Behind the latest oil shock, OPEC begins to crack

Strait of Hormuz closing could yield a generational shift in oil demand, benefiting renewables

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OPEC headquarters in Vienna. Photo: Wikipedia.

People who follow the global oil markets tend to measure important shifts in geopolitical, generational events. The Russian invasion of Ukraine in 2022. The collapse of prices at the start of the Covid pandemic in 2020. And the big one — the oil shock of 1973, when OPEC became a sinister word in Western markets.

The Iran war is no less important, as the closing of the Strait of Hormuz was something that most analysts considered so improbable that they wouldn’t even include it in their risk-planning scenarios. But last week something happened that future energy historians might someday view as the beginning of the end for OPEC, or the Organization of the Petroleum Exporting Countries.