Pulitzer Prize Winner Dan Yergin: How War Is Reshaping the Energy Map, and the Race to Power AI
What this covers
When we look at the major dynamics reshaping the world today—from modern mercantilism, to the rise of artificial intelligence, to the war in Iran—it’s striking how often the energy market sits at the center of them. In today’s podcast, we’re sharing the highlights from a recent discussion diving into each of these topics, featuring Daniel Yergin, one of the world’s leading energy experts, in conversation with Bridgewater’s Atul Lele, Head of Portfolio Strategists, and Ian Singer, Head of Commodities.
Across the conversation, Dan, Atul, and Ian explore how energy producers are likely to respond to what Dan calls “the mother of all supply shocks,” the implications of a global push for energy security on markets and economies, how the race to power the AI build-out is playing out, the political debate around AI energy use, and more.
Dan is vice chair at S&P Global and the author of several books, including The Prize: The Epic Quest for Oil, Money, and Power, which won a Pulitzer Prize, and The New Map: Energy, Climate, and the Clash of Nations.
Editor’s note: The views of external guests do not necessarily reflect the views of Bridgewater.
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Energy security has re-emerged as central to geopolitics and economics due to the Iran conflict, driving a shift toward neomercantilism (security and resilience over efficiency), which increases costs and creates systemic chokepoints that will reshape capital flows, political alliances, and AI infrastructure development.
- Iran war is a 'mother of all supply shocks' that has eliminated inventories as a buffer and created absolute supply shortfall, not just flow redirection
- Neomercantilism replaces globalization's efficiency focus with resilience, self-sufficiency, and diversification—all more expensive and inflationary
- Energy constraints will directly determine AI buildout feasibility; political opposition and regulatory friction add further pressure
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OPEC members, particularly the UAE, are aware of long-term demand shift driven by EV penetration and accelerating electrification, creating urgency to expand current production and monetize remaining reserves faster than historical timelines.
“OPEC countries are aware of that longer-term demand shift, and so they want to get their barrels out faster. They want to get to the resource that they haven't gotten to, and simultaneously want to be investing into higher value products further up the value chain”
The Iran conflict represents an absolute supply shortfall of energy, fundamentally different from the Russia-Ukraine war which merely redistributed existing oil flows; this absolute shortfall cannot be solved by redirecting or shifting flows to other buyers.
“I mean then it was a question. We went from a global oil market to a more partitioned oil market but you had the same amount of supplies more or less flowing around...Now this is this is of a whole different category. This isn't a question of redirecting flows and shifting flows. It's absolute shortfall.”
The Russian invasion of Ukraine returned energy security to the center of geopolitical and economic strategy after it had disappeared as a theme during COVID when prices and demand fell.
“energy security...had really disappeared as a theme during COVID because prices went down, demand went down...It came back with the Russian invasion of uh Ukraine”
The Middle East energy shock will stimulate new pipeline development from the Gulf, as key countries like Saudi Arabia and the UAE seek to reduce dependence on the Strait of Hormuz as their primary export route.
“it does give stimulus to new pipeline development from the Gulf, because the key countries, like Saudi Arabia, the UAE, are not going to want to be as dependent on the Gulf as they on the Strait of Hormuz as they have been”
Electricity is a main constraint on AI buildout; one big tech CEO explicitly stated 'Electricity is a main constraint on AI,' and the primary CERAWeek discussion centered on how to build sufficient electricity capacity.
“one of the CEO one of the big tech companies said, "Electricity is a main constraint on AI." And there you need a lot of building to do that...the discussion at at CERAWeek this year is about well, how does this actually get done?”
Russia's LNG could not be weaponized against Europe (Putin's strategy failed) because LNG's fungibility and short-term contract flexibility enabled supply redirection; the Ukraine crisis thus did not cause a sustained energy price spike.
“And you had the rise of shale in the US and LNG elsewhere but very significantly US shale that to Putin's surprise LNG could be when he tried to use the gas weapon against Europe failed because of LNG.”
A major policy imperative in Washington is to diversify mineral supply chains and reduce dependence on China as both source and especially as processor of minerals, driven by national security concerns.
“there's one huge impetus in Washington these days, it's to reduce uh, as they say, to diversify supply chains on minerals, which means reduce dependence upon China both as a source, but mainly as a processor of minerals”
Jet fuel cannot be easily replaced by renewable energy investments because mobility and refining require upstream hydrocarbon sources and refining capacity that take years to develop.
“the jet fuel element is difficult to replace with a renewable investment...mobility at large is is difficult to change unless you have a an upstream source or a refining sector that can uh, produce that”
Historical energy crises (1970s) produced surplus in the long term and generated resilience-focused energy security policies that remain in operation today, suggesting current crisis may follow similar pattern.
“when you've had those crises, you end up uh, with a surplus at the end of the day...whether that is the result or whether this is different...much of the energy security measures that we see today that are in operation were response to the crisis of the '70s”
The Western Hemisphere was already producing more oil than the Middle East even before the current crisis, and this production advantage is expected to increase with new Canadian government support for energy development under Mark Carney's administration.
“the Western Hemisphere, which by the way, even before this crisis was producing more oil than the Middle East...We've seen that change in Canada, where you have a government, also Liberal Party, but under Mark Carney, not under Justin Trudeau, that's pro-energy, supporting energy development.”
India, heavily dependent on Middle East LNG cylinders for cooking, has been particularly hard hit by the Iran conflict, prompting Prime Minister Modi's recent calls for frugality and return to natural resources.
“I was struck by the comments from Prime Minister Modi of India...he really started to push LPG cylinders into the villages...he's called for frugality, a return to natural resources, because India has been very hard hit by this, because it depends so much on those LPG cylinders”
The Iran conflict creates economic opportunity for Russia because it increases global oil prices, which raises revenue from Russian oil exports and thereby funds Russia's war in Ukraine.
“For Russia, except for the fact that the Ukrainians are so good with their drones and their missiles trying to disrupt their supply. This is good news for Russia because it increases the price that it's earning for its oil and and that funds its war.”
China imports 75% of its oil from the Gulf, with approximately half passing through the Strait of Hormuz, but receives more than three times the Iranian oil from Arab Gulf producers, making Arab producers more important to Chinese energy security than Iran.
“China is highly dependent upon the Gulf. It imports 75% of its oil, about half of it comes through the Strait of Hormuz and interestingly, while one focuses on the amount of oil it gets from Iran, it gets more than three times that amount of oil from the Arab producers”
Europe is disproportionately impacted by the energy crisis on jet fuel supply due to high historical dependence on Gulf jet fuel, creating immediate infrastructure challenges separate from oil and natural gas disruptions.
“Europe has been particularly hit in terms of jet fuel cuz it was so dependent upon it...the area that's been hit the most the hardest is Asia because 80% of the oil coming out of the Gulf went to Asia, 90% of the gas”
Inventories have been a critical lever for offsetting supply disruptions, but this lever is being depleted as Asian refined product inventories (particularly diesel and jet) deplete faster than crude inventories, creating medium-term vulnerability window.
“inventories have been a critical lever to try to offset some of the disruption. As we move forward, that lever doesn't exist in in the same way as you deplete those inventories...inventories broadly in Asia ex-China were lower than than other parts of the world and...have gotten increasingly stressed...that runway is not super long, you know, order of magnitude of a few months”
Behind-the-meter power solutions (fuel cells, small turbines from fracking equipment, batteries) are proving more expansive and cost-effective than anticipated, allowing data centers to reduce grid dependence and bridge capacity gaps.
“Behind the meter solutions have I think proven to be more expansive and developers of data centers have been more willing to rely on those than I think people have given credit for...capacity for behind the meter solutions is likely emerging to be higher than what we had forecasted...Some of that has been a fuel cell, some of it has been...turbines...engines that...are being repurposed...battery deployment has ramped up”
China does not face the same electricity supply pressure as the United States due to China's more regulated grid management and capacity planning, giving Chinese AI developers structural advantage.
“China does not have a that same pressure in its electric supply system as the United States does”
Neomercantilism emphasizes resilience, supply chain diversification, and greater independence from global systems, but these benefits all come with increased costs and friction compared to the efficiency-driven globalization of the prior era.
“neo-mercantilism because it it points to resilience in in supply chains, to the degree possible, greater independence from the system, diversification, and all of those are benefits, but they all come with a cost...a neo-mercantilist world is not a world of greater efficiency, but it's a world of uh greater costs as well as friction and unintended consequences”
Data centers currently represent ~5% of US electricity demand and are expected to reach ~14% within 5 years, with some forecasts claiming 17%, representing rapid growth that concentrates infrastructure pressure.
“right now data centers are probably around 5% of US electricity demand within 5 years being around 14%. I know others have higher numbers like 17%, but it is a very rapid growth”
State regulatory commissions, not federal government, set electricity rates and determine data center opposition; state-level opposition to data centers has increased due to affordability concerns and rate pressure.
“you have the federal government and then you have the states and you have state regulatory commissions who set rates...it's at that level where you see the opposition...whether rates have gone up because of data centers...that really plays into the affordability question”
Federal government is streamlining regulations to approve previously-blocked projects; example is Alaska mineral mining road that Biden administration blocked but Trump administration approved, signaling regulatory orientation shift.
“efforts to streamline regulation on federal land...things that would not have been approved under Biden administration getting approved...very good example is in Alaska where the Biden administration had not allowed a road to be built to a major mineral mining resource, but it's got to go ahead under the Trump administration”
US shale oil, while still expected to grow, has reached maturity and will plateau, driving renewed exploration interest globally as companies rebuild skills that had atrophied during the period of shale dominance.
“US shale, while it still may grow, it is going to plateau. It is a mature resource. And suddenly, companies that have been less interested in exploration, that maybe had even allowed those skills to atrophy somewhat, are stepping them up.”
The Strait of Hormuz disruption affects far more than oil and gas; it also impacts fertilizer, aluminum, petrochemicals, helium, and sovereign wealth fund capital flows, making Arab economies vastly more integrated into the global economy than two decades ago.
“if it happens, uh what would be the impact? And people would have thought about oil. Some people would have thought about LNG and natural gas, but people wouldn't have thought about fertilizer, aluminum, petrochemicals, helium. And by the way, also that region's a very important exporter of something else called money in the form of sovereign wealth funds. And I think what this has also brought to the fore is just how quickly those countries in that region, not on the Iranian side, but the uh Arab side have become integral into the world economy beyond what they were 20 years ago and much more important overall in the world economy.”
The world of post-WWII alliances is under strain; you notice confidence in alliances only when it's absent, and there is a growing deficit of trust in alliance relationships making the world more dangerous and uncertain.
“the world of alliances that was born really after World War II are under a lot of strain...you mainly notice confidence when it's not there...in terms of alliance relationships, it's the same. You really notice trust only when it's not there, and I think in there is a growing deficit of trust...makes it a more dangerous and uncertain world”
Energy supply diversification and resilience strategies driven by the Iran crisis will require massive capital investment and infrastructure spending, intensifying competition for capital in an environment already strained by fiscal mercantilism spending and AI data center capex.
“this all sounds very capital intensive...it's really just going to be exacerbating the higher cost of capital environment that's born out of firstly a lot of fiscal spending that's taking place globally for mercantilism, or broadly pushing towards self-sufficiency, and also of course, the huge amount of artificial intelligence capex”
Global energy supply chain creates rolling set of chokepoints; solving one (e.g., moving from oil to renewables) creates another chokepoint elsewhere (e.g., mineral sourcing, regulatory bottlenecks).
“you can try and alleviate one choke point in the global energy supply chain and you can even try and alleviate it through looking for alternative sources of energy but you just create other choke points elsewhere...solar that creates another choke point. When you move towards renewables and that can create another choke point from a regulatory standpoint”
CERAWeek 2025 had major attendance from Google, Microsoft presidents and large Nvidia delegations, and functioned more like a technology conference within an energy conference, reflecting integration of tech and energy sectors.
“this year we had the presidents of both Google and Microsoft there and a big delegation from Nvidia...would have looked even more like an energy tech conference...the kind of theme...was tech hyperscalers meet energy”
Tech hyperscalers are adopting behind-meter power solutions partly in response to political pressure as well as to actual electricity needs, suggesting corporate strategy is dual-driven by technical constraints and political risk.
“behind the grid things that that Ian was talking about was also to respond to the political pressures as well as the need actual need for electricity”
Investment in capacity to control minerals and energy domestically in a mercantilist world generates good long-term ROI despite capital intensity, and eventually leads to longer-term price deflation as supply chains replicate globally.
“if you look across the energy landscape and into the critical materials minerals landscape, there's a connection where investment in the capacity to have control over those things in a domestic way, however you want to put your perspective on domestic on a long time frame are good economic investments, but it's capital intensive, but the ROI on those in a in a modern mercantilist world are are good. And at the same time, because they're good, if the capital can get formulated, it likely does lead to a longer term view of deflation on the prices for those things as you you start to replicate the supply chains globally.”
GCC capital flows are shifting inward toward defense spending and internal investment due to regional instability, reducing the capital available for export and creating structural reallocation of global capital flows.
“these economies have been large exporters of capital and we see that on the margin at the very least right now, some of that's going to start to be directed internally for defense and other purposes as well”
Renewables in Europe are being rebranded from climate/emissions framing to energy security framing, but Europe also needs to extract itself from regulatory constraints that insulate energy policy from market realities.
“we're going to see a rebranding of renewables, uh, less in terms of climate and emissions and more in terms of energy security...Europe also needs to extract itself if it can from its regulatory straitjacket...regulations...seem to be uh, insulated from market realities”
Local political opposition to data centers will likely end up on ballots in the form of referenda during midterm elections as a visible political issue.
“political popular opinion will be really important and it it seems like it will probably end up on the on the ballot in some form or fashion as we approach the midterms”
In Venezuela, the change in leadership has created three distinct investor responses: rapid action by entrepreneurs and Latin American companies, medium-term projects by larger companies (like connecting Trinidad-Venezuela gas fields), and large-scale investment that remains constrained by companies' negative experience with the prior government.
“There was a kind of independence, you know, the entrepreneurs, the Latin American companies that said we can do something quickly. Then secondly, there were the larger companies who said, well, there's certain things we can do, they'll take a couple of years like connecting gas fields...And then there's a big box, the big investment and that, you know, companies were reluctant”
As an investor, Ian's focal point is geopolitics because geopolitics determines how energy disruptions actually manifest in physical flows, inventories, and prices over near to long-term horizons.
“the focal point is still the geopolitics just because that's going to determine how the disruption manifest in actual flows in the near and and medium and long term”
Artificial intelligence buildout is a major demand-side dynamic that Bridgewater has been tracking since 2012, with key inflection in 2024 (when they assessed it as 'a bet on science' with bubble risk ahead) and 2025 (shift to resource grab phase).
“we've been following this story for a while, actually, since back in 2012, Bridgewater's been deeply connected with the artificial intelligence landscape...it was back in 2024 when we wrote that, in our daily observations, that this was a bet on science and how the bubble was ahead of us...in 2025, we discussed the resource grab phase”
Ian does not view electricity as a hard constraint on US AI growth but rather as creating economic and latency trade-offs that operators will make to ultimately serve the demand that exists.
“I don't necessarily see it being uh a constraint per se versus making some economic and you know maybe some latency choices to ultimately serve the demand that is there”