The Iran Oil Shock: Will it Force the World to Re-think the Future of Energy?

**Jason Bordoff** (0:03)
As soon as the conflict in Iran erupted in late February, it became clear that the world was facing an energy crisis. In the weeks that followed, while much of the analysis focused on the immediate shock, I wanted to think through some of the longer-term implications. Over the last five years, I've been very lucky to do so much of that thinking and writing with my friend and collaborator Meghan O'Sullivan, who is among the most brilliant people I know on energy and foreign policy. Meghan directs the Belfer Center for Science and International Affairs at the Harvard Kennedy School, where she is also a Professor of the Practice in International Affairs. She served in the Bush Administration as a Deputy National Security Advisor. Our article titled, The Iran Shock and the Dangerous Allure of Energy Autarky, was published in the current issue of Foreign Affairs.
Welcome to Columbia Energy Exchange, a podcast from the Center on Global Energy Policy at Columbia University. I'm Jason Bordoff.
Today, we are pleased to present an episode of Radio Davos from the World Economic Forum. Host Robin Pomeroy invited Meghan and me to discuss our article and the longer-term implications of today's energy shock. Unfortunately, Meghan fell ill and was unable to join us, but I did my best to channel her brilliance in my conversation with Robin. I hope you enjoy it. Our special thanks to Robin and the World Economic Forum for collaborating on this episode. We'll be back next week with the next episode of Columbia Energy Exchange.
This is the largest oil supply disruption the world has ever seen, and it has the potential to get much worse from here.

**Robin Pomeroy** (1:54)
Welcome to Radio Davos, the podcast from the World Economic Forum that looks at the biggest challenges and how we might solve them. This week, what will be the lasting impacts of the current oil shock?

**Jason Bordoff** (2:04)
It is unlikely, in my view, that there will be any announcement forthcoming from the Trump administration of the Iranian regime that suddenly gives people 100% confidence to put the value of tankers and the value of human life and the crews of those tankers at risk.

**Robin Pomeroy** (2:18)
An oil shock in 1973 changed the way countries approached energy security. This oil shock will probably do the same, this expert says. But the impacts this time will be very different.

**Jason Bordoff** (2:28)
Particularly in a new world of fragmentation, geopolitical conflict, the eroding world order. In a world like that, countries don't view interconnection as security, they view it as a risk.

**Robin Pomeroy** (2:39)
Jason Bordoff of the Center on Global Energy Policy at Columbia University gives us his assessment of how the world of energy will look after the 2026 oil shock.

**Jason Bordoff** (2:48)
Most of the things you would want to do to deal with an oil shock don't help with this oil shock, they help with the next oil shock. And when the immediate crisis fades, the political urgency to do something for the next one tends to fade as well. An oil shock is less harmful if oil is less a share of your economy. So the most durable thing you can do for energy security is just to use less in the first place.

**Robin Pomeroy** (3:08)
Follow Radio Davos wherever you get podcasts or visit wef.ch slash podcasts. I'm Robin Pomeroy at the World Economic Forum.

**Jason Bordoff** (3:15)
And with this assessment of the impact of the Iran oil shock, it's going to really change how we think about the future of energy.

**Robin Pomeroy** (3:22)
This is Radio Davos.
No one knows how the war between the United States and Israel and Iran will play out. One of the few things we can be sure of, though, is that it's having a huge impact on the global economy, largely because of the closure of the Strait of Hormuz, the narrow sea lane that is the entry and exit point into and out of the Persian Gulf. The last time the world faced an oil shock as significant as this was arguably in 1973, when Arab oil exporting nations stopped shipping energy to countries supporting Israel in a war back then.
The fact that we still talk about that event more than half a century ago reflects what impact that had on the way the whole world's energy systems function. For this episode of Radio Davos, produced in collaboration with the Columbia Energy Exchange podcast, I spoke to Jason Bordoff, who's one of the main experts on that podcast. He's also director of the Center on Global Energy Policy and a professor at Columbia University in New York. Jason sets out the scale of the crisis right now, and what we might expect the long-term consequences to be. Consequences that will affect all of us around the world. Here's my chat with Jason recorded a few days ago. Jason Bordoff, thanks for joining us on Radio Davos.