Energy, the economy and the future: Energy, war and security

3.1 Wars are fought with energy, and sometimes for it

Military power has always depended on concentrated energy. Pre-modern armies ran on food for soldiers and fodder for horses, and campaigns were limited by how far that food could be carried. The industrial wars of the twentieth century ran on coal, steel and, above all, oil. In the First World War, motor trucks, tanks and aircraft appeared alongside millions of horses. By the Second World War oil had become decisive. Germany's lack of crude oil shaped its drive towards the Caucasus and its large investment in synthetic fuels made from coal, and the US oil embargo on Japan in 1941 helped push Japan towards war. Allied bombing of German synthetic fuel plants in 1944 then crippled its air force and armour.

Energy facilities are also targets. Power stations, refineries, pipelines and grids have been attacked in almost every modern war, most recently in Russia's repeated strikes on Ukraine's electricity system and Ukraine's drone attacks on Russian refineries. A modern economy without electricity grinds to a halt within hours.

Weapons themselves tell a story of rising energy concentration. Gunpowder releases about 3 MJ per kilogram and TNT about 4.2 MJ. Nuclear weapons broke the scale entirely. Smil notes that the Hiroshima bomb of 1945 released about 63 TJ, equivalent to roughly 15,000 tonnes of TNT, and that the largest thermonuclear device ever tested, the Soviet Tsar Bomba of 1961, released about 210 PJ, more than 3,000 times as much.

In Numbers Don't Lie Smil also traces the long shadow of the First World War: its industrialised killing, the collapse of empires and the upheavals that followed shaped much of the century. Energy did not cause these wars, but it set their scale, their logistics and their destructive reach. It also gives strategic weight to whoever controls fuel supplies, which is the subject of energy security.

• Smil, Energy and Civilization: A History (2017) · via Smil Mastery Course, M13 'Prices, real costs and energy in war'
• Smil, Numbers Don't Lie: 71 Stories to Help Us Understand the Modern World (2020) · via Smil Mastery Course, M13 'Prices, real costs and energy in war'
• Smil, Global Catastrophes and Trends: The Next Fifty Years (2008) · via Smil Mastery Course, M13 'Prices, real costs and energy in war'

3.2 Energy security means reliable supply at affordable prices, and its risks keep changing

The IEA defines energy security as the uninterrupted availability of energy at an affordable price. The modern idea was born in the oil shocks of the 1970s. In 1973 Arab producers cut output and embargoed some importers, and oil prices roughly quadrupled within months. The following year importing countries set up the International Energy Agency, and its members agreed to hold emergency oil stocks equal to at least 90 days of net imports and to share supplies in a crisis. A second shock followed the Iranian revolution of 1979.

For oil importers the core risks remain. India imports most of its crude oil, much of it from the Gulf through the Strait of Hormuz, and holds a strategic petroleum reserve of 5.33 million tonnes in underground rock caverns at Visakhapatnam, Mangaluru and Padur, on top of commercial stocks. A price spike hits its trade balance, inflation and the rupee all at once.

Gas brought a different exposure, because pipeline gas ties buyer and seller together for decades. Europe learned this in 2022. Liquefied natural gas has since made gas more of a global market: a cargo can go to whichever buyer pays most, which brings flexibility but also exposes poorer importers to bidding wars. The IEA's 2025 Outlook expects a wave of new LNG export capacity to push prices down later this decade.

The transition changes the map of security rather than removing it. A country that runs on domestic solar and wind is less exposed to fuel imports and their price swings. But it becomes exposed instead to supply chains for panels, batteries and the minerals in them, whose mining and especially processing are concentrated in a few countries, chiefly China. An electrified economy also depends on grids that must withstand heatwaves, floods, storms and cyber attacks, and the IEA stresses that resilience to extreme weather is becoming more critical. Security now means diverse suppliers, stocks of materials as well as fuels, domestic manufacturing where it makes sense, and robust grids.

• Smil, Energy at the Crossroads: Global Perspectives and Uncertainties (2003) · via Smil Mastery Course, M13 'Prices, real costs and energy in war'
• Smil, Global Catastrophes and Trends: The Next Fifty Years (2008) · via Smil Mastery Course, M13 'Prices, real costs and energy in war'
• IEA, A 10-Point Plan to Reduce the European Union's Reliance on Russian Natural Gas (2022) · Russian share of EU gas imports and use in 2021, https://www.iea.org/reports/a-10-point-plan-to-reduce-the-european-unions-reliance-on-russian-natural-gas
• IEA, World Energy Outlook 2025 (2025) · Overview and key findings, https://www.iea.org/reports/world-energy-outlook-2025/overview-and-key-findings
• ACCR, Investor bulletin: IEA World Energy Outlook 2025 (13 November 2025) · comparison of WEO 2025 scenarios with the 2015 and 2019 editions, storage capacity by scenario, https://www.accr.org.au/downloads/13112025-investor-bulletin-weo-2025.pdf
• Ministry of Petroleum and Natural Gas, Government of India, 'Strategic crude oil storage' · 5.33 MMT at Visakhapatnam (1.33), Mangaluru (1.5) and Padur (2.5), https://mopng.gov.in/en/pdc/investible-projects/oil-amp-gas-infrastructure/strategic-crude-oil-storage

3.3 Rare catastrophes and everyday risks need numbers, not instinct

Smil's Global Catastrophes and Trends asks which sudden events could change the world's course over fifty years, and how likely each is. He calls them fatal discontinuities. A Tunguska-sized asteroid impact, like the 1908 blast that flattened trees over about 2,150 square kilometres of Siberia, has roughly a 5% chance in any fifty-year period. Super-eruptions such as Toba, about 74,000 years ago, are far rarer but would disrupt climate and harvests worldwide. A major pandemic was the most probable catastrophe on his list; the 1918 influenza killed perhaps 20 to 50 million people, and COVID-19 later confirmed the warning. The right way to rank such events is probability multiplied by consequence, not how dramatic they feel.

For everyday risks Smil uses a simple common measure: deaths per person per hour of exposure. The background risk of simply being alive in a rich country, about 10 deaths per 1,000 people a year, works out at about one in a million per hour. Driving in the United States adds about half of that background risk while you are at the wheel. Flying adds only a tiny fraction. Terrorism on US soil between 1995 and 2017 averaged a risk thousands of times smaller than driving, yet it is among the most feared.

The same habit of measurement helps with energy choices. Counting deaths from accidents and air pollution per unit of electricity, coal and oil are by far the most dangerous sources, gas much less so, and nuclear, wind and solar the safest, each causing well under a tenth of a death per TWh. People nonetheless fear nuclear accidents far more than the steady toll of coal smoke, because risks that are imposed, unfamiliar and catastrophic feel worse than risks that are chosen, familiar and spread out.

Good risk thinking does not dismiss fear. It asks how large a risk really is, who bears it, and what reducing it would cost, and it compares options on the same scale.

• Smil, Global Catastrophes and Trends: The Next Fifty Years (2008) · via Smil Mastery Course, M16 'Fatal discontinuities'
• Smil, How the World Really Works: A Scientist's Guide to Our Past, Present and Future (2022) · via Smil Mastery Course, M16 'Understanding risks quantitatively'
• Smil, Numbers Don't Lie: 71 Stories to Help Us Understand the Modern World (2020) · via Smil Mastery Course, M16 'Understanding risks quantitatively'
• Ritchie, H., 'What are the safest and cleanest sources of energy?', Our World in Data (2020, updated 2022) · deaths per TWh from accidents and air pollution, based on Markandya and Wilkinson (2007) and Sovacool et al. (2016), https://ourworldindata.org/safest-sources-of-energy

3.4 The 2026 Hormuz shock tested the emergency system built after 1973

The Strait of Hormuz, the narrow channel between Iran and Oman, is the most important chokepoint in world energy. According to the IEA, about 20 million barrels a day of crude oil and oil products passed through it in 2025, roughly a quarter of all oil traded by sea, and Qatar's LNG leaves the Gulf the same way. Only a few pipelines, across Saudi Arabia to the Red Sea, from inland UAE to Fujairah and from Iraq to Türkiye, can carry oil around it.

A conflict in the region began on 28 February 2026, and within days oil exports through the strait fell to under a tenth of their usual level. In its April Oil Market Report the IEA called the March drop in world oil supply, about 10 million barrels a day in one month, the largest disruption in the history of the market. Bypass routes nearly doubled their exports, to about 7 million barrels a day, but covered only part of the gap. North Sea crude rose to around $130 a barrel, some $60 above its pre-war level; diesel and jet fuel in Asia rose faster still, and LPG and petrochemical feedstocks ran short.

On 11 March the 32 IEA members agreed unanimously to release 400 million barrels from emergency stocks. It was the largest collective action in the agency's history and only its sixth. The release bought time but could not replace the strait: 400 million barrels is about 20 days of the oil that normally flows through it (calculated). Most of the adjustment came from demand. By July the IEA expected world oil demand to fall in 2026 for the first time since 2020, as high prices and shortages forced cuts. Tanker traffic partly recovered in June under a ceasefire framework, then nearly stopped again when fighting resumed in July.

The episode confirmed the logic of 1974. Shared stocks and coordinated release work, but only as a bridge. Physical alternatives, from bypass pipelines to lower oil demand, decide how long a country can hold out.

• IEA, 'IEA members endorse largest-ever oil stock release amid Middle East market disruptions' (11 March 2026) · statement as published at https://ieu-monitoring.com/editorial/iea-members-endorse-largest-ever-oil-stock-release-amid-middle-east-market-disruptions/894579/; member volumes via Enerdata, https://www.enerdata.net/publications/daily-energy-news/iea-member-countries-agree-release-400-mbl-oil-stocks.html
• IEA, Oil Market Report, April 2026 (2026) · supply, Hormuz loadings, bypass exports, prices and demand, https://www.iea.org/reports/oil-market-report-april-2026
• IEA, Oil Market Report, July 2026 (2026), as reported by Oil & Gas Journal · 'IEA: Oil market recovery clouded as Hormuz ceasefire collapses', 10 July 2026, https://www.ogj.com/general-interest/economics-markets/news/55390096/iea-oil-market-recovery-clouded-as-hormuz-ceasefire-collapses
• Ministry of Petroleum and Natural Gas, Government of India, 'Strategic crude oil storage' · 5.33 MMT at Visakhapatnam (1.33), Mangaluru (1.5) and Padur (2.5), https://mopng.gov.in/en/pdc/investible-projects/oil-amp-gas-infrastructure/strategic-crude-oil-storage
• Smil, Energy at the Crossroads: Global Perspectives and Uncertainties (2003) · via Smil Mastery Course, M13 'Prices, real costs and energy in war'

See it in the table

Check your understanding

The Hiroshima bomb released about 63 TJ. Roughly how long would a 1 GW power station take to deliver the same amount of electrical energy?

What stockholding obligation did IEA members accept after the 1973 oil crisis?

In March 2026 IEA members agreed to release 400 million barrels of emergency oil after flows through the Strait of Hormuz, normally about 20 million barrels a day, collapsed. What does that comparison show?