The Long Shadow of the Iran Shock

By almost any measure, the world should be suffering a far more severe energy crisis. The Strait of Hormuz, through which roughly one-fifth of global oil and liquefied natural gas supplies normally passes, has been largely closed for months. Yet when considered against the nightmare scenarios contemplated at the war’s outset, oil prices have remained low and natural gas markets have proved resilient. The global economy has so far avoided the kind of recession that many past energy shocks produced.