23 September 2026

Season 8, Post 34: Step on the gas

If you had asked a group of experts at the start of this year how likely US strikes on Iran were, you would have been given a low-probability answer. Nonetheless, large-scale military action began on 28 February. If you had then asked how long the conflict would endure, few would have predicted no end in sight in late September. The implications are significant. Space does not permit us to explore them all, but two recent discussions with energy experts offered some useful perspectives.

The “biggest question” for the team at Bloomberg New Energy Finance (a strategic research division of Bloomberg) is how long the Strait of Hormuz remains shuttered. A ‘base case’ assumption is a November re-opening, whereas a ‘prolonged’ scenario may see no change in current circumstances until next January. Meanwhile a ‘severe’ outcome would be a reopening only in April 2027. These outcomes were outlined in a recent webinar.

In the base case scenario, liquefied natural gas supplies out of the Middle East remain “tight but manageable” and work on the assumption that buyers – especially those in Europe – are not exposed to a cold winter of increasing fuel demands. Europe’s challenges are exacerbated by the restrictions imposed by the European Union on procuring Russian gas, given the ongoing Ukraine war. It seems likely that nations across the world will need to diversify, particularly into nuclear (for baseload needs) and renewables.

Countries therefore need to step on the metaphorical gas pedal. This view was reinforced by Randy Bhatia, VP Investor Relations and Communications at Cheniere Energy, whom we hosted last week for a webinar. He noted that if energy security had moved to “top of mind” after the Russian invasion of Ukraine, it had now been “codified” in the minds of both governments and utilities following the current Gulf War. Nothing matters more than “security of supply” and “building a diverse [energy] portfolio.” We concur.

24 September 2026

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