How Bad Could the Iran Oil Crisis Get?
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What is the main topic discussed in this episode?
Hi, I'm Solana Pine. I'm the director of video at The New York Times. For years, my team has made videos that bring you closer to big news moments, videos by Times journalists that have the expertise to help you understand what's going on. Now we're bringing those videos to you in the Watch tab in The New York Times app. It's a dedicated video feed where you know you can trust what you're seeing. All the videos there are free for anyone to watch. You don't have to be a subscriber. Download The New York Times app to start watching.
If you want to see just how bad this energy crisis can become, just read what President Trump and Iran are saying to each other. On Saturday night, Trump posted a missive to Truth Social. He wrote, if Iran doesn't fully open without threat the Strait of Hormuz within 48 hours from this exact point in time, the United States of America will hit and obliterate their various power plants, starting with the biggest one first. It's a brutal threat meant to make Iran back down. It did the opposite. In response, the Speaker of the Iranian Parliament said, immediately after the power plants and infrastructure in our country are targeted, the critical infrastructure, the energy infrastructure, and oil facilities through the region will be considered legitimate targets and will be destroyed in an irreversible manner.
And the price of oil will remain high for a long time. I'm recording this on the morning of Monday, March 23rd. As I woke up today, oil prices had fallen a bit because Trump had extended his 48-hour deadline by five days, citing positive talks with the Iranians. Iran is denying any such talks have happened. They say Trump is backing down out of fear. They've already hit energy infrastructure in the region, so their threat is credible. But I don't pretend to know the truth here. The news and the price of oil and gas are changing radically by the hour. But here's a key fact that has not changed yet. The Strait of Hormuz remains mostly closed. If it stays closed, and even more so if the war expands, if Iran destroys more energy infrastructure through the region, and the U.S.
and Israel destroy it inside Iran, we are going to enter the kind of energy crisis we have not seen since the 70s, or maybe even something much, much worse. Jason Bordoff is the founding director of the Center on Global Energy Policy at Columbia University and a co-founding dean of the Columbia Climate School. He served as a special assistant to President Obama and senior director for energy and climate change on the National Security Council. I asked him on the show to walk us through what all this might mean for Iran, for America, for global energy prices and security. And also, I think something not to lose sight of, for America's geopolitical competition with Russia and China. Both seem like they might come out a lot stronger from this.
As always, my email, Ezra Klein Show at NYTimes.com.
Jason Bordoff, welcome to the show. Thanks so much for having me. So last week, you and Spencer Dale wrote, quote, the scale of the current shock is extraordinary. The supply outage is the largest ever recorded, far exceeding prior disruptions, not only in absolute terms, but even as a share of global demand. Tell me about that.
Yeah, the Strait of Hormuz moves about 20 million barrels of oil a day and 100 million barrel a day market. So about 20 percent, about 20 percent of the world's liquefied natural gas supply as well. And it's mostly closed. It's the most critical global maritime choke point for the energy sector and for lots of other things, too. We can come to petrochemicals and aluminum and fertilizer, which has implications on food production and food prices here. But for oil and gas, it's the most important choke point. And the Gulf, we all know since the 1970s, the Middle East is a huge energy producer. Iraq, Saudi Arabia, the United Arab Emirates, Iran, of course, and all of that oil, most of it flows by tanker through this very narrow straight that juts like a little triangle around a corner.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:00–5:57
2
What is the current state of the Iran oil crisis?
5:57–15:56
3
How is the United States responding to the energy crisis?
15:56–22:06
4
What impact does the Strait of Hormuz have on global oil supply?
22:06–32:35
5
What are the consequences of potential military actions in the region?
32:35–41:39
6
How might the crisis affect developing countries?
41:39–43:56
7
What lessons can the U.S. learn from past energy crises?
43:56–1:03:45