Energy Shocks Are Back. This Time, the Response Can Be Different.

The briefing examines the impact of energy supply disruptions stemming from the US-Iran war, noting that the current crisis is larger than the 1970s oil embargo. It argues that while governments are using short-term fixes like strategic reserves and subsidies, the long-term solution lies in electrification, demand-side efficiency, and the scaling of 'green molecules' like hydrogen and ammonia. The text highlights specific vulnerabilities in Southeast Asia and the US, and suggests that mitigating methane leakage and flaring could recover energy volumes equivalent to approximately half of worldwide LNG trade.

• The current energy disruption caused by the US-Iran war is significantly larger in scale than the oil embargo of the 1970s and has caused shortages in various critical commodities, including natural gas, jet fuel, diesel, hydrogen, aluminum, ammonia, and fertilizer.
• Reducing energy demand through efficiency and 'flexing demand' is presented as the most immediate and scalable solution to lower costs and reduce vulnerability to supply chain shocks, avoiding unnecessary infrastructure buildout.
• In the United States, there is a critical need to support the one-in-three people struggling with energy affordability while utilizing virtual power plants and transmission line technologies to unlock grid capacity.
• Southeast Asian nations are heavily dependent on imported fossil fuels, leading to fiscal strain from subsidies and price caps. The Philippines is particularly vulnerable, importing 98% of its crude oil from the Middle East.
• Mitigating methane leakage and routine flaring in the oil and gas sector could return approximately 280 billion cubic meters (bcm) of gas to the market, a volume roughly equal to half of global LNG trade.
• The Gulf energy crisis has caused a global fertilizer shortfall, necessitating a shift toward 'green molecules'—such as hydrogen and ammonia synthesized via renewable energy—to secure food and industrial supplies.

APA

Creyts, J., Dyson, M., & Rizkiningayu, W. (2026). Energy Shocks Are Back. This Time, the Response Can Be Different. RMI. https://rmi.org/resources/energy-shocks-are-back-this-time-the-response-can-be-different/

Chicago

Creyts, Jon, Mark Dyson, and Wini Rizkiningayu. Energy Shocks Are Back. This Time, the Response Can Be Different. RMI, 2026. https://rmi.org/resources/energy-shocks-are-back-this-time-the-response-can-be-different/.

Wikipedia

{{cite report |last1=Creyts |first1=Jon |last2=Dyson |first2=Mark |last3=Rizkiningayu |first3=Wini |title=Energy Shocks Are Back. This Time, the Response Can Be Different. |publisher=RMI |date=15 April 2026 |url=https://rmi.org/resources/energy-shocks-are-back-this-time-the-response-can-be-different/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{creyts2026energy, author = {Creyts, Jon and Dyson, Mark and Rizkiningayu, Wini}, title = {{Energy Shocks Are Back. This Time, the Response Can Be Different.}}, institution = {RMI}, year = {2026}, month = apr, url = {https://rmi.org/resources/energy-shocks-are-back-this-time-the-response-can-be-different/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }