Global Supply Shock Exposes the Myth of Energy Independence

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market, though some suffer more than others in terms of supply crunch. But all see soaring fuel prices and a very real threat of accelerating inflation, and no interest rate cuts soon.Asia experiences the biggest and most imminent disruption, while Europe loses the competition with Asia for LNG supply and remains very much dependent on gas and oil imports. The U.S., while theoretically the most secure in terms of domestic supply, is seeing unprecedented spikes in diesel and gasoline prices as the refining business remains closely linked to global oil prices. China Buffer amid Supply Shock in Asia The shock to supply in Asia is massive. This is the region most dependent on LNG and crude oil supply from the Middle East, most of which passes – or at least used to pass – through the Strait of Hormuz.Asian buyers are racing to cover supply needs with purchases of now-allowed Russian oil on tankers and crude from much further afield, including the United States, West Africa, and Brazil.Related: The Invisible Metals Powering a Trillion-Dollar Economy“While SPR releases in Japan, South Korea and potentially more countries in Asia are expected to help refiners overcome the immediate supply shortage—likely for only several weeks from late March into April—this policy band-aid will not be able to address the supply gap over a prolonged period,” Muyu Xu, senior crude oil analyst at Kpler, said earlier this week.Asian countries have hiked the use of coal for power generation, where possible, to try to limit the loss of 20% of global LNG flows due to the shutdown in Qatar and the de facto closure of the Strait of Hormuz.Asia is attracting most flexible-destination LNG cargoes away from Europe amid renewed competition for supply.But prices are so high that many countries in the region are buying only if they have to avoid emergency situations.Interestingly, China, the world’s top oil and LNG importer, is not as exposed as the massive import figures would suggest. Chinese reliance on Qatari LNG is an estimated 6% of its gas supply mix, while it has built a large crude stocks buffer at low oil prices over the past year.Still, if this “mother of all disruptions” drags on for more weeks, as it is increasingly looking that way, China would feel the full extent of the shock, too.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoTrending tickersBTC-USD Bitcoin USD 70,675.25 -72.70 (-0.10%)^GSPC S&P 500 6,506.48 -100.01 (-1.51%)^IXIC NASDAQ Composite 21,647.61 -443.08 (-2.01%)VST Vistra Corp. 146.02 -21.12 (-12.64%)UAL United Airlines Holdings, Inc. 89.95 -4.20 (-4.46%)PortfolioSign in to access your portfolioSign inTop gainersPL Planet Labs PBC 33.83 +6.87 (+25.48%)PSNYW Polestar Automotive Holding UK PLC 5.25 +0.88 (+20.14%)YSS York Space Systems, Inc. 21.07 +3.39 (+19.17%)LBTYB Liberty Global Ltd. 14.17 +2.03 (+16.72%)SEDG SolarEdge Technologies, Inc. 51.73 +6.07 (+13.29%)Top losersSMCI Super Micro Computer, Inc. 20.53 -10.26 (-33.32%)AAOI Applied Optoelectronics, Inc. 87.54 -14.38 (-14.11%)VICR Vicor Corporation 164.54 -25.59 (-13.46%)VST Vistra Corp. 146.02 -21.12 (-12.64%)FLOC Flowco Holdings Inc. 21.69 -2.76 (-11.29%)Most activeCMCSA Comcast Corporation 29.02 +0.04 (+0.14%)SMCI Super Micro Computer, Inc. 20.53 -10.26 (-33.32%)NVDA NVIDIA Corporation 172.70 -5.86 (-3.28%)RITM Rithm Capital Corp. 8.77 -0.26 (-2.88%)PLUG Plug Power Inc. 2.2300 -0.1700 (-7.08%)Top economic eventsEarnings eventsMy earnings eventsEarnings events