Letter: Heads up, Juneau

As I write this the Strait of Hormuz remains closed, with no prospect of reopening anytime soon. The result, with a roughly 60-day time lag as the last tankers from the Middle East are emptied and refineries and governments draw down reserves, is growing into the biggest energy shock in the history of industrial civilisation. 

Estimates vary from mid-May to early June of 2026 as the timeframe when actual physical shortages begin to materialize around the world, although Europe's and Asia's particular vulnerability has already seen fuel rationing, fuel surcharges on transport of all kinds, and mass flight cancellations. According to the 2026 Energy Crisis Policy Response Tracker on the International Energy Agency (IEA) website, several of the most vulnerable economies in Asia and Oceania have already declared national emergencies.

Bigger problems are just over the horizon, though. As oil industry expert Christof Rühl writing in the Financial Times warns:

“Oil consumption today is more concentrated in high-value uses and in areas where there is no substitute, like road or air freight and maritime shipping. These are load-bearing economic activities, less price sensitive than discretionary or consumption-oriented drivers of growth. Once disrupted they are likely to cascade through the economy…"

“Today, price increases will hit the high-value use of oil which cannot be substituted...Oil concentrated in high-value uses is a little bit like rare earths, tiny compared with the size of GDP but essential for much of it. If the size of a supply disruption requires demand to come down and prices [to] surge to the required level, the response will be sudden with a potentially unforeseen and disproportionate impact on economic activity.”

By far the bigger threat comes from the looming shortages of diesel fuel and fertilizer, which threatens to cripple agriculture and essential transport. Shipping fuel is also getting harder to access, and this spells catastrophe to a local economy which is dangerously exposed to fragile supply lines. This is all the more dangerous because it is entirely beyond government control. While a competent local government would have ALREADY begun rationing diesel fuel, it would take coordinated international action to manage global shipping fuel shortages. This can only mean that, even if essential transport might be maintained within Southeast Alaska, if the supplies we depend upon fail to reach our ports, it will make no difference. The stores will still be empty and the gas stations will still be closed.

What this adds up to is an economic and political crisis on a scale that no previous generation has ever had to deal with. Juneau needs to prepare, and soon.

Jerry McManus

Juneau