Energy Reliability Is Becoming More Important Than Energy Politics | OilPrice.com
Robert Rapier
Robert Rapier is a chemical engineer in the energy industry. He has 25 years of international engineering experience in the chemical, oil and gas, and…
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By Robert Rapier – Nov 06, 2026, 1:00 PM CST
- The Iran war has exposed vulnerabilities in global oil and LNG supply chains, accelerating investment in alternative transportation routes and energy infrastructure.
- Governments are increasingly prioritizing nuclear power, natural gas, renewables, storage and stronger electrical grids to improve energy reliability.
- Energy security and resilience are becoming central to the energy transition as countries balance affordability, reliability and emissions goals.
For much of the past decade, energy debates often pitted fossil fuels against clean energy. Governments announced dates for phasing out technologies, investors tried to anticipate which industries would lose favor, and energy policy increasingly became entangled with political identity.
The war with Iran has exposed the limitations of approaching energy policy that way. When supplies are disrupted and prices rise sharply, governments become much less interested in ideological consistency and much more interested in keeping fuel available, electricity reliable, and costs manageable.
That shift is now visible across oil, natural gas, nuclear power, renewable energy, transmission, and storage. The lesson emerging from the latest energy crisis is not that the energy transition is over or that fossil fuels have somehow “won.” Rather, the crisis has reinforced something energy planners have always understood. Reliability and security have to come first. An energy transition that cannot deliver energy when and where it is needed will eventually collide with economic and political reality.
Chokepoints Changed the Conversation
The Strait of Hormuz provided the most dramatic example. Before the war, roughly one-fifth of global oil and liquefied natural gas trade moved through the narrow waterway. That concentration gave Iran enormous potential leverage over global energy markets and exposed how quickly abundant supplies can become effectively unavailable when a critical transportation route is threatened. Recent investment plans across the Persian Gulf reflect an effort to reduce that vulnerability and create more ways to move energy around the strait.
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Saudi Arabia and the United Arab Emirates are expanding pipelines and other infrastructure that can move more oil to ports outside the Persian Gulf. HSBC CEO Georges Elhedery recently went so far as to suggest that investment in alternative routes could make Hormuz largely redundant for oil within five years. That is probably too strong, especially because LNG remains much more dependent on the strait, but the direction is clear. Gulf producers are putting a much higher value on having multiple ways to reach customers.
Saudi Arabia is also looking beyond pipelines. On October 26, Saudi Arabia and Singapore announced plans to establish a crude oil storage arrangement at Singapore’s Jurong Rock Caverns, with operations expected to begin in the second half of 2027. The stated purpose is to improve Singapore’s energy security while also making the Saudi supply chain in Southeast Asia more resilient during disruptions. In other words, Saudi Arabia is not producing more oil because of the war. It is spending money to make the oil it already produces more reliably deliverable.
That distinction is becoming increasingly important. For decades, energy security was often discussed primarily in terms of reserves and production capacity. Those remain critical, but this crisis has shown that the transportation system connecting production to consumers can be every bit as important. A barrel that cannot reach the refinery has little value to the consumer who needs it.
LNG Shows Why Geography Matters
Liquefied natural gas offers an even clearer illustration because Qatar has fewer alternatives. Qatar remains one of the world’s dominant LNG suppliers, but virtually all of that LNG must leave through the Strait of Hormuz. Unlike crude oil, LNG cannot simply be redirected through an existing oil pipeline to another coast. Creating an alternative would require moving large volumes of natural gas elsewhere and building another extremely expensive liquefaction and export system.
That vulnerability has helped produce one of the more remarkable developments of the year. QatarEnergy has begun securing long-term U.S. LNG supplies, including a 20-year agreement announced this week for up to 3 million metric tons annually from Woodside Energy’s Louisiana LNG project. Deliveries are expected to begin in 2030, eventually making QatarEnergy the largest purchaser of LNG from that project. One of the world’s largest LNG producers is therefore buying large volumes of U.S. LNG partly because U.S. geography provides supply diversification that Qatar itself cannot easily replicate.
The United States benefits from a very different geographic position. Gulf Coast LNG terminals can supply Atlantic Basin customers without passing through Hormuz, while North American gas production is supported by a vast network of pipelines, storage facilities, and producing basins. That does not make U.S. LNG immune from disruption, but it gives buyers another large supply source outside the Persian Gulf. The war has reinforced that the cheapest molecule is not necessarily the most valuable one if its route to market can be interrupted.
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Canada is making a similar calculation. LNG Canada approved Phase 2 in September, which will double capacity at the Kitimat, British Columbia facility from 14 million to 28 million metric tons annually. The project gives Asian customers another large LNG source directly on the Pacific Coast, while avoiding both Hormuz and the longer Gulf Coast shipping routes to Asia. Shell explicitly cited diversity of energy supplies and energy security when announcing the decision.
Europe Is Rediscovering Energy Security
Europe has already learned this lesson once. Following Russia’s invasion of Ukraine, the continent moved rapidly to reduce its dependence on Russian pipeline gas and replace much of it with LNG from the United States and other suppliers. That strategy worked well enough to prevent the severe shortages many feared, but it also made Europe more dependent on global LNG markets just as another geopolitical crisis began disrupting Middle Eastern supplies.
The result has been another sharp increase in Europ
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