern electric technologies (electrotech) are economically superior to fossil fuels. Solar plus storage costs below $60/MWh globally, while LNG-fired power in Asia can exceed $160/MWh. In China, crude oil would need to drop below $15 a barrel for internal combustion engines to compete with EVs.
• Electrotech is more scalable and faster to deploy than the alternatives available during the 1970s. Solar and wind are currently over five times larger than nuclear power was during the 1970s shocks, and solar farms can be installed in 18 months compared to the decade required for nuclear plants or new oil fields.
• The 2026 shock is felt most acutely in Asia, where over 40% of oil passes through the Strait of Hormuz. This is expected to accelerate Asia's abandonment of fossil fuels in favor of domestic electrotech.
• Electric vehicle (EV) adoption is rapidly increasing across Asia. In 2025, EVs represented one in four global car sales, with 50% of sales in China and significant shares in Vietnam (38%), Thailand (21%), and Indonesia (15%).
• Absolute peak fossil fuel demand is likely already achieved or imminent. OECD demand peaked in 2007, while global fossil energy use in industry peaked in 2014, buildings in 2018, and road transport in 2019.
• To effectively 'shockproof' energy systems, governments should remove fossil fuel subsidies—which totaled over $900 billion in 2024—and lower the price of electricity relative to gas to incentivize electrification.

APA

Broadbent, H., Bruce-Lockhart, C., & Terry, E. (2026). The New Twin Fossil Shock. Ember. https://ember-energy.org/latest-insights/the-new-twin-fossil-shock

Chicago

Broadbent, Hannah, Chelsea Bruce-Lockhart, and Eli Terry. The New Twin Fossil Shock. Ember, 2026. https://ember-energy.org/latest-insights/the-new-twin-fossil-shock.

Wikipedia

{{cite report |last1=Broadbent |first1=Hannah |last2=Bruce-Lockhart |first2=Chelsea |last3=Terry |first3=Eli |title=The New Twin Fossil Shock |publisher=Ember |date=14 April 2026 |url=https://ember-energy.org/latest-insights/the-new-twin-fossil-shock |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{broadbent2026new, author = {Broadbent, Hannah and Bruce-Lockhart, Chelsea and Terry, Eli}, title = {{The New Twin Fossil Shock}}, institution = {Ember}, year = {2026}, month = apr, url = {https://ember-energy.org/latest-insights/the-new-twin-fossil-shock}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }