The Oil Weapon Has Been Fired
- Richard Murff
- 7 days ago
- 3 min read
...it didn't work.
Energy markets have a long memory, a short temper, and a habit of turning political force into a bad joke. When the Arab world reached for the “oil weapon” in the 1970s, it brought the rich world to its knees. And promptly taught markets how never to be cornered again. Chokepoints were mapped, alternatives funded, and inefficiencies hunted down with almost religious fervor. The result, half a century on, is an energy system that is too liquid, too diversified, and too adaptive for coercion to work the way it once did. That is the uncomfortable joke Vladimir Putin has spent the last decade learning.
Russia’s attempt to weaponize gas and oil – first against Ukraine, then Europe – was meant to fracture alliances and force political concessions. Instead, it accelerated everything Putin feared most: diversification of supply and infrastructure build-out at improbable speed leading to the current global glut that has diluted Moscow’s leverage. LNG terminals sprang up, supply chains were rerouted, contracts rewritten, and Europe learned, expensively, how to live without Russian molecules. In short, the Kremlin’s foolishness hasn’t been leverage and scarcity, but a broad-based oversupply.
Part of this has to do with the practical effect of sanctions in a fractured world order: They don’t take supply out of global circulation, merely create a shadow market while the oil still flows under new flags, insurers and paperwork. For all the finger wagging, sanctions have historically been a lot of political theater. That has started to change. Drone strikes on obscure tankers, mysterious explosions aboard aging vessels, and an unmistakable shift in US maritime behavior all sent the same message: the shadow fleet is no longer operating in neutral space.
Yet, Washington’s experiment with high-tempo interdiction—boarding, seizing, and physically blocking sanctioned flows—has created noise, but not scarcity. Even when Russian naval escorts were present, they did not interfere. The signal isn’t containment of listed supplies, but asset control and reintegration to bring Venezuela “back into the fold.” Without a choice in the matter, energy markets seem content to let the policy play out. Insurers are recalculating as risk has become both mobile and kinetic, and traders are eye-balling margins, but global supply remains high.
Meanwhile, global growth in 2026 is weak by historical standards, and energy demand is soft. Demand is also flexible, substitutable, and increasingly decoupled from legacy inputs alone. Cheap crude may slow parts of the green transition in the US and Europe, but it also forces something healthier: realism. Timelines created by climate activists and their hectored politicians are stretching, capital is being allocated more efficiently, and renewables continue to scale – especially in Asia, and the Global South – for the next generation of energy infrastructure.
Layer into this the demand by AI data-centers and the story bends even further away from fossil chokepoints. Tech hyper-scalers are underwriting nuclear with power bets being placed that are long-dated, structural and post-carbon. The AI correction will come, but its long term direction will not change.
The point here is that what looks like chaos can be easily reframed as market adaptation. Expanding supply, sluggish demand, and geopolitical fragmentation point toward structurally lower energy prices – an outcome that would have seemed absurd to forecasters just a few years ago. Markets don’t fear uncertainty the way humans do. They reprice, reallocate, and move on.
The energy weapon has been fired again. And the joke is that once again, it has mostly succeeded in making itself obsolete.
Read the full 4717 Insight to go deeper into the mechanics, the market consequences, and what this means for prices, policy, and power in the year ahead.
