Schrödinger's Strait and the New Energy Order | Daniel Yergin

**Demetri Kofinas** (0:00)
What's up, everybody? My name is Demetri Kofinas, and you're listening to Hidden Forces, a podcast that inspires investors, entrepreneurs and everyday citizens to challenge consensus narratives and learn how to think critically about the systems of power shaping our world. My guest in this episode of Hidden Forces is Daniel Yergin, a Pulitzer Prize-winning author and leading authority on energy, geopolitics and the global economy, who also serves as vice chairman of S&P Global and has previously taught at Harvard Business School and the Kennedy School of Government. Dan and I recorded this conversation on Monday, June 29th, amidst ongoing talks between the United States and Iran to reopen the Strait of Hormuz and restore commercial shipping through the world's most important energy choke point. Despite those disruptions, the strait's closure has proven far less catastrophic than many oil analysts and decades of nightmarish scenario planning had predicted. The question, then, is why? Why, in the case of both the ongoing war with Iran and the Ukraine war, have disruptions to energy markets proved far more manageable than many expected? And what does their resilience and that of the global economy tell us about the changing nature of global supply chains, energy diversification, inventory management, and the roles of the United States and China as the world's largest swing producers and consumers of energy?
From there, we examine how this crisis has served as a catalyst for a series of ongoing transformations to the global order and regional geopolitics beginning with China and the lessons it continues to draw from this conflict and from America's entanglements in the Middle East. Iran's bid to turn the Strait of Hormuz into its own private waterway, the recalibration of Gulf security as American commitments to and interests in the region grow less certain, and the shifting alignments among the Gulf states, Iran, China, and the United States that will define the regional balance of power in the years ahead. If you want access to the transcripts and intelligence reports for this and other episodes, which includes summary sections with key takeaways, you can access those by subscribing to our super nerd tier at hiddenforces.io/subscribe.
If you want to join in on the conversation and become a member of the Hidden Forces Genius Community, which includes Q&A calls with guests, discounted access to third-party research and analysis, and in-person events like our intimate dinners and weekend retreats. You can also do that on our subscriber page. If you still have questions, feel free to send an e-mail to info at hiddenforces.io, and I or someone from our team will get right back to you. With that, please enjoy this incredibly timely and informative conversation with my guest, Daniel Yergin.
Daniel Yergin, welcome to Hidden Forces.

**Daniel Yergin** (2:55)
Glad to be with you today. Thanks.

**Demetri Kofinas** (2:57)
It's my pleasure having you on. I must have reached out to you years ago. I'm sure I did.
I've wanted to have you on the podcast for a long time and fortunate circumstances have made that possible today. And it's actually a timely opportunity because we're going through another war with another series of energy disruptions that also feel like they haven't shown up. It hasn't been as severe. The impact to the global energy system doesn't appear, at least on the surface, to be as severe as some of the more dire forecast had anticipated. And in that sense, it reminds me of the Ukraine War. There were a lot of dire predictions and the global economy was more resilient and supply chains adjusted faster than I think people anticipated. I want to ask you about that, and I have another series of questions to ask as well. But before we do, just for those who aren't familiar with you, you're famous for having written the Prize, you've written the Quest, you've written the New Map. You're one of the most recognized commentators and writers on oil and energy markets. But just give us a little bit of a background on who you are.

**Daniel Yergin** (3:57)
Well, as you say, it starts with the books and I've certainly didn't set out to do this, but I've ended up being a chronicler of world energy and how it changes and the interaction between energy and geopolitics. The two seem inseparable. I started off as an academic. I did a PhD at Cambridge University. I taught for a little while at the Harvard Business School and the Harvard Kennedy School and then started a company with really with one other person.
And that company is now merged and merged and merged and merged and now I'm vice chairman of S&P Global, which is people know it as the S&P because they follow that every day but it's a 42,000 person company that covers a range including a big part of what it does focuses on the energy sector. So I've been able to combine this kind of writing books that are accessible but really bring the picture together at the same time while being also active continually around the world in the energy sector.