Strait of Hormuz risk highlights New Zealand’s energy security exposure - Fran O’Sullivan

Résumé détaillé

The old ESG equation — environmental, social and governance — is being displaced by a harder set of priorities: energy, security and geostrategy. Donald Trump’s willingness to…

Donald Trump’s willingness to upend alliances, destabilise energy markets and weaponise economic power is forcing countries to rethink energy security. Photo / AFP

The old ESG equation — environmental, social and governance — is being displaced by a harder set of priorities: energy, security and geostrategy.

Donald Trump’s willingness to upend alliances, destabilise energy markets and weaponise economic power is forcing countries to rethink energy security. For New Zealand, the warning lights are flashing.

America may be swimming in oil and gas, but the rest of the world is discovering that an energy superpower can also be a source of extraordinary instability.

Trump’s open-ended confrontation with Iran, Russia’s continuing war in Ukraine and his increasingly transactional approach to America’s traditional allies have shattered the comfortable assumption that Washington will act as guarantor of global energy security. The Strait of Hormuz, through which roughly a fifth of the world’s oil trade passes, is a reminder of how vulnerable energy markets remain to geopolitical shocks.

The United States’ energy independence gives Trump greater freedom to pursue an aggressive foreign policy. It does not insulate American consumers, businesses or allies from the consequences.

Europe has learnt the cost of energy dependence. Russia’s invasion of Ukraine exposed the folly of relying on a hostile power for critical gas supplies. China, meanwhile, recognised the strategic importance of energy security earlier than most, backing its industrial transformation with massive investment in renewables, batteries, electric vehicles and nuclear power.

Even Trump’s America is discovering that pumping more oil and gas does not solve every energy problem.

The backlash against data centres during the US midterm elections is a case in point. The AI boom is driving unprecedented electricity demand as technology companies race to secure power for energy-hungry facilities.

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