Six months ago, in my Forbes article “The U.S. Feels Higher Prices While The World Is Facing Fuel Shortages,”, I warned that the Iran war was creating risks that extended far beyond higher gasoline and diesel prices in the United States. India was struggling to secure liquefied petroleum gas, or LPG, fertilizer markets were tightening, Europe faced potential shortages of jet fuel and other refined products, and Asian economies were scrambling to replace energy supplies normally sourced from the Persian Gulf.
A few months later, in “The Great Energy Realignment” for Shale Magazine, I focused on the next phase of that story: how countries, refiners, traders, and energy companies were beginning to adapt. Trade flows were shifting, inventories were being drawn down, supply chains were being rerouted, and governments were being forced to reconsider how much redundancy and spare capacity they were willing to pay for in an increasingly uncertain world.
At the time, the biggest unknown was whether those adjustments would be enough. Six months after the original warnings, the picture is much clearer. Some of the worst fears did not materialize, but largely because countries found alternative suppliers, released emergency stocks, reduced consumption, and accepted higher transportation and energy costs to keep products moving.
The global energy system proved more adaptable than many feared, but that resilience came at a price. The more important question now is which shortages actually materialized, which were avoided, and how much of the system’s safety margin was consumed in the process.
India Found New LPG Supplies
India provided one of the clearest early examples of a physical shortage. The country traditionally sourced about 90% of its imported LPG from the Middle East, leaving it highly exposed when traffic through Hormuz collapsed. The government reduced LPG allocations to industry to protect household cooking-gas supplies, encouraged some users to switch fuels, and took steps to discourage hoarding as Middle Eastern LPG exports plunged.
India and other Asian buyers eventually found replacement supplies, particularly from the United States. U.S. LPG cargoes were redirected toward Asia, but replacing nearby Gulf production with supplies from the U.S. Gulf Coast meant longer voyages and higher transportation costs. By fall, the immediate shortage had eased as imports diversified and Middle Eastern supplies began to recover.
The episode demonstrated both the strength and the weakness of global energy trade. India did not simply run out of cooking gas, because alternative suppliers responded to higher prices. But securing those alternatives required longer supply chains, higher costs, government intervention, and substantial losses by state fuel retailers that continued selling subsidized LPG below market prices. The shortage eased, but the economic cost did not disappear.
Fertilizer Markets Adapted, but Not Completely
Fertilizer was another major concern because the Persian Gulf plays an outsized role in global agriculture. Gulf producers account for a large share of global urea and ammonia exports, while the region is also important to sulfur markets. Sulfur is a critical input for phosphate fertilizer production, so disruptions can spread well beyond the countries that actually produce it.
Those concerns materialized quickly. Urea prices surged after Hormuz traffic was disrupted, and millions of metric tons of Gulf fertilizer exports were temporarily removed from the market. That raised fears that fertilizer shortages could eventually reduce crop yields and push food prices higher.
The outcome has been less severe than initially feared. China increased urea exports, demand moderated after the Northern Hemisphere application season, and nitrogen fertilizer prices retreated from their wartime peaks. Phosphate markets have remained tighter because sulfur shortages continue to constrain production. Instead of one prolonged worldwide fertilizer shortage, the shock migrated through the supply chain as some bottlenecks eased and others persisted.
That distinction is important. Commodity shortages rarely remain static. High prices encourage conservation, attract new suppliers, and change trade flows, but those adjustments take time and usually impose costs somewhere else in the system.
Europe Avoided Shortages, but Not Higher Costs
Europe may provide the best example of a feared shortage that largely failed to materialize. In April, the loss of Middle Eastern jet fuel raised concerns that European airlines could face physical shortages during the busy summer travel season. Europe had become increasingly dependent on imported jet fuel as domestic refining capacity declined, leaving it vulnerable to the disruption of Gulf supplies.
Instead, European refiners increased jet fuel production while imports from the United States and West Africa helped replace missing Middle Eastern barrels. Inventories provided an additional cushion, and the summer passed without the severe shortage that some had feared.
But that does not mean Europe escaped the consequences. Jet fuel became considerably more expensive, forcing airlines to absorb higher costs and reconsider routes that no longer made economic sense. The market solved much of the physical shortage through higher prices, alternative supply routes, increased refinery output, and reduced demand.
Natural gas presents a similar story. Europe entered this conflict in a stronger position than it occupied during the 2022 Russian gas crisis because LNG import capacity had expanded and supplies had become more diversified. Nevertheless, higher global gas prices made it more expensive to refill storage. Germany entered November with unusually low storage levels for the beginning of winter, leaving Europe with less margin if the coming winter is particularly cold.
The World Used Up Part of Its Safety Margin
The most important development since April may not be any individual shortage, but what happened to the inventories and spare capacity that normally cushion supply disruptions. Global oil inventories have fallen substantially since the war began despite major releases from emergency reserves. Tankers are traveling farther, transportation costs have increased, and diesel inventories remain tight in several regions.
Those buffers are one reason the global system continued functioning despite the loss of a major energy chokepoint. Inventories existed precisely for this sort of emergency, and higher prices encouraged refiners, traders, producers, and consumers to adjust. Yet every barrel drawn from storage and every unit of spare capacity brought into service leaves less protection against the next disruption.
That is especially important because the Iran conflict did not occur in isolation. Refinery outages, hurricanes, a cold winter, another geopolitical crisis, or simply stronger-than-expected demand would now hit a system operating with less slack than it had earlier this year. Avoiding the worst-case scenarios in 2026 does not mean the underlying vulnerabilities have disappeared.
The Big Picture
When I wrote in April that much of the world was confronting shortages while Americans were primarily experiencing higher prices, the concern was that prolonged disruption through Hormuz could spread into transportation, agriculture, manufacturing, and household energy markets.
Six months later, the results are mixed but revealing. India experienced a genuine LPG shortage and found alternative supplies. Fertilizer prices surged, but nitrogen markets adapted while some phosphate constraints remain. Europe avoided a major jet fuel shortage, although airlines and passengers are paying higher fuel costs, and the continent enters winter with less comfortable natural gas inventories.
The global energy system bent much further than many people expected, but it did not break. That is encouraging, and it demonstrates just how effective international trade can be when markets are allowed to redirect supplies toward the places willing to pay for them.
The less comforting conclusion is that much of the flexibility that prevented a worse crisis came from inventories, spare capacity, emergency reserves, longer shipping routes, and demand destruction. Those measures bought the world time, but they also reduced the cushion available for the next shock.
The shortages we worried about in April did not unfold exactly as feared. Markets found substitutes and consumers adjusted, which is what commodity markets eventually do. But the substitutes came at a price, and six months later the global energy system has considerably less room for error.
This article was written by Robert Rapier, Senior Contributor to Forbes and Editor in Chief of SHALE Magazine. The original version of this article appeared on Forbes.com.
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