The Energy Crisis

The recent conflict between the United States, Israel, and Iran has triggered the largest supply shock in oil market history, with an 8-million-barrel-per-day reduction in global supply. Unlike the 1973 embargo, this crisis highlights the vulnerability of natural maritime choke points like the Strait of Hormuz, where Iran exerts leverage despite lacking the legal infrastructure associated with engineered canals like Suez. While renewable energy offers a path toward right-sizing national energy capacity, current reliance on Chinese-dominated supply chains complicates efforts toward energy autarky. Concurrently, Viktor Orbán’s long-standing tenure in Hungary faces a critical re-election test amid economic stagnation and inflation. His governance model, characterized by selective engagement with foreign capital and aggressive nationalist rhetoric, increasingly clashes with European Union funding conditions, leaving the country at a precarious intersection of industrial policy and geopolitical isolation.