Energy This Week | The National

As I write this, oil has dipped below $100, which is completely at odds with market reality. The Strait of Hormuz remains unpassable, except for a few ships that transit daily under agreements between ship operators and the Iranian government. Energy infrastructure in the region remains vulnerable, with sites recovering from recent attacks. Gulf oil producers are also operating under strain, reducing production as there is no safe passage for oil to reach buyers. Qatar’s liquefied natural gas operations have suffered the most impact, with 17 per cent of operator QatarEnergy's production capacity for the super-chilled fuel currently offline due to Iranian strikes. QatarEnergy, the operator, has estimated an annual loss of $20 billion from the supply outage.

At CERAWeek, the largest energy gathering taking place against this backdrop, the mood is sombre, as my colleague Kyle Fitzgerald describes from Houston. Energy executives from the world’s largest oil companies are attending the annual "Super Bowl of energy" without their Middle East peers. However, while their absence has been felt, their voices have been heard loud and clear. Dr Sultan Al Jaber, group chief executive and managing director of Adnoc, denounced Iran’s attacks on energy installations, including Adnoc’s own, as “economic terrorism”. Sheikh Nawaf Al Sabah, chief executive of Kuwait Petroleum Corporation, accused Iran of holding the world economy hostage.

In this week’s newsletter, I bring together perspectives from my colleagues in Houston and Delhi on how the world’s producers and consumers of energy are navigating the ongoing energy crisis.

Shell chief executive Wael Sawan told CERAWeek the LNG disruption would ripple outward in sequence, South Asia first, then South-East and North-East Asia, reaching Europe by April. Shell, which holds a 30 per cent stake in QatarEnergy LNG, has itself declared force majeure on supply contracts sourced from Ras Laffan. ConocoPhillips chief executive Ryan Lance, whose company is a major partner in the same complex, warned of cascading economic damage. "You just can't take eight to 10 million barrels a day of oil and 20 per cent or so of the LNG market off the world stage without having some significant regressions," he said. ConocoPhillips is in discussions with the Trump administration over seeking protection for its Ras Laffan assets.

Our US correspondent Kyle Fitzgerald says: Last year was all about this big energy comeback. Today, the mood feels a bit more sombre; there's this huge cloud of uncertainty over Houston, even though it's really beautiful outside. These ripple effects [from the Middle East] are expanding beyond just Asia. There's not a whole lot of positivity I've been able to gather from these sessions, against this really strong geopolitical backdrop shaping the agenda this week.

Bottom line: US oil majors are set for a $63.4 billion windfall from oil at $100 a barrel while simultaneously warning of systemic damage. This tension puts the industry in the uncomfortable position of profiting from the very crisis it says the world cannot sustain.

India's LPG crisis has become the sharpest symbol of how the war is reaching into everyday life. Roughly 90 per cent of the country's LPG imports, meeting about 60 per cent of domestic consumption, move through the Strait of Hormuz. Commercial allocations have been slashed by up to 80 per cent, shuttering restaurants from Delhi to Kochi, while authorities have conducted more than 12,000 raids on black-market traders. The Philippines has gone further, declaring a national energy emergency. President Marcos Jr warned of a "distinct possibility" of grounding aircraft due to jet fuel shortages. Pakistan ordered schools shut for two weeks and cut free fuel allocations for government vehicles by 50 per cent. In Bangladesh, the government closed universities and placed the military in charge of oil depots. South Korea, Thailand and Bangladesh are rapidly ramping up coal power generation to replace halted LNG imports.

People queue to refill their empty liquefied petroleum gas (LPG) cylinders near a gas agency office in Noida, Uttar Pradesh, India. EPA

Our editor, Shweta Jain, currently in New Delhi, says: Not many would understand how basic or grassroots it is to have a gas cylinder in an Indian household. One crisis, and life comes to a full stop. India's fuel crises have evolved from "not enough fuel" to "fuel stuck in the wrong place at the wrong time". The impact is not limited to households; it has a domino effect on prices across the board, right from fertilisers to a product sitting on a supermarket shelf.

Bottom line: Asian governments are reaching for emergency powers, school closures and military oversight, which are tools normally reserved for natural disasters. The war has reframed energy security into a daily emergency for more than 2 billion people.

The projected windfall for US oil majors if crude holds at $100 a barrel, earned in a single year, against the backdrop of the worst energy supply crisis in history.

Liquefied petroleum gas is a by-product of crude oil refining and natural gas processing, comprising mainly propane and butane. In India alone, more than 300 million households rely on it as their primary cooking fuel.

Trading volumes in Brent and WTI futures spiked in a single minute at 6.49am New York time on Monday, 15 minutes before Donald Trump posted on Truth Social that Washington and Tehran had held "productive" talks. $580 million in contracts changed hands as crude was trading near $100 a barrel. When his post landed, oil fell sharply while S&P 500 futures jumped. It is not known who placed the trades.

CERAWeek by S&P Global, Houston: March 23-27
FII Miami: March 25-27