(Conversation recorded on April 23rd, 2026)
Over three-quarters of the global population has never lived through a major global energy crisis, such as those of the 1970s. In early 2026, that is about to change as the world faces the largest energy disruption in history, measured by the daily loss of oil output. This crisis won’t be evenly distributed but will be felt everywhere – and is guaranteed to have ripple effects we won’t see coming. How much oil remains in circulation, and what level of damage has already been inflicted on our global energy infrastructure?
In this episode, Nate is joined by oil market analyst Rory Johnston to discuss how the Strait of Hormuz closure has led to the largest oil supply shock in history, and what the exact numbers and cascading effects are. He also breaks down the primary strategies countries will have to use to adapt to energy losses, including resorting to demand destruction, and what the disastrous risks are if shortages are allowed to persist. Rory also explains the lag between the closure, the real world impact of oil not being able to enter global circulation, and the market’s response. Ultimately, Rory and Nate explore the impact of this situation on international trust and cooperation, and what that might mean for a global market system predicated on interdependence and free trade.
Who are the energy winners and losers in this war so far, and how are our global leaders accounting for the exponential risks of continued warfare? In what way can average people prepare for the energy shocks soon to ripple out across the globe? And lastly, if we do recover from this scenario, how might we treat these disruptions as a dress rehearsal for a future of lower material throughput by building greater resilience and interconnection at the local level?
About Rory Johnston:
Rory Johnston is a Toronto-based oil market researcher, the founder of Commodity Context, a lecturer at the University of Toronto’s Munk School of Global Affairs and Public Policy, host of the Oil Ground Up podcast, as well as a Fellow with both the Canadian Global Affairs Institute and the Payne Institute for Public Policy at the Colorado School of Mines. He is a leading voice on oil market analysis, advising institutional investors, global policy makers, and corporate decision makers.
Prior to founding Commodity Context, Rory led commodity economics research at Scotiabank where he set the bank’s energy and metals price forecasts, advised the bank’s executives and clients, and sat on the bank’s senior credit committee for commodity-exposed sectors.
Show Notes and More:
This War Changes Everything: Are We Ready for Energy Shockwaves From the Strait of Hormuz?
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00:00 Introduction
02:57 How Much Flows
06:04 Reroutes And Real Loss
07:59 Replacing Missing Barrels
10:00 Stocks And SPR Limits
12:13 Demand Destruction Explained
17:00 Shipping Lag
23:01 Tracking Inventories
25:18 Why Markets Stay Calm
31:29 Infrastructure And LNG Risks
39:27 Resolution Scenarios
44:26 U.S. NGL Exports Explained
46:01 California Supply Risks
49:40 Global South Priced Out
53:34 Energy Blind Culture Shift
59:02 Canada Wins*
1:00:45 Worst Case Scenario
1:06:52 Base Case Ending Logic
1:11:06 Geopolitical Trust Rupture
1:13:48 Why Focus on Oil
1:16:09 Hidden Supply Chain Risks
1:19:00 Personal Energy Choices
1:21:13 Advice For Young People
1:24:19 Closing Thoughts
1:26:09 Final Credits
Credit to : Nate Hagens