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

This briefing from RMI and the New Energy Industrial Strategy (NEIS) Center analyzes the global energy crisis triggered by the US-Iran war. It argues that while governments are currently relying on short-term fixes like strategic reserves and subsidies, the crisis provides an opportunity to accelerate the transition to clean energy, electrification, and efficiency to reduce long-term vulnerability to volatile global fuel markets.

• The current energy crisis, caused by the US-Iran war, has resulted in disruptions to global oil and gas flows that are larger than the oil embargo of the 1970s, causing shortages in critical commodities including natural gas, jet fuel, diesel, hydrogen, aluminum, ammonia, and fertilizer.
• Electrification and energy efficiency are presented as the primary tools for reducing exposure to volatile fuel markets. Reducing demand through systems that waste less is described as the most immediate and scalable solution to lower costs and reduce vulnerability to supply chain shocks.
• In the United States, there is a push to utilize virtual power plants and innovative transmission line technologies to unlock grid capacity and lower costs for users, while providing targeted protections for the one-in-three Americans struggling with energy affordability.
• 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, leading the government to declare an energy emergency.
• Mitigating methane leakage and routine flaring in the oil and gas sector could return significant energy to markets. The total loss from this sector is roughly 280 bcm (130 bcm from leaks and 150 bcm from flaring), which is approximately half of worldwide LNG trade.
• The Gulf energy crisis has caused a global fertilizer shortfall, risking a food crisis. The document advocates for a dual strategy of scaling domestic production and building trusted import partnerships for 'green molecules' like hydrogen and ammonia to replace oil and gas in the fertilizer, chemicals, shipping, and aviation sectors.

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} }