question: When does all this hit the fan? Been reading for months that gas will rise to astronomical prices. When?
answer: it depends heavily on China. If China were to jump into the global oil market with both feet, prices would shoot upwards. To date they have largely stayed on the sidelines.They have huge amounts of oil in storage. Their behavior so far has been the big surprise. They have been providing a pressure relief valve for the entire globe.
I wouldn't call what they're doing "staying on the sidelines". It's a very big thing they're doing to stop global oil prices from shooting up by using up their stockpile for as long as they can. As to why, it's just the... I dunno, Chinese? thing to do. Quietly fix someone else's fuckup and not seek glory. Whatever you want to attribute it to, it's an ethos and makes total sense to some, because things are gonna get fuuuuuucked if gas prices go to the moon.
They can use this ability to keep oil prices down to sort of back up their strategic goals. They could block a strait themselves while taking Taiwan. They could open the stores for concessions in other ways. They can also use this current Iran War to study how the US handles economic problems like oil-inflation. By having their finger on the scale they can push and pull and see how the US reacts in a war scenario.
China’s economy depends on exporting to the world, as it will never have enough domestic demand to meet domestic supply. If the global economy crashes from an oil price shock, China goes down with it.
Power is better than money though. China is communist in name only now, but they could extract huge concessions out of the rest of the world right now if they wanted to.
They could, but they’ll wait, they’re not ready yet. Until then, they’ll continue to electrify their economy, build out domestic energy supply, rebuild their oil inventories from Russia and Iran when able (at below market prices, dominated in yuan, avoiding dollar systems and sanctions) and prepare to take Taiwan as the US continues to weaken itself.
If Taiwan toasts TSMC when that happens, well, that’s part of what China is rapidly building out their domestic chip industry. China will then have a monopoly on that chip production besides what can be produced in the US and Europe, and have achieved reunification. And who is going to stop them? Nobody, based on the evidence and current trajectories.
You can bet that all TSMC chip factories in Taiwan have strategic installs of explosives just for this scenario, China will get nothing, and the US has multiple TSMC chip factories now and will gladly accept Taiwan victims.
As mentioned, they won’t need the fabs. They’re spending tens of billions of dollars to advance their own vertical chip industry.
The US just pulled temporary status from hundreds of thousands of Hatians, so I wouldn’t be so confident what the future looks like for Taiwanese refugees in the US.
TLDR China is going to build whatever chip technology they need to accomplish their technology and geopolitical goals. They have the resources, the will, and the time.
The US also has a recent history of making it so hostile that they’re exporting scientists to China, Europe, and Singapore (not exhaustive). Hard to predict the future of who will be welcomed, if they’ll be welcomed, for how long, and if they even want to come to the US. There are many better places to go after all.
Bad bet, wanking about TW blowing up their golden goose fabs is US hopium/threat - literally US Army War College insinuated US would blow up fabs to deny PRC while TW politicians/defense minister retorted under no circumstances was that acceptable nor would they evacuate semi talent to US before women and children. Not that they could under PRC blockade/quarantine. The entire notion is fundamentally stupid, TW with fabs is at least useful to PRC and sustains wealth after, or they'd be subsistence pineapple farmers. US has 0 TSMC factories that would operate for long with TW semi sole supplier, Arizonal would grind to halt until US reshores every piece of semi supply chain which even CHIPS ACT didn't pretend US was capable of. Only PRC pursuing end to end full vertical semi integration. TW goes byebye in next few years, PRC will likely be capable of making wholey indigenize 7+nm while entire western semi is fucked because they lost TW inputs. Now consider PRC land based munitions can make anything on TW go byebye in 7 minutes, reality is PRC has maximum semi leverage during war while US has semi leverage during peacetime (lawfare/export controls etc).
China isn’t trying to crash the global economy but they’re letting prices rise to the point that their EV, solar, and battery companies are seeing huge demand. They don’t want a depression, just acceleration of that trend.
interesting why usa wants to keep escalating, muat be some strat behind it maybe to induce strategical global recession or try and slow down china or something else
The Iraq war lasted nearly a decade. Afghanistan 2 decades. And the US accomplished nothing. They made things worse, I don't need to go into details because that is an easy lookup.
That's ultimately the purpose of this war. Israel wants us to fight Iran because "Iran was close to making a nuke", which is an excuse they have been using for nearly 30 years.
Have you seen how much money AIPAC has in US politicians' pockets? Nearly every other office in congress has an Israel flag on their door. Poured $36M (Million) into Haley Stevens. A complete nincompoop and incompetent person, but she would have further supported Israel's agenda.
The US is a destructive war machine beast that needs to be constantly fed. Unfortunately, we are going to see tons of US armed forces personnel and Iranians die in a needless, wasteful, illegal war.
Or general stupidity and incompetence. Trump and his cabinet of clowns thought they could score a big win (I suppose like Russia back in 2022). Now they are stuck in shit and have no clue how to get out.
If the military industrial complex was in control of the US gov. they would stop President Cheeto from antagonizing the rest of NATO and therefore reducing the competitiveness of US arms manufacturers.
You are of course right about Israel Netanyahu is playing cheeto like a fiddle..
Yup, it's a dementia patient floundering around, supported by a coterie of nutters and incompetents. You know it's bad when the Iranian leadership is the least crazy party in all this.
The only way for the US to win is to concede and acquiesce control of the Strait to Iran, but the administration has too much pride and hubris so they’ll keep bullying until stopped.
It’s not a complex geopolitical game, it’s saving face.
I think returning (to some extent) to the status quo is possible but only if Trump’s admin is replaced or at least neutered. Then both Iran and US can make a deal without losing face and expect than US won’t break its word the next day.
I think it's giving more credit than is due to assume there's a strategy. At this stage, it seems pretty clear that a number of people are using insider knowledge of these negotiations to enrich themselves. To me this is representative of a broader pattern of looting American institutions pervasive in this administration.
At the same time, we've purged our military leadership of anyone who said "no" to Trump's plans of antagonizing Iran. A conflict many military thinkers consider un-winnable.
Iran, having spent decades preparing for this type of situation, has the clear advantage and is pressing it hard. Shy of boots on the ground (itself an incredibly bloody and possibly futile avenue) there doesn't seem to be anyway to overcome their hold on the Strait.
There is no secret strategy. The country is led by inept people who believe might makes right, and take every opportunity to enrich themselves. People are bending over backwards to make meaning of this blatant corruption and it is one way we're enabling the destruction of America.
Yes, Trump certainly did this to help Ukraine. Despite doing as much as he can to minimize US support for Ukraine since he came to office…
Also that implies he (or his cabinet) is capable of understanding basic cause and effect and thinking more than one step ahead and there is absolutely zero evidence that’s the case.
It’s Trump, not the USA, and he seems to be ruled by passions rather than logic. Mostly, his goals seem to be to seek wealth and adoration by any means necessary. Now that he’s in it, there’s no way out, and particularly no way out that doesn’t make him look like an even bigger fool. So he’ll stay in it until things get so bad he has no other choice. But that won’t stop him from lying about progress and enriching himself through the resultant stock market swings.
The American right has wanted war in Iran for decades, it was added to the "Axis of Evil" for that reason. Plenty of Americans support war with Iran in concept at least.
It's true that Trump is deranged and this war is driven partly by ego and partly by the Christian dominionist Department of War's slavish obedience to Israel and fetish for holy war.
But let's be real - gross negligence and incompetence aside war with Iran was always going to happen, somehow, under some pretext.
Well no. Iran is not in a great state and is not doing that well. They are just willing to sacrifice and suffer through several magnitudes more than US ever could.
They are doing better than before the war because they have unlocked leverage they didn't have before and now have proven survival strategies for their two biggest threats: war with the US/Israel and massive armed protests.
Yes thousands have died from the war. You say they can stomach that more than the US but for them it is a defensive war. The US could stomach such losses in a defensive war, but an offensive war against an enemy that has never once attacked US soil is a different matter
I suppose when you live under the constant threat of American imperialism, and when the US has already ginned up a revolution in your country, you have to be prepared.
And I suppose when you're the world's last superpower you start believing your own hype and assume you're invincible.
Yeah but at least the brighter ones there like Bolton would have preferred to start a war they knew they could win at least by defining some clear objectives.
The issue is not so much the war (from their perspective) but that US has no clue and at this point what it’s trying to do there.
Compared to Trump Bush was basically Napoleon in how we handled Iran and Afghanistan (at least they knew perfectly well what they wanted to achieve during the conventional part of the war and how to achieve those objectives. Fumbling the aftermath of a war he “wins” is not something Trump will have a chance to do since he’ll never get there)
We can. It’ll be hard, but sometimes you gotta buck up and do hard things instead of being lazy. We won’t do it unless we’re forced to, business as usual is simply too cozy for decision makers, politically, in capital markets, and at multinationals making decisions. Wealthy and powerful people want to remain wealthy and powerful, a tale as old as time.
2-3C means potentially >2-4 billion excess deaths over the next ~50 years from climate change. As long as global oil supply chains are low volatility and low risk, we continue on that path.
Ukraine has disabled 30-40% of Russia’s refinery capacity almost entirely with drones, for example.
TLDR it is not bad for the global oil supply chain to experience pain, it’s the primary factor in accelerating electrification and decarbonization.
That's not really the argument they are making I believe. The issue is if you suddenly cut back oil countries pivot to bringing coal back because it's the fastest to scale up.
Some places may scale up natural gas but unless a regional already has a lot of LNG infrastructure in place, a sudden drop in oil means bringing back coal.
And coal is of course far worse than oil.
Gradual sustained economic pressure will push a move to cleaner alternatives but a sudden shock leaves countries with exactly one option: bring back coal so the lights and heat/AC stay on.
>The issue is if you suddenly cut back oil countries pivot to bringing coal back because it's the fastest to scale up.
That may have been true a couple of decades ago, but as of 2023[1] it was significantly cheaper to build new solar than to continue operating existing coal plants. And building new coal plants takes 5 years.
The issue is that in a lot of places, it's not about building new coal plants. It's refurbishing and restarting old plants that have been shut down in the past decade or two.
Coal is already here but most places worked really hard to move to cleaner sources (oil being one of them) and wind down the existing coal infra.
This is part of the reason why people have been pushing nuclear SMRs (small modular reactors) given they can often be set up in existing coal plants and they just replace the coal part of the plant and reuse the existing turbines, etc since just like coal nuclear is basically a glorified steam boiler.
Asia is cancelling LNG plans for renewables, and many markets have seen EV sales explode. Coal plants are more expensive than new renewables and batteries, existing generators may run longer, but aren’t going to be built in any material amount.
China, Europe, and the US can build ~25-30M EVs per year with existing manufacturing capacity, as of this comment. That is 1/4th of global annual light vehicle sales. We can deploy ~1TW of solar PV globally annually. The world reached 3TW of total solar PV generating capacity this year. China's energy from coal has declined below 50% this year. Energy storage production continues to ramp right behind renewables. These are straightforward systems problems, there are no blockers or technical limitations.
TLDR Strongly agree existing coal generators might generate more and longer than they otherwise would, but clean tech trajectory will only get pulled more vertical from further oil energy supply shocks.
I feel as if you missed their point. Their point from my understanding is, coal might be more expensive than new renewables/batteries, but it's significantly quicker to get up and running so if you have a choice between quick coal and nothing, coal will be chosen.
I haven't looked into this deep enough, but my assumptions are that currently the supplychain for getting and installing these systems takes much longer than coal, which is a much more mature supply chain, and also not limited to China's production. If solar panels were as cheap, quick and available as coal, there'd be literally zero reason why people wouldn't use them over coal, but we know there are enough places that still use coal IE Germany.
I am not missing the point. You can deploy hundreds of megawatts of solar and batteries providing firm generation in 12-18 months. You cannot build a coal generator that quickly (usually takes 2-5 years). If you can turn on or up an existing coal generator, yes, faster. If you must build it from scratch, no, slower. Solar and batteries are not only the cheapest form of new generation, they are also the fastest to deploy.
* Since the war in Iran began in February 2026, a surge in oil and gas prices has triggered gas-to-coal switching in Southeast Asia, pushing Asia’s coal benchmark nearly 20% above the pre-war price levels and highlighting the links between the coal, gas and oil markets.
* Gas-to-coal switching also pushed coal prices up after the 2022 gas crisis, when Asia’s coal benchmark surged to a record USD 443 per tonne in September 2023.
* Renewables sit apart from the price volatility of coal, oil and gas, as they do not require ongoing fuel inputs. In 2024, solar was already cheaper than coal in 7 of the 10 member countries of the Association of Southeast Asian Nations (ASEAN), according to LCOE data.
* The current gas crisis is already causing a decline in LNG demand across ASEAN countries. New ZCA analysis shows that were ASEAN to replace its planned 45 GW gas expansion with coal, costs would rise; in contrast, we found the Association could save USD 4 billion if gas expansion plans were instead replaced with solar and storage solutions by 2030.
* Even in countries with large coal reserves and coal subsidies, including China, renewables are already meeting a significant share of new electricity demand.
You can deploy solar and batteries rapidly, Australia is doing it.
Australia has the highest number of solar panels per capita in the world. Batteries are following suit with government subsidies. Yet, Australia has some of the highest energy prices in the world, its not a fool proof solution.
My comment wasn't even really about coal, it was about oil (and fuel). I'm talking about transport (even public transport) but planes & massive tankers are the big consumers. The original point is simply we cannot just stop ships.
When ships stopped due to the routes being blocked, we pushed ever closer to a recession and people starved and died because they were denied critical produces, equipment, food and medicines all over the world. Not to mention cost of living. This is what I mean by we "cannot afford" to not use oil.
We cannot afford for the routes to be shut, we cannot ban boats, cars, planes without major economic downturn.
Australia is pretty unique since it’s extremely suitable for solar. Countries in more northern latitudes, especially in Europe (where you need alternative sources in winter regardless of how much solar you (realistically) build) are in a slightly different situation.
Also aren’t wholesale prices in Australia very cheap or often negative? If that’s the case then the issue very high prices isn’t really on the production side but due to taxes/distribution
> That’s the theory, at least. The problem is that those rising middle powers do have alternatives to meet their energy needs, thanks to the growth of renewables. Asia’s LNG-to-power market was already being aggressively undercut on price by solar, batteries and wind. The war in Iran has demonstrated that clean energy is more reliable, too. If Woodside’s main projects ever get built, they’ll find themselves trying to sell into a glutted market, which has lost all appetite for their product.
> Consider the numbers. A new gas-fired power plant in Asia needs to sell electricity for more than $100 per megawatt-hour to break even. Even existing plants, whose construction costs have long since been paid off, need $70/MWh or more if they’re fueled with LNG. Photovoltaic solar power, or PV, can be had for half the new-build price, at around $50/MWh or less. You can even add a battery and wind turbines and have round-the-clock clean electricity for less than what established gas plants are paying just for their fuel and maintenance.
> Have a look at recent announcements from utilities and generators, and you can watch bullish forecasts for Asia’s gas demand being shredded in real time. Just nine days after the start of the Iran war, a company that spent nearly a decade building a 650 megawatt LNG generator in the Philippines announced it was considering abandoning it. The gas turbines are now being sold to the US, where they’ll serve a data-center site in Indiana — not an ideal market for oceangoing LNG ships. A few weeks after that, Vietnamese conglomerate Vingroup cancelled plans to build a 4.8 gigawatt LNG power plant which would have been one of the world’s biggest, vowing to replace it with solar, batteries and wind instead. Pakistan has been backing away from LNG for several years, driven by a boom in small-scale solar and surging prices for chilled gas after the 2022 Ukraine war. LNG deals in Bangladesh and South Africa have similarly been cancelled or delayed in recent months. India’s gas generation, meanwhile, has been in decline for nearly two decades.
> These days, gas can’t even make the argument that it’s a quick route to power. All those data centers being built in the US are outbidding Asian utilities in a tight market for gas turbines, meaning the only way to acquire generators is to wait longer, or pay yet more for them. Gas is “much riskier in execution compared to PV and wind,” Abdulhameed Al Muhaidib, Chief Financial Officer of Saudi Arabian power engineer ACWA Power Co., told investors last year.
