2 Shocks, 1 Lesson: El Niño, the Strait of Hormuz and the New Math of Energy Security

As global climate experts move across this year’s Bonn climate summer meetings and London Climate Action Week, two very different kinds of pressure were converging on the global economy. One was geopolitical, months of disruption around the Strait of Hormuz, the waterway through which roughly a fifth of the world’s seaborne oil moves. The other was climatic, the World Meteorological Organization’s (WMO) confirmation that El Niño conditions are developing and are likely to shape weather worldwide throughout the rest of the year. Different in origin, the two shocks press on the same set of vulnerabilities: energy, food, water and cost.

As we write this article, WMO has confirmed that El Niño conditions are developing in the Pacific with a near‑certain probability of persisting throughout the year. This climatic shock is already reshaping weather patterns worldwide, driving droughts, floods and heatwaves that reverberate across agriculture, water systems, energy demand and supply chains. In an already strained economic moment, El Niño magnifies vulnerabilities in food and water security, reduces harvests, disrupts infrastructure and places unprecedented stress on power grids at the very moment demand peaks. These are not distant risks but immediate disruptions that shift commodity markets, insurance premiums and national budgets within a single season.

El Niño’s recurrence is a reminder that climate variability is not a background issue but a structural driver of energy insecurity. Its effects ripple through every layer of the economy: droughts cut hydroelectric output, heatwaves push electricity demand to unsustainable peaks and floods damage infrastructure that underpins supply chains. These shocks translate into higher costs for households and governments, with commodity markets and national budgets shifting within a single season. The lesson is clear: energy security cannot be separated from climate risk. A system that fails to anticipate climatic disruption is a system exposed to volatility it cannot control, and resilience must therefore be treated as a strategic imperative rather than a discretionary policy choice.

Set against this climatic disruption, the Strait of Hormuz provides a parallel illustration of dependency. When shipping through the strait was curtailed earlier this year, oil prices surged from around 70 to over 100 dollars a barrel, fuel shortages spread across Asia and inflationary pressures reached households and businesses far removed from the Gulf. Although a peace deal and reopening of the waterway now appear within reach, the reprieve remains fragile, with mines still in place and threat levels elevated. The lesson is stark: an economy reliant on a handful of chokepoints, whether climatic or geopolitical, is exposed to forces beyond its control.

There is a sharper irony beneath the disruption: A shock like this pushes the world toward more fossil fuel, not less. As the strait tightened, members of the International Energy Agency drew down strategic reserves, Washington temporarily eased sanctions on some Russian and Iranian oil to keep supply moving and tankers rerouted onto longer, more fuel-intensive voyages.  A conflict that disrupts the flow of oil almost inevitably slows the transition away from it. Yet with so much of the global economy still dependent on hydrocarbons moving through a handful of chokepoints, reducing that reliance during a crisis is nearly impossible. That vulnerability is not an argument for delay—it is a case for acceleration. Diversifying energy sources and supply routes is a climate, security and economic imperative. Every barrel a country does not need to import through a contested strait is a barrel of resilience.

What makes mid-2026 distinctive is the convergence. A geopolitical shock and a climatic one are landing on the same fault lines and, too often, the same communities. The countries and households least able to absorb a spike in fuel or food prices are the ones most exposed to both. For decision-makers, the central insight is that climate and security are not separate files to be managed by separate teams. They are dimensions of the same question about how resilient our systems are when more than one thing goes wrong at once.

For businesses, supply chains built for efficiency alone are brittle when a strait closes or a harvest fails. Resilience now means diversification and a serious accounting of climate exposure. For governments, it means early warning, adaptation, and a lower-carbon energy base that doubles as a hedge against geopolitical risk. This is why the work underway in Bonn matters beyond the negotiating rooms. These meetings set up the groundwork for COP31 and are a reminder that climate action is also an economic and security policy. The Paris Agreement was built on the premise that managing climate risk is a shared, long-term project. The events of this year suggest that the project is also an urgent, near-term one.

Policymakers and business leaders alike need to move beyond short‑term crisis management and embed climate resilience into the foundations of energy planning. Diversification of energy sources, investment in adaptive infrastructure and integration of climate exposure into economic and security strategies are no longer optional—they are the conditions for stability in a world of compounding shocks.

The question for leaders is whether they will treat these converging pressures as connected or continue to address them in isolation. The strait may reopen, and the El Niño may pass, but the underlying lesson will remain. In a world of compounding shocks, resilience is no longer optional—it is the strategy.