Daniel Yergin Sees a 'Different World' Emerging After the Hormuz Crisis | Odd Lots

Electric vehicles require approximately three times as much copper as conventional vehicles, creating a significant copper demand spike that could create supply constraints as EV adoption accelerates globally.

“Electric cars use almost three times as much copper as a conventional car.”

US LNG will become the dominant global LNG supplier, with Qatar—previously a major competitor—severely damaged and potentially out of the market for years, making US LNG capacity the swing production in global gas markets and increasing US geopolitical leverage.

“U.S. LNG is, you know, by far the large the largest supplier now and with part of Qatar really damaged, at least for a few years out of it'll be even more reliance on U.S. LNG.”

Only about 6% of new cars being sold in the US today are EVs, despite the energy crisis, showing that EVs have taken off far less than expected.

“The fact that only about 6% of the new cars being sold in the U.S. today, even with this crisis, are EVs. It's pretty crazy how little EVs have taken off.”

Over 90% of new electric capacity installed worldwide last year was wind and solar, showing dominant growth in renewable capacity despite the energy crisis.

“First, we have to note that over 90% of the new electric capacity worldwide that was installed last year was wind and solar.”

The closure of the Strait of Hormuz—through which 20% of global oil and gas flows—was thought to be a theoretically possible scenario that planners would model but assumed would never actually occur due to the extreme stakes involved, yet Iran executed this closure despite the United States possessing overwhelming military superiority.

“I think it's one of those things that people looked at as a scenario but thought it would never happen. But then it happened and it does change the world and it changes the way people think about energy.”

Drones represent a permanent tactical shift that will be replicated globally because the technology is cheap, reproducible, and difficult for traditional militaries to counter, making small powers with drone capability credible security threats to global chokepoints indefinitely.

“But as you mentioned, you know, all cheap drones, the Shaheed drone may may be enough. And Iran will has a lot of them and they'll probably keep producing a lot of them. Maybe that is enough to close the strait, even against the mightiest military in the world.”

The Spanish Civil War was a beta test for World War Two, and Ukraine is the beta test for the new world of modern warfare, with the Gulf conflict now demonstrating these new warfare dynamics—particularly drone technology and asymmetric capabilities—that fundamentally change how the world thinks about energy security and geopolitical risk.

“The beta test for World War Two was the Spanish Civil War, and in a sense, the beta test for the new world of warfare is Ukraine. And now we've seen it played out in the Gulf with with what Iran does. And I think it introduces a sense of risks that wasn't there before.”

US shale oil production has plateaued at around 14 million barrels per day, with debate among CEOs about whether technological improvements (recovery rates increasing from 7% to 10-12%) will unlock further growth or whether the plateau represents the peak of shale productivity.

“Some saying, well, it's plateaued or going to plateau pretty soon. Now it's plateauing at a very high number. I mean, you know, almost 14 million barrels a day and maybe going a little higher than that. Others say no technology is going to unlock the recovery rates now like 7%. And if you can get it to ten or 12%, it will go on longer.”

The Strait of Hormuz crisis will make energy security and diversification permanent strategic priorities for Gulf states like Saudi Arabia and the UAE, increasing defense spending from sovereign wealth funds and shifting investment policy from pure economic optimization to security-first calculations, fundamentally altering the investment climate that had existed in early 2026.

“I remember I was in Kuwait at in January when they were announcing new policy for investment, international investment in their oil and gas industry. And it felt very optimistic time... Well, it's it's it's not going to be as optimistic now. And I think there is going to be deeper thought about energy security and diversification and what kind of security premium. And, by the way, also that you need to spend more money, more share of your sovereign wealth fund on on defense.”

The Strait of Hormuz crisis represents a larger NATO crisis and signal of eroded trust between the US and Europe, with Europeans now discussing a 'NATO without the United States' and energy security becoming a source of transactional relationships rather than alliance-based cooperation, fundamentally undermining the international frameworks designed to coordinate global energy security.

“I think that it's also accentuates and really a crisis for NAITO, which really began with, of course, well, it's has years in the making, but over Greenland. And, you know, now you have the Europeans talking about a NATO without the United States. And so I think the relationship there's been less focus on that. But I think that's one of the the lasting questions that come out of this, too.”

Ukraine has become a player in global energy security through drone exports, with the Ukrainian president doing drone deals with Gulf countries to provide strait protection capabilities.

“There is the president of Ukraine in the Gulf doing drone deals with those countries to give them protection... no country is more experienced in terms of dealing with drones.”

The impacts of the Strait of Hormuz closure on critical commodities beyond oil—including fertilizer, petrochemicals, sulfur, and helium (essential for Taiwan's semiconductor industry)—were not anticipated by planners who had exclusively modeled oil and gas disruptions, revealing a major gap in scenario planning.

“And the eye opener that maybe all these scenarios that people have been doing for the years about the closure of the Strait of Hormuz, people have not thought about fertilizer, they're not thought about petrochemicals, they're not thought about sulfur, they're not thought about helium, which the semiconductor industry in Taiwan desperately needs.”

The US energy independence from abundant oil and gas supplies may create a 'resource curse' where the US maintains reliance on internal combustion and fossil fuels longer than other countries, delaying electrification even as global battery technology improves, because domestic fossil abundance removes the economic pressure to transition.

“Could it be a curse in the sense that, you know, the world is going to electrify one day? Maybe not in our lifetimes. Maybe one day there will probably be electric airplanes, right? Batteries will eventually get good enough and airplanes will no longer need jet fuel, etc.. Is the is part of the story that the US is going to stay on this path of the internal combustion engine and so forth, in part because we are just so blessed with fossil fuels.”

ESG investing and climate-focused capital flows are now largely absent from energy markets, but may reemerge under different branding (e.g., 'energy security' or 'AI infrastructure'), allowing continued capital flows into renewables and energy projects with modified justification narratives.

“You do not get that sense today at all. Is there a possibility, though, that ESG sort of gets rebranded either under an energy security umbrella or under a sort of eye electrification umbrella, and we start to see capital flow into it in a meaningful way yet again?”

The US LNG industry is vastly more important to the economy than commonly recognized, with 75% of valuable semiconductor exports represented by LNG value—twice the value of all Hollywood and television and entertainment exports combined.

“Our latest numbers are 75% of the valuable semiconductor exports is represented by LNG. You know, twice the value of of all Hollywood and television and entertainment exports.”

Policy changes, including hypothetical scenarios like a Bernie Sanders administration, could dramatically alter US energy production and independence outlook.

“Policy can change. Yeah. You know, if you have a Bernie Sanders administration someday, you know, it will be a very different picture than what we have today.”

The Gulf countries (Saudi Arabia, UAE) require certainty that the US is a reliable long-term LNG supplier before committing to long-term contracts, creating tension between European LNG buyers seeking long-term security and US concerns about policy-driven supply interruptions.

“There are a lot of Europeans at Ceraweek who were there about tying up U.S. LNG supplies. Long term and wanting to have those supplies. But, you know, there's always the question of, you know, wanting to be sure that the U.S. is a reliable provider”

AI and robotics adoption in energy production and mining is expanding, with robots being copper intensive, creating a secondary supply chain constraint where robots require copper to be built and mined, potentially leading to self-reproducing automation cycles.

“Robots, by the way, are also copper intensive... the question there is what does it do to jobs? What does it do to efficiency? And I think every CEO was talking about how we're applying AI and all these different cases in our in our companies.”

Gulf countries like Saudi Arabia may find it intolerable to pay tolls to Iran for shipping access and accept Iranian domination over strait supply with funds going to the IRGC, likely making this a key unresolved issue in any settlement.

“For the Gulf countries, for Saudi Arabia, I don't think it's tolerable for them to be paying a toll to Iran and having Iran have that, you know, domination over supply and having those funds that they pay go to the IRGC, which apparently is what would be the destiny of those funds.”

Recovery from the Strait of Hormuz disruption will take significantly longer than a quick cease-fire: oil markets will need at least a couple of months for tanker repositioning and crew confidence to return, and the broader disruption including petrochemicals and refinery damage will take approximately two-thirds of a year to clear completely.

“Maybe a couple of months before the oil markets are back in position. Because remember, the last tankers had already left and they had docked from before the war. Inventories had been run down. So and it captains have to be sure, and their crews have to be willing to go through the Gulf.”

Before the war, Ceraweek 2026 would have been dominated by discussions about powering AI data centers, with major tech company executives presenting, but the crisis shifted focus back to oil and gas alongside electricity generation questions.

“How much would a ceraweek in 2026 have been dominated by conversations about powering air data centers and so forth? How much would that have been the story had it not been for the war in Iraq? It was. Anyway, we had the you know, we had the president of Google, the president, Microsoft there. We had people from Nvidia, from from other chip manufacturers.”

US LNG capacity is in process of major expansion and could grow to 50% larger by 2040 if market demand exists and pricing remains acceptable to buyers.

“There is much additional capacity in in process, Yes. Qatar has a very big expansion, but plan. But we'll see the U.S. coming on with it... Roughly that by 2040 the LNG market could be 50% bigger than it is. But of course that market has to be there and it has to be at a price that people are willing to, you know, pay and confident.”

Industry executives at Ceraweek were deeply concerned about three immediate issues: getting employees to safety, protecting facilities and colleagues, and understanding how markets would be supplied and what demand destruction would occur, indicating that physical supply managers prioritized safety and logistics over financial market speculation.

“They were all the feeling that there is a real dislocation, a real scramble. They worried about getting their employees to safety, worried about the safety of their colleagues, their facilities, and then just how these markets are going to be supplied and what would be the demand destruction, what would happen to price.”

There is a race among tech companies to build electricity capacity, and this is framed as a US-China race but is also very much a company-to-company race, with implications for competitive positioning.

“And it's that that's the gulf between the two of them and the sense that there is a race. And, you know, it's always said it's the US-China race, but it's also a race very definitely among companies to build capacity.”