On Politics: Iran and the Oil Crisis

This episode of The LRB Podcast explores the escalating geopolitical and economic crisis surrounding the war in Iran and its impact on global oil markets, with host James Butler joined by Professor Helen Thompson of the University of Cambridge. The discussion centers on how the closure of the Strait of Hormuz—though not physically blocked, but effectively deterred by insurance breakdowns—has disrupted global energy flows, with Western ships now unable to transit due to the collapse of shipping insurance through major institutions like Lloyd's of London. Thompson argues that this crisis reveals the deep entanglement of energy, finance, and geopolitics, showing how financial instruments like credit and insurance have become as critical as physical infrastructure in controlling energy flows. She critiques the illusion of energy security in Western nations, particularly the UK, where over 80% of energy consumption remains fossil fuel-dependent despite net zero commitments. The episode examines how both the right and left in Western politics offer incomplete solutions—drilling more in the North Sea or rapid renewable expansion—neither of which addresses the structural challenges of intermittency, storage, refining capacity, or the need for massive electrification. Thompson warns that the world is moving toward a fragmented, bloc-based order dominated by US and Chinese energy strategies, with Europe increasingly marginalized. The episode concludes on a note of profound uncertainty: the US may no longer be a reliable guarantor of maritime security, and the old assumptions about stable energy transit are permanently shattered.