No matter how long the current upheaval lasts, it could spark or accelerate lasting changes to global energy flows and policies.

Why it matters: Analysts are starting to look beyond the immediate market shock — which is indeed quite shocking (see item 2).

Here's a few big effects to track going forward...

🇨🇳 China's risks and rewards. In the near term, China faces plenty of jeopardy as a major buyer of Mideast oil and Qatari LNG. Longer term? Different story.

• "Crises often reorder energy geopolitics in unexpected ways. This one may ultimately strengthen, rather than weaken, China's strategic position," Columbia's Jason Bordoff writes in Foreign Policy.

State of play: His piece explores several reasons. One of them: being the top dog in clean electricity supply chains looks even better if today's crisis hastens global shifts from risky oil and gas commodities.

• That's hardly the only geopolitical upside for China that Bordoff and other analysts are exploring.
• Atlantic Council scholars, in a wide-ranging post, note gas is a rather small share of China's overall energy pie, and it has pipeline import options, and already relies less on LNG than several neighbors and rivals.
• So... LNG outages in Qatar stand to benefit U.S. producers, fueling claims that Washington is getting a windfall.

"Beijing may therefore judge that another LNG-tinged crisis would impose little economic cost on it while potentially further antagonizing Washington's already-fraught ties with its allies," it states.

🗄️ The case for stocking up. China has built up very large onshore crude oil stockpiles in recent years, reaching 1.2 billion to 1.4 billion barrels by varying estimates.

• Other countries could begin bolstering their strategic inventories after the crisis that has shown the fragility of global flows.
• "Irrespective of how this plays out, we are going to move to 'just-in-case' inventories from what had been 'just-in-time,'" Veriten partner Arjun Murti said on the firm's latest podcast over the weekend.

🎨 The case for diversifying. On Friday, we explored how a crisis laying bare risks to ocean-going commodities may drive nations' faster moves toward homegrown electrons — especially the renewable sort.

• But any moves toward a wider energy menu — and higher natural gas costs from the conflict — could also bolster the case for nuclear, coal and countries' development of their domestic oil and gas.
• Murti notes the lesson for Europe is "especially stark" after it was overexposed to Russian gas, then pivoted to LNG, and now that market is hit by the loss of Qatar's output.
• "This idea that you want to be diversified — and not just in any one 'solution' — is a real lesson I think everyone needs to remember," he said.

The bottom line: Yes, it's easy to overstate how much a crisis will change things.

• During COVID, there was a minority-but-not-totally-crazy view that oil consumption might never return to pre-pandemic highs. It did, and it's still growing.
• But don't bet against the aftershocks of today's upheaval being profound.

Oil remains north of $100 per barrel despite retreating somewhat on new of G7 countries weighing releases from emergency stockpiles.

Why it matters: The spreading conflict is "by far the largest oil disruption in history," Rapidan Energy Group said in a note last night.

• "Gulf War III has disrupted ~20% of global oil supply for nine days and counting — more than double the previous record set during the Suez Crisis of 1956-57, which disrupted just under 10%," the firm said.

Catch up quick: The global benchmark Brent crude spiked to nearly $120 per barrel last night, up roughly 25% from Friday's already-elevated close.

• But reports that G7 finance ministers will today discuss joint release of emergency reserves cooled things off.

Threat level: The energy shock is already rippling through the economy, with U.S. average regular gasoline prices averaging $3.48 this morning — up nearly a half-dollar in the last week, per AAA.

• Diesel prices have also soared, which puts upward pressure on the cost of all kinds of goods as business transport costs rise.
• Axios' Neil Irwin has a lucid look at rising threats to the global economy.

Yes, but: Despite Trump administration ideas to enable more ships to move and other efforts, analysts say a hot war in the region is simply incompatible with a chill market.

• Transit through the Strait of Hormuz remains too risky for almost all ships; some Gulf oil producers are cutting back as storage space gets tight; and various energy facilities are facing attempted drone attacks.
• "We believe that duration will be the determining factor of the ultimate price trajectory for energy," RBC Capital Markets said in a note.

The bottom line: "Absent a near-term resumption of Strait of Hormuz flows, the global oil market will need to balance via demand destruction caused by sharply rising oil prices," Rapidan writes.

🗳️ Senate Minority Leader Chuck Schumer (D-N.Y.) yesterday called on President Trump to release oil from the national stockpile to counter soaring gasoline prices. Go deeper.

• Multiple Democrats — including several potential White House candidates — are bashing Treasury's limited Russian sanctions waiver aimed at allowing India to bring in more barrels.

🗣️ Trump argued that price increases are worth it. "Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace," he said via Truth Social.

⚔️ Israel's strikes on 30 Iranian fuel depots Saturday went far beyond what the U.S. expected when Israel notified it in advance, sparking the first significant disagreement between the allies since the war began eight days ago. Go deeper.

🪖 One thing to watch is how the domestic economic fallout might spill into the military strategy.

• "Trump retains [the] option of unilaterally declaring 'victory' at any point, pivoting to lower tensions and re-opening shipping through the [Strait] of Hormuz," TD Cowen analysts said in a note.

⚛️ Via Reuters, "South Korea's Industry Minister Kim ​Jung-kwan said on Monday that Seoul is ‌in talks to invest in a nuclear power project in the United States as part of Seoul's pledge ​to invest a total of $350 billion in ​U.S. projects."

⚡ "Plug Power Inc. is planning to offer hydrogen electricity in a potential special auction by the biggest US power grid in the scramble to feed the artificial intelligence boom," Bloomberg reports.

👀 Via E&E News, "White House officials are increasingly engaged in permitting talks between Democrats and Republicans on Capitol Hill at a time when energy prices are becoming centerpiece of the brewing affordability wars."

✅ U.S. regulators approved a construction permit for Bill Gates-backed TerraPower to build a nuclear power plant in Kemmerer, Wyoming. Go deeper

🔌 Exclusive: Photoncycle raised €15 million to develop hydrogen systems that can store a home's excess solar energy for months. Go deeper

🔋 Battery startup Lyten says it's moving quickly to restart production of Northvolt's lithium-ion battery factory. Go deeper

⚡️ A consortium led by BlackRock's Global Infrastructure Partners and EQT Partners agreed to acquire a majority stake in utility and power company AES for $33.4 billion. Go deeper

🔋 Exclusive: Battery materials startup Elementium has closed $11 million in seed financing. Go deeper

That's Earth's estimated warming since 2015, per new peer-reviewed analysis in Geophysical Research Letters.

😬 Why it matters: It marks a significant acceleration.

• "This recent rate is higher than in any previous decade since the beginning of instrumental records in 1880," a summary states.

State of play: The paper attempts to gauge warming levels without the influence of El Niño, volcanism, and solar variation.

• But some scientists, while agreeing that warming is accelerating, quibbled with some specifics, Nature reports.