Mordechai Chaziza and Roie Yellinek

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May 10 2026

The global economy is currently experiencing asystemic shockof unusual magnitude. The closure of the Strait of Hormuz, through which roughlyone-fifthof global oil consumption and about a quarter of seaborne oil trade normally flows, has disrupted a critical artery of the international energy system. Combined with escalating confrontation with Iran, the disruption has driven prices sharply upward and heightened the risk of a prolonged global downturn. However, this is not a black swan. It is the materialization of agrey rhino: a high-probability, high-impact threat that policymakers repeatedly identified but failed to address. The central question, therefore, is not why thecrisisoccurred, but why advanced economies remained structurally unprepared despite clear warning signals. The deeper failure was not simply poor contingency planning. It was a political-economic logic that systematically privileged efficiency over resilience.

Western energy systems were designed to minimize costs in normal times, not to absorb shocks in moments of geopolitical rupture. Deterrence reinforced this bias by making disruption appear unlikely; the energy transition accelerated it by weakening legacy redundancy before alternatives were fully mature; and democratic fiscal and electoral constraints locked it in by making costly preparedness politically difficult to sustain. The crisis, therefore, exposes not three separate failures, but a single mechanism: the chronic underproduction of resilience in systems optimized for short-term efficiency. This imbalance is not simply an economic liability; it is becoming a structural feature of geopolitical competition, as states that can sustain resilience gain increasing leverage over those that cannot.

The immediate effects of the crisis extend well beyondoil markets. Price volatility haspropagatedthrough supply chains, affecting agriculture, chemicals, and advanced manufacturing. Growth forecasts have been revised downward, with several major economies now hovering near recessionary thresholds. More importantly, the disruption has triggered a cascading triple shock: rising energy prices, food insecurity, and slowing growth. These effects are especially acute indeveloping economies, where fiscal constraints limit the ability to absorb external shocks. The crisis thus exposes not only the fragility of energy markets but also the tight coupling ofglobal supply chainsto a small number of geographic chokepoints. The Strait of Hormuz is not merely atransit route; it is a systemic node linking energy flows to petrochemicals, fertilizer production, shipping insurance, and financial expectations. When such a node fails, the effects ripple across the entire global economy. In such conditions, control over disruption or the capacity to withstand it becomes a source of strategic influence. Energy vulnerability is no longer simply a market risk; it is emerging as a lever of geopolitical power.

Deterrence was the first mechanism through which efficiency displaced resilience. For decades, Western policymakers assumed thatmilitary presenceand economic coercion would be sufficient to deter major disruptions in the Gulf. This assumption fostered anillusionof stability that proved deeply misleading. Deterrence did not eliminate risk; it obscured it. The result was chronic underinvestment in resilience. Building alternativeinfrastructure, whether bypass pipelines, expanded storage, or diversified overland routes, required large, long-term capital commitments. In a policy environment dominated by cost efficiency and short-term returns, such investments were repeatedly deferred. Over time, this produced a structural vulnerability: a system optimized for efficiency in normal conditions but brittle under stress. The energy transition accelerated the same underlying bias by reducing investment in legacy buffers before renewable systems could provide equivalent strategic depth. The global push towarddecarbonizationhas unintentionally reinforced this vulnerability.

Over the past decade, governments and firms have reduced investment in fossil-fuel infrastructure in anticipation of a transition to renewables. Nevertheless, the transition remainsincomplete. Renewable energy still accounts for only aminorityshare of total energy consumption when transportation, heavy industry, and heating are included. The problem, therefore, is not the transition itself but its sequencing. The dismantling of legacy energy systems has outpaced the construction of resilient alternatives. Instead of reducing dependence on Middle Eastern hydrocarbons, the transition has, at least in the short-term, narrowed the systems margin for error. At the same time, the shift to clean energy has introduced new dependencies. Supply chains forcritical mineralsand advanced energy technologies are highly concentrated, creating fresh vulnerabilities even as older ones persist. The result is not a reduction in geopolitical risk but its transformation.

Institutional constraints locked this vulnerability into place. Even when risks were visible, liberal democracies struggled to finance redundancy because their political and fiscal systems rewarded immediate affordability over long-term preparedness. Global infrastructureneedsare projected at roughly $97-106 trillion by 2040, with a persistent investment gap of $15-18 trillion. At the same time, many advanced democracies face debt burdens above 100 percent of GDP, limiting fiscal space for long-term capital spending.

Liberal democracies face structural barriers to long-term investment in resilience. Electoral cycles reward short-term gains, while large-scale infrastructure projects require sustained commitment and impose visible costs long before they deliver benefits. Fiscal constraints further complicate the picture. High debt levels and competing domestic priorities limit the political appetite for costly redundancy. As a result, investments in storage capacity, supply diversification, and infrastructure resilience are often postponed or scaled back.

This dynamic contrasts sharply with the behavior of morecentralized systems, which face fewer domestic constraints on long-term planning. The divergence has produced asymmetries in preparedness that are now becoming visible under crisis conditions. This asymmetry is likely to shape geopolitical competition in the coming decade, as states with greater buffering capacity can absorb shocks, stabilize domestic markets, and exert influence over more exposed economies. China matters in this argument not because it escaped vulnerability, but because it illustrates an alternative strategic logic: accepting short-term inefficiency to build long-term buffering capacity.

China offers a revealing counterpoint. As the worlds largest energy importer, Beijing has long recognized thevulnerabilitiesinherent in maritime dependence, often framed as theMalacca dilemma. China has responded by diversifying supply sources, building overland pipeline routes, expanding strategic stockpiles, and investing heavily in grid integration and domestic clean-energy capacity. Rather than relying on deterrence or market stability, China has pursued a comprehensive hedging strategy. Thisapproachcombines several elements: diversification of supply sources, expansion of overland pipelines, accumulation of large-scale strategic reserves, and sustained investment in both fossil and renewable energy systems. By the end of 2025, Chinas combined strategic and commercial crude oil inventories were estimated at roughly1.4 billion barrels(thelargest strategic oil reservesin the world), exceeding the aggregate strategic reserves of many advanced economies.

At the same time, China had established a dominant position in key segments of the clean energy supply chain, includingsolar panelsand lithium-ion batteries, with recent assessments putting its share near 85 percent of solar manufacturing capacity and about 80 percent of battery supply-chain capacity. This dual-track strategy, reinforcing legacy energy security while investing in future systems, has enhanced Chinas ability to absorb shocks and maintain flexibility under stress. This approach carries costs, including inefficiencies, overcapacity, and potential misallocation of resources, but it nonetheless strengthens Chinas capacity to absorb shocks. In a more competitive international environment, such capabilities do not simply mitigate risk; they create the conditions for managing, leveraging, or even strategically exploiting disruption. China remains exposed to global disruption, but its approach reflects a fundamentally different strategic logic: one that prioritizes resilience alongside efficiency, rather than treating the two as mutually exclusive.

The crisis reveals more than uneven preparedness, it exposes a structural asymmetry between systems optimized for efficiency and systems organized around resilience. Liberal market economies tend to reduce spare capacity, rely on price signals, and defer investments that appear unnecessary in normal times. Morecentralized systems, by contrast, are better positioned to sustain long-term investments in resilience. They can absorb inefficiencies in the short-term in order to mitigate risks over longer horizons. This is not simply a policy difference but a structural asymmetry: the strengths of one model in normal times become liabilities under conditions of disruption. The implications are clear. Energy security can no longer be treated as a byproduct of market efficiency or deterrence. It must be understood as a core component of national and economic security.

Four priorities stand out. First, diversification of supply routes is essential. Expanding alternative transport corridors, increasing storage capacity, and reducing reliance on single chokepoints can enhance system resilience. Second, governments must adopt longer time horizons in energy planning, insulating strategic investments from short-term political pressures. Third, technological innovation, particularly in energy storage and grid management, will be critical to improving flexibility. Finally, energy policy must be integrated with broader economic security strategies, including food systems and industrial supply chains. Energy security is thus no longer a technical policy domain but a central component of grand strategy, shaping states capacity to compete, project stability, and absorb systemic shocks.

Without a structural shift from efficiency-first energy policy to a resilience-centered strategy, advanced economies will remain exposed to foreseeable, preventable shocks. In an era of geopolitical fragmentation, energy shocks will increasingly be instruments of strategy rather than exogenous disruptions. States will not only seek to withstand such shocks but to anticipate, shape, and exploit them. The central question is no longer resilience alone, but control. In other words, who can manage disruption, and who will be forced to absorb it?

Further Reading on E-International Relations

• The Jordanian Response to the Syrian Refugee Crisis from a Resilience Perspective
• The Power of Energy: The Geopolitics of the Energy Transition
• Neo-Colonial Subjectivities in Resilience Praxis and the Urgency to Think Beyond Inclusion
• Is Resilience Thinking a Form of Eugenics?
• Resilience for Moldovas Future: Can NATO Provide Greater Support?
• Oil During COVID-19: Essential Service or Subsidized Resource?

About The Author(s)

Dr. Mordechai (Moti) Chazizais a senior lecturer in the Department of Politics and Governance and the Division of Multidisciplinary Studies in Social Science at Ashkelon Academic College, and a research fellow in the Department of Asian Studies at the University of Haifa. He is a co-author ofEmerging Middle Powers in the Middle East: Niche Diplomacy in the 21st Century(Routledge 2026).

Dr. Roie Yellinekis the Co-Director of the Geopolitics Lab. Previously, he worked as a security & strategic consultant, a research associate at the Begin-Sadat Center for Strategic Studies (BESA), a non-resident scholar at the Middle East Institute (MEI) in Washington, and as a lecturer at Ono Academic College and Reichman University.

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