Published September 7 2026

Pricey oil is laying the groundwork for its own decline. Diesel has reached $5.90 per gallon in the US, its highest level, according to the AAA. With no end to the Iran war in sight, fuel prices will remain elevated, potentially shifting economic demand permanently. The International Energy Agency thinks disruptions across the oil world, from Iran to Russia, caused demand for crude to drop roughly 5 per cent in the second quarter.

Mostly, structural destruction of oil demand involves investment in alternative energy sources. A good proxy is China's exports of clean technology products, including solar cells, batteries, and electric vehicles. Solar exports in the first half of this year were up almost a quarter year on year, while EV exports more than doubled, per the IEA. In Africa, Chinese solar panels imported over the past 12 months cost $2.4bn, displacing diesel costing $10bn annually.

In the UK, the all-in cost of an electric vehicle now beats combustion engine models. Consumers of natural gas have also been affected by the Hormuz crisis. Countries relying on LNG imports, including South Korea, Thailand, and Pakistan, are increasingly turning to alternatives such as nuclear and renewables. This tailwind to renewables and electric vehicles is good news for global carbon emissions.