This War Changes Everything: Are We Ready for Energy Shockwaves From the Strait of Hormuz? with Rory Johnston
4/29/20261 hr 27 min
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?
(Conversation recorded on April 23rd, 2026)
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.
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First 90 secondsRory Johnston· Guest0:00
Thus far in the war, we're at more than half a billion barrels of oil that should have been produced this year based on all of our normal expectations going into the war, but now haven't been. If you can't fill in supply, you draw down too many inventories, prices need to rise to destroy demand on the other side. So this would be a massive downshifting of the entire global economy forced by supply restraint. This is not just a consumer kind of recessionary, depressionary crisis, this is also a government fiscal crisis because the government at this current stage is naturally going to try and shoulder a lot of that pricing pain itself. It's gonna be a catastrophe. I think that like very simple, it will be devastating.
Nate Hagens· Host0:38
[Instrumental music] You're listening to The Great Simplification. I'm Nate Hagens. On this show, we describe how energy, the economy, the environment, and human behavior all fit together, and what it might mean for our future. By sharing insights from global thinkers, we hope to inform and inspire more humans to play emergent roles in the coming Great Simplification. Today, I'm joined by oil market researcher Rory Johnston to discuss the large scale implications of the Strait of Hormuz closure for the long term and near term stability of global oil supply and the subsequent ripple effects on our industrial and geopolitical and financial systems. Rory Johnston is the founder of Commodity