Tim Sahay
Visiting scholar, College of the Environment, Wesleyan University
The Polycrisis
Joint project with Kate Mackenzie
science
Net Zero Industrial Policy Lab
Co-director with Bentley Allan
Johns Hopkins University
Book project: New Geopolitics of Climate
Email: asahay2@jh.edu
Access slides: tinyurl.com/PolycrisisWesleyan
podcasts
Americans were asked to point to Iran on a map
The results reveal a significant gap in knowledge regarding a key global geopolitical region
Hormuz could be a tourist destination!
It has that MAIN CHARACTER ENERGY
Hormuz could be a tourist destination!
It has that MAIN CHARACTER ENERGY
Hormuz could be a tourist destination!
It has that MAIN CHARACTER ENERGY
Our argument in brief:
Outline of todays talk:
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1. Geopolitical Origins
Energy shocks originate in Geopolitics.
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2. Cascading Shockwaves
They cause economic-social-political shockwaves.
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3. System Change
Agents (citizens, consumers, governments, investors) respond to a new risk regime, driving fundamental transformation.
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4. This Time is Different
First energy shock in which Clean alternatives (solar, wind, EVs) are now cheap and accessible.
1. Energy shocks originate in Geopolitics
Blockades of chokepoints are about coercion & control.
Crisis Supply Disruption
(share of world oil production)
Suez Crisis (1956-57) ~10%
Arab Oil Embargo (1973) ~7%
Iranian Revolution (1978-79) ~5%
Gulf War I (1990-91) ~9%
Gulf War III (2026-Present) ~20%
Oil Transit Chokepoints
Daily transit volumes (million barrels per day)
Source: Rapidan, US EIA, my report for Europe ‘Escaping the Permanent Suez’
Hormuz Shock Magnitude vs. History
The current shock is 2X larger than any previous disruption; its duration is unknown. What we do know is that impacts cascade and amplify over time.
Source: Rapidan Energy Group, EIA, BP, St. Louis Fed, US Senate
Past US strategy of containment
Previous administrations chose sanctions over military action due to three primary risks:
The 2026 Turning Point
In act of self-sabotage, Trump amputated US state capacity across the Department of State, Pentagon, and Intelligence agencies.
This institutional erosion meant there was no administrative or congressional pushback when the decision to bomb was made in 2026.
Why Now? Why did past US Presidents sanction but not bomb Iran?
How Trump Took the U.S. to War With Iran
Inside the decision-making process behind the fateful 2026 conflict.
The Strategic Assessment
“The presentation that Mr. Netanyahu would make over the next hour would be pivotal in setting the United States and Israel on the path toward a major armed conflict in one of the world's most volatile regions.
It would lead to a series of discussions inside the White House over the following days and weeks, the details of which have not been previously reported.
Mr. Trump weighed his options and the risks before giving the go-ahead to join Israel in attacking Iran.”
Source: New York Times (2026)
Strategic Assessments vs. Reality
Geopolitical decision to go to war was based on a "Short war, easy win" thesis.
The US & Israel Thesis Assumptions
•Iranian regime was weak and brittle
•Iran’s ballistic missile and drones were limited
•Iran would not horizontally escalate by attacking Gulf kingdoms
•Iran would collapse before closing Hormuz
Each assumption was catastrophically wrong
Source: New York Times (2026)
US & Israel Military objectives thwarted by Iran
Bomb nuclear program
enrichment remains
Source: FT, WSJ, Foreign Affairs, Times of Israel
US & Israel Military objectives thwarted by Iran
Bomb nuclear program
enrichment remains
Kill leaders
same regime, more hardline
Source: FT, WSJ, Foreign Affairs, Times of Israel
US & Israel Military objectives thwarted by Iran
Bomb nuclear program
enrichment remains
Kill leaders
same regime, more hardline
Destroy navy, air force
not main threat
Hit missiles
still 1000s left in stockpile, launchers recoverable
Source: FT, WSJ, Foreign Affairs, Times of Israel
US & Israel Military objectives thwarted by Iran
Bomb nuclear program
enrichment remains
Kill leaders
same regime, more hardline
Destroy navy, air force
not main threat
Hit missiles
still 1000s left in stockpile, launchers recoverable
Strait was open
Iran tollbooth at Hormuz now. Reopening is militarily hard for US navy if not impossible
Source: Foreign Affairs, Prof Talmadge is leading US military expert on Hormuz, her 2008 classic
US & Israel Military Objectives Thwarted by Iran
Despite military pressure, Iran's strategic and conventional capabilities remain resilient.
Bomb Nuclear Program
Failure: Enrichment Remains
Iran's nuclear activity has expanded rapidly despite thwarting attempts.
Kill Leaders
Same Regime, More Hardline
Regime was strong and deeply institutionalised and not weak or brittle.
Destroy Navy & Air Force
Not the Main Threat
Conventional forces are secondary to asymmetric and missile capabilities.
Hit Missiles
Stockpile Remains
Thousands of missiles left in stockpile; launchers are recoverable.
Keep Strait of Hormuz Open
Iran "Tollbooth" Active
Reopening the strait is militarily hard for the US Navy, if not impossible, given Iran's strategic positioning.
Source: FT, WSJ, Foreign Affairs, Times of Israel
2. Energy shocks cause economic-social-political shockwaves
Economic pain
Widespread distress across sectors.
Source: UNCTAD
Politicians heads roll
Political accountability and anti-incumbency electoral waves
Societies Boil
Rising social unrest and civil instability.
Shortages & Cascading Disruptions
Impact on fuels, fertilizer, food, and industrial inputs
Critical Dependencies
No Oil
➔ No diesel, petrol, or jet fuel
No Gas
➔ No ammonia fertilizer or cooking gas
No Sulfur
➔ No sulfuric acid for metal processing
No Helium
➔ No AI chips or MRI machines
No Oil (Plastics)
➔ No plastics for cars & consumers
Source: Financial Times, IEA
Ugly rich vs poor politics of BIDDING WARS in shortages.
We saw it with masks, vaccines,energy in 2020-23
For some progressive policy options to avoid bidding wars: Weber & Semieniuk
Source: FT; Adam Hanieh on Food Crisis
3. Then system change as agents respond (citizens, consumers, governments, investors) to new risk regime
3. Structural System Change
Agents are responding to a new risk regime
groups
Citizens
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Consumers
account_balance
Governments
trending_up
Investors
These collective responses trigger permanent shifts in investment behavior and future demand.
Permanent Shift in Hydrocarbon risk regime
Two wars in four years. Volatility and future expectations of volatility is driving systemic changes in investment and demand. Governments, consumers, and investors are forced to adapt in a new risk regime.
Why has the risk regime shifted?
Geopolitical Risk:�Future Gulf security order remains tenuous.
Strategic Chokepoints:�Hormuz shipping reduced to a "trickle."
Infrastructure Damage:�Lasting damage to oil assets across Persian Gulf.
Supply Shock:�10 mb/d oil wells shut in (IEA).
Source: New yorker; BBC
Permanent Shift in Hydrocarbon risk regime
Two wars in four years. Volatility and future expectations of volatility is driving systemic changes in investment and demand. Governments, consumers, and investors are forced to adapt in a new risk regime.
Why has the risk regime shifted?
Geopolitical Risk:�Future Gulf security order remains tenuous.
Strategic Chokepoints:�Hormuz shipping reduced to a "trickle."
Infrastructure Damage:�Lasting damage to oil assets across Persian Gulf.
Supply Shock:�10 mb/d oil wells shut in (IEA).
Permanent Shift in Hydrocarbon risk regime
Two wars in four years. Volatility and future expectations of volatility is driving systemic changes in investment and demand. Governments, consumers, and investors are forced to adapt in a new risk regime.
"...Based on reported vessel counts, we estimate that average daily flows through the Strait of Hormuz are down 92% from their normal levels"
— Goldman Sachs
Why has the risk regime shifted?
Geopolitical Risk:�Future Gulf security order remains tenuous.
Strategic Chokepoints:�Hormuz shipping reduced to a "trickle."
Infrastructure Damage:�Lasting damage to oil assets across Persian Gulf.
Supply Shock:�10 mb/d oil wells shut in (IEA).
Shift in Global Energy Risk Regime
Why has the risk regime shifted?
Geopolitical Risk:�Future Gulf security order remains tenuous.
Strategic Chokepoints:�Hormuz shipping reduced to a "trickle."
Infrastructure Damage:�Lasting damage to oil assets across Persian Gulf.
Supply Shock:�10 mb/d oil wells shut in (IEA).
Shift in Global Energy Risk Regime
Why has the risk regime shifted?
Geopolitical Risk:�Future Gulf security order remains tenuous.
Strategic Chokepoints:�Hormuz shipping reduced to a "trickle."
Infrastructure Damage:�Lasting damage to oil assets across Persian Gulf.
Supply Shock:�10 mb/d oil wells shut in (IEA).
“... more than 60 energy infrastructure assets in the Gulf have been affected by drone and missile strikes”
Shift in Global Energy Risk Regime
Why has the risk regime shifted?
Geopolitical Risk:�Future Gulf security order remains tenuous.
Strategic Chokepoints:�Hormuz shipping reduced to a "trickle."
Infrastructure Damage:�Lasting damage to oil assets across Persian Gulf.
Supply Shock:�10 mb/d oil wells shut in (IEA).
Government reaction: Electrification offers a structural exit from a system that is now fundamentally unstable.
A shared logic of sovereignty & electrification across energy, industry, and defense
Electrification as a shock absorber
Reducing vulnerability to fossil fuel price spikes through domestic clean energy.
Industrial transformation
Modernizing the industrial base to compete in the new global green economy.
Electrotech as a FX hedge
Saving dollars by reducing the need for foreign currency to import fossil fuels.
Source: Ember
Govt reaction: Electrification as a shock absorber
Renewables-heavy Spain as a global role model
Rapid Green Transition
In the last decade, Spain has radically greened its electricity mix: 60% renewables by 2025 with a target of 82% by 2030.
Growth in solar and wind (doubling in just 6 years) has effectively absorbed the shock of high fossil fuel prices.
Structural Decoupling
"Spain's renewables build-out has structurally decoupled its electricity prices from gas markets."
15% of hours gas sets price in Spain
90% of hours gas sets price in Italy
— Jan Rosenow, Professor of Energy Oxford
Source: Ember | The New York Times
4. This time is different.
This is the first energy shock in which clean alternatives to oil and gas — solar panels, wind turbines, electric vehicles and batteries — are both cheap and accessible.
Our work was featured in New York Times here https://www.nytimes.com/2026/04/01/opinion/oil-crisis-iran-electric-solar.html
4. This time is different.
This is the first energy shock in which clean alternatives to oil and gas — solar panels, wind turbines, electric vehicles and batteries — are both cheap and accessible.
Bottom-up surge in Demand from consumers wanting electrotech
BYD is now doing a fortnight's worth of sales each day…”Wang singled out markets such as Australia,New Zealand.., where he said daily sales volumes are now as high as what the carmaker could previously sell in two weeks"
4. This time is different.
The first energy shock with cheap, accessible clean alternatives
Defining Electrification Signals
True system change requires distinguishing between temporary relief and permanent substitution away from oil & gas. Fuel tax cuts and emergency oil releases are not electrification.
Surge in Demand
"Solar panel sales have risen sharply... households are opting for bigger arrays. Sales were up 54% this month."
4. This time is different.
This is the first energy shock in which clean alternatives to oil and gas — solar panels, wind turbines, electric vehicles and batteries — are both cheap and accessible.
Bottom-up surge in Demand from consumers wanting electrotech
Octopus Energy, the biggest GB energy supplier…its heat pump orders had more than doubled in March compared with February…and new leases of electric vehicles rose by more than 85%. We’re seeing a massive shift as people take matters into their own hands – switching to solar, heat pumps and EVs, locking in low running costs and shielding themselves from future price shocks.”
Investors are responding to demand signals
Note: Data reflects percentage appreciation as of March 10, 2026.
Source: Bloomberg, Jefferies, S&P Global
“Shares in CATL, BYD and Sungrow, which produce batteries and energy storage equipment, have outperformed global oil majors such as Chevron, ExxonMobil and BP since the war began.”
Governments making structural long-term policy shifts towards electrification
Indonesia's Strategic Pivot
Heavy on Coal & Palm Oil, Indonesia was way behind the Solar boom across Asia in the last decade but is now making rapid changes.
Signal: Expect electrification of end-uses: cars; heating+cooling; industry
Track policy responses at Global Energy Crisis Policy Monitor, Carbon Brief, CREA
Governments making structural long-term policy shifts
France: Doubling Down on Electrotech
Policy changes are accelerating globally. France is leading with a massive commitment:
Signal: Expect electrification of end-uses: Cars • Heating/Cooling • Industry
Source: France govt
Governments making structural long-term policy shifts towards electrification
🇨🇳 China: Record Solar Exports
50 countries set records for Chinese panel imports in March, reported by Ember.
🇰🇷 South Korea: Turning Point
Crisis labeled a "significant turning point"; committing to 100 GW of renewables by 2030.
🇹🇷 Turkey: $80B Investment
Pledged $80 billion for renewable energy projects by 2035.
🇻🇳 Vietnam: Coal Phase-Out
Phasing out coal from new infrastructure starting after 2030.
🇹🇭 Thailand: Diversifying away from LNG toward domestic renewables.
🇸🇬 Singapore: Government calls crisis "wake up call" , EV subsidies extended to 2027.
"Ok hang on, so you are saying the demand for electrotech is going to step-change up during & after the Iran war..."
Is there going to be a problem on the supply-side?
Are there enough factories to churn out products as fast as they are demanded?
The answer is Yes. Many times over.
The global green industrial manufacturing buildout of the last few years was led by China, but race was sequentially joined by many countries green industrial policy
The global green industrial manufacturing buildout of the last few years was led by China, but race was sequentially joined by many countries green industrial policy
Our Key Finding
Leading Chinese solar, battery, and EV companies have sharply increased foreign factory investment plans.
$210B+
Pledged since 2022
A Marshall Plan's worth of Green FDI
Source: Xiokang Xue, Mathias Larsen. China’s Green Leap Outward (NZIPL report). Coverage in Bloomberg, Phenomenal World, Bill McKibben
China's Green Energy Dominance & Global Expansion
Key Market Dynamics
Manufacturing capacity for solar PV, wind, EV batteries is ~2X bigger than current sales.
China's overseas green maufacturing are reaching record highs, dominated by Solar, battery and EV factories.
Export destinations are shifting, with Emerging Markets becoming critical growth drivers
Global Green Industrial Buildout had a problem: underdemand not overcapacity. Iran war accelerates electrotech demand
The Real Problem
Mid-2020s issues were not overcapacity, but underdemand—a lack of coordinated global demand.
Core Argument
Two war-driven fossil shocks lead to a new risk regime and a step change upwards in global electrotech demand.
Global Green Industrial Buildout had a problem: underdemand not overcapacity. Iran war accelerates electrotech demand
The Real Problem
Mid-2020s issues were not overcapacity, but underdemand—a lack of coordinated global demand.
Core Argument
Two war-driven fossil shocks lead to a new risk regime and a step change upwards in global electrotech demand.
Source: Ember CleanTech explorer
Electrification offers a structural exit from a system that is now fundamentally unstable
Consumer Demand
A bottom-up surge in "electrotech" demand. Globally consumers are switching to solar, heat pumps, and EVs to shield themselves from energy price shocks.
Investor Response
Capital is flowing into battery and energy storage leaders like CATL and BYD, which are outperforming traditional oil majors.
Policy Pivot
Governments from Spain, France to Indonesia are making long-term structural shifts towards renewables and end-use electrification.
Key Takeaway: This energy shock is different because clean alternatives are now cheap and accessible.
What can derail the acceleration towards an electric world order?
Macroeconomic Instability
Global recession or stagflation killing global demand for clean energy technology. High interest rates and debt burdens hurt electrotech demand & capital expenditures
Geopolitical Breakdown
Radicalization of Carbon Interests
Ecological Tail Risks
Sudden climactic instability (e.g., strong El Niño predicted for 2026) or hitting well-known global warming tipping points.
For more, Leusder rebuttal to my optimistic catastrophism.
Radicalization of Oil Interests: Buying elections & Redistribution
“Fossil fuel price shocks are redistribution shocks. The rich reap the windfall profits and the many are burdened by cost.” – Weber & Semieniuk
Post-Invasion Global Profits
Following Russia's invasion of Ukraine, the global oil industry generated $916 billion in profits.
U.S. Windfall Gains
The U.S. raked in $301 billion, roughly seven times the pre-COVID annual average for U.S.-headquartered companies.
Inequality Gap
50% of profits went to the top 1% of richest Americans, while the bottom 50% received only 1% of profits.
Source: NPR; Weber, Semieniuk et al (2025)
Q. Won’t Asia turn exclusively to coal? Isn’t this gas to-coal switch what people are worried about given entrenched coal interests across Asia?
Analysis by CREA
Global fossil power generation fell in March after Hormuz closure due to solar & wind growth.
Fall in gas-fired generation offset by large increases in solar & wind power, not coal.
Sector Impact
Not in the Power sector. Slightly more likely in coal-to-chemicals industrial sector.
Source: Lauri Myllyvirta, CREA
To recap our argument in brief:
Conclusions: The ‘Cunning of History’
In 547 BC, Croesus of Lydia — the richest king on earth — sought guidance from the Oracle of Delphi.
“Should I attack Persia?”
Oracle: “A great empire will fall.”
Reassured, he attacked.
….but it was his empire that fell.
The paradoxes of the Iran war mirror this Delphic prophecy.
Source: Polycrisis ‘war on Iran’; ‘War Ecology’ by Charbonnier; ‘The Reckoning’ by Mona Ali; US facing strategic defeat by Policytensor
Conclusions: Like the Delphic oracle’s prophecy... the ‘Cunning of History’
EMPIRE
FOSSIL FUELS
Conclusions: The ‘Cunning of history’
The dawn of the Electric World Order
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EMPIRE
The war on Iran began with a belief in overwhelming US military power but is turning into a reckoning of its limits given Iranian resolve and capabilities.
electric_bolt
FOSSIL FUELS
The most fossil fuel friendly government in US history has shown the world how risky oil and gas can be.
Hydrocarbons are increasingly seen as a vector of insecurity and scarcity. Electrification offers a structural exit from a system that is now fundamentally unstable.
Source: Polycrisis ‘war on Iran’; Polycrisis ‘ dawn of electric world order’; ‘War Ecology’ by Charbonnier;
‘The Reckoning’ by Mona Ali; US facing strategic defeat by Policytensor
Take home message:
2 wars in 4 years will trigger a permanent risk regime shift. Oil and gas are no longer reliably available when needed, at bearable prices. The geopolitical conditions that once stabilized them are gone.
Electrification offers a structural exit from this system.
Q & A slides
Q. But aren’t you too optimistic about speed of electrotech rollout? Isn’t the Trump government trying to roll back climate action at home and pushing fossil fuels abroad?
Trying doesn’t mean succeeding! The world is bigger than the American petrostate.
Source: Mark Blyth LSE 2026
Q.Is the Global South actually leapfrogging to electrotech?
Electricity is growing rapidly in emerging economies
Many countries are overtaking the United States' levels of electrotech uptake
If Pakistan can, anyone can
Haneea Isaad (IEEFA) in our very first podcast episode on Pakistan’s bottom-up boom after Ukraine war driven shortages
EV Sales in Emerging Markets Surge 80% in 2025
Market Highlights
Electric car sales in selected markets, 2021-2025
Source: IEA (2025). Data covers BEV and PHEV sales across major emerging economies.
Q.Is the Global South actually leapfrogging to electrotech?
With EV-ICE price parity, tipping point dynamics
Market Highlights
Source: 2026 Financial Times “EV ownership at ‘tipping point’ in many parts of the world, experts say”
Q.Is the Global South actually leapfrogging to electrotech?
Q. What does Iran war and electric world order mean for future of dollar?
Q. The 1970s oil crisis lead to a new political-economic neoliberal order, what kind of new order will arise from 2020s energy crisis? Who will do that “new world order” ordering?
"The pre-2025 trading system was centred on the US. Think of it as a cathedral: a single structure designed and maintained by American leadership. The architect burnt down the cathedral. What replaces it looks very different."
— Richard Baldwin
World War Trade: Conflict and the Emergent World Trading Order
Q. Won’t Asia turn exclusively to coal? Isn’t this gas to-> coal switch (ie. shortage of imported gas leads to more reliance on domestic, secure and affordable coal) what people are worried about?
Not in the Power sector. Slightly more likely in coal -> chemicals industrial sector.
Analysis by CREA: Global fossil power generation fell in March after Hormuz closure due to solar & wind growth
Fall in gas-fired generation offset by large increases in solar & wind power, not coal
Source: Lauri Myllyvirta, CREA
Q. Won’t Asia turn exclusively to coal? Isn’t this gas to-> coal switch (ie. shortage of imported gas leads to more reliance on domestic, secure and affordable coal) what people are worried about?
“Everyone seems to think coal will get a big lift because of the oil & gas crisis, except for the professionals - the traders and plant operators. They're buying less of the stuff in April, not more. Note this includes within-country shipments which are big in e.g. China, Indonesia.”
Source: Lauri Myllyvirta, CREA
2000-2026 Gas boom being replaced by battery storage + electrification is possibly the biggest energy story of the next decade
Asia was supposed to be an enormous growth market for LNG.
Not anymore. Shortages, spiking prices, massive uncertainty. Asia is moving to renewables instead
“Gas’s reputation as a reliable and affordable energy source has taken a serious hit, and plans for its speedy adoption in Asia’s developing nations have been derailed”
Many expected the LNG shock to push countries back to coal – but that's not what's happening.
Global coal generation was unchanged in March, even as gas prices surged. The fall in gas-fired generation was covered by growth in wind and solar.
Why a widespread return to coal is unlikely:
The scale is smaller than it seems
Gulf LNG replacement would only require ~100M tons of coal—a fraction of the 9B ton global market.
China's coal use dropped by 90M tons last year.
Weather shifts in the Yangtze basin alone can swing usage by 140M tons.
Other supply shifts also matter
New US LNG capacity offsets ~41M tons of coal.
One Japanese nuclear restart replaces 1/3rd of Japan's Gulf gas imports.
2025 wind/solar additions generate 2x the energy of all LNG previously passing through Hormuz.
Source: Lauri Myrlvirta, CREA
Q. Are there policy forums where countries are thinking more cooperatively to address international spillovers of domestic policies?
Multilateral efforts face challenges from domestic politics, but cooperative frameworks exist.
Building Protection - IMF, World Bank and International Energy Agency
Forums addressing fuel and food price shocks through joint multilateral action.
International Monetary Fund (IMF)
New food shock window for urgent balance of payments problems under consideration as it was after 2022 Ukraine war food and energy crisis
Global Energy and Food buffers
International cooperation to mitigate market distortions and minimize fallout.
Q. But won’t more electrotech lead to more EXTRACTION?
"Although the oil-to-power comparison is fraught with caveats, oil takes some 200–400 tonnes of material to produce one gigawatt hour of energy, compared with less than 50 tonnes for solar power or batteries”
Source: good resource from Gernot Wagner et al 2026 (Columbia) https://business.columbia.edu/insights/climate/minerals
The IMF has cut its global growth forecast by 1.3 percentage points to 2%, the threshold for a global recession, warning explicitly of stagflation risk: inflation up, activity down – the central banker’s nightmare.
What is stagflationary tail risk?
Longer that war goes on, the more cascading disruptions cause generalized inflation and force central banks to raise interest rates.
“Stagflation is a tail, but a thickening one with fewer exits than the consensus models. The optimists need to beat all of that simultaneously, and the argument for doing so keeps running into the same problem: it requires a world in which almost nothing that is currently happening continues to happen”
Alternative: On-Farm Production of Green Fertilizers via Agrivoltaics
“...up to 96 percent of ammonia-based fertilizer could be competitively produced at farm scale by 2030.”
— Tonelli and Rosa
Key Technologies:
Source: Paper, Lecture video: https://www.youtube.com/watch?v=68R_8tIG_RE
Will Latin America be a winner of the Iran war?
"The region 'does not replace the Middle East, but it meaningfully mitigates concentration risk by combining stable investment environments...'
- Radhika Bansal, Rystad Energy
This positions Latin America as 'one of the most important contributors to global oil supply growth over the coming decade.'
Growth Outlook
"About 44% of global crude supply growth between 2025 and 2030 is expected to come from Brazil, Guyana, Argentina and Venezuela."
Source: Rystad Energy / Upstream / IEA
Mexico is slow on solar plus battery storage. But the boom is playing out across the border, squeezing out gas
People still talk about energy storage as the missing piece that will eventually make renewables work. In Arizona, it's already >20% of total capacity and still climbing. At some point "the future" becomes "this year's data."
Source: Michael Liebreich