The next energy superpower will make its own fuel | Fortune

"The Strait of Hormuz - a narrow waterway through which roughly a fifth of the world's oil supply passes - has effectively closed to tanker traffic amid the escalating U.S.-Israeli strikes on Iran. Once again, the global economy is discovering the same uncomfortable truth: Modern energy security depends on supply chains that can break overnight."

"The modern energy system was built around a simple assumption: Fuel is produced in a few places and consumed everywhere else. Oil is extracted in one region, refined in another, and shipped thousands of miles through pipelines, canals, and maritime chokepoints before reaching the end user. When that chain works, it is remarkably efficient. When it breaks, the effects ripple globally almost overnight."

"The world runs on a centralized fuel production model designed for the industrial geography of the 20th century - a handful of massive refineries producing enormous volumes of fuel that must then move through fragile global logistics networks to reach markets. That model made strategic sense when control over oil reserves meant control over energy. But it also created a system where a single blocked canal, damaged refinery, or closed shipping lane can disrupt entire economies."

Oil prices have surged past $100 per barrel as U.S.-Israeli strikes on Iran have effectively closed the Strait of Hormuz, a critical waterway through which one-fifth of global oil supply passes. This geopolitical shock demonstrates the fragility of modern energy systems built on centralized production and long-distance distribution networks. The current crisis follows historical patterns from the 1970s, 1990, and 2003. The global energy infrastructure depends on fuel extracted in specific regions, refined elsewhere, and transported thousands of miles through vulnerable chokepoints. When disruptions occur, effects spread rapidly across economies worldwide. Countries like Japan, Bangladesh, and South Korea face immediate energy pressures. The underlying problem stems from 20th-century industrial geography assumptions that no longer serve modern needs. An emerging alternative involves developing synthetic fuels produced locally using carbon dioxide, hydrogen, and electricity.

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