Energy — whether it be oil for cars or power for data centers — is suddenly the world's biggest constraint.

Why it matters: Energy is becoming the singular driver of both global stability and economic growth.

• Oil shocks from the Iran war are rippling through inflation and geopolitics.
• The AI boom is triggering a global race for electricity that grids aren't ready for.

The big picture: Energy is the thing we all need but don't notice until it's gone or expensive.

• We're confronting both unprecedented scarcity and demand for energy on a timeline that's considered remarkably sudden for the usually slow-moving energy sector.

Driving the news: Higher oil prices fueled by the Iran war are the main driver behind inflation, with the Consumer Price Index rising 3.8% in April, new data out this week shows.

• Higher energy prices accounted for the bulk of the increase between March and April, Axios' Courtenay Brown reported.
• Compared with the same period a year ago, energy costs are up 18%.

Meanwhile, trouble is also lurking in our power lines.

• The nation's grid watchdog took the unusual step last week of issuing its highest level warning that exploding power demand from AI data centers could strain electricity systems.

How it works: At first glance, the Iran war and the AI boom may not seem to have much overlap.

• Oil is primarily used in transportation, after all, so most of the impact hitting the economy is through gasoline and driving.
• Data centers, on the other hand, require electricity, which is not directly impacted by the war (at least in the United States, thanks in part to ample supplies of domestic natural gas).

Reality check: Whether in our vehicles or our light switches, energy serves the same purpose: it's the engine that makes things go — or the bottleneck that mucks everything up.

What they're saying: "Whether the issue is oil-supply disruption or power-sector strain, the lesson is the same," said Jason Bordoff, founding executive director of Columbia University's Center on Global Energy Policy.

• "When energy is unavailable, unreliable or unaffordable, economies slow, public anxiety rises, and policymakers have little room to focus on anything else."

Between the lines: Even though U.S. electricity isn't directly affected by the war, power prices are going up anyway — partly due to data centers.

• Voter discontent with high power prices could collide with parallel discontent with high prices at the pump.

Friction point: High energy prices could help fuel growing populist sentiment across the country that's also being fanned by worry about AI displacing jobs.

• "Rising energy prices and fewer jobs are making it harder for people to get by and could fuel a feeling that elected officials are not looking out for their interests," Bordoff said.

Yes, but: Data centers are driving a far larger share of power growth in the United States compared to the world as a whole, according to the International Energy Agency.

The bottom line: From battlefields to data centers, the next phase of the global economy will be shaped by who has energy — and who doesn't.

Utility-scale solar power generation is expected to soar past coal-fired power in Texas this year — and then the gap will keep widening in 2027, per the Energy Information Administration.

Why it matters: The heart of the nation's oil-and-gas industry is also renewables country thanks to abundant resources, developer-friendly rules, rising demand and more.

The big picture: The chart above shows the trend in ERCOT, the grid region that covers almost all of Texas.

Stunning stat: EIA expects 40% of all U.S. solar capacity additions this year to be in Texas.

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🛢️ The White House said that Chinese President Xi Jinping, in his meeting with President Trump, "expressed interest" in buying more U.S. oil to reduce reliance on the Strait of Hormuz.

• Why it matters: China is the world's largest oil importer, but its purchases of U.S. crude have cratered amid trade frictions
• Yes, but: "China's official readout of the meeting didn't include energy in the list of topics the two presidents discussed, although it did say they talked about the Middle East," Bloomberg reports.

⚖️ Interior Secretary Doug Burgum said his agency would appeal a federal judge's injunction against policies that have effectively thwarted wind and solar project permitting.

• State of play: Burgum told the House Natural Resources Committee yesterday that "we reject the whole premise" of a single district court judge dictating Interior's permitting process.
• Catch up quick: Last month, a Massachusetts judge sided — for now — with renewables advocates and trade groups challenging Interior policies they allege are "unlawfully picking winners and losers among energy sources."

🚗 Via Reuters, "Honda Motor posted its ​first annual loss in nearly 70 years as a listed company on Thursday, hit by more than $9 billion in costs ‌to restructure its electric-vehicle business, and the firm scrapped its long-term EV sales target."

A new report has lots of fresh data showing China's outsized investment in renewables, battery and electric vehicle supply chains compared to the U.S.

Why it matters: It lands as President Trump and Chinese President Xi Jinping are meeting in Beijing.

• The summit represents a clash of energy philosophies.
• Trump is leaning into fossil fuel production and exports.
• China is leaning into renewable power, battery and EV tech.

Driving the news: China accounted for $510 billion of the $1.1 trillion in manufacturing investments that Atlas Public Policy — a data and policy research firm — tracked from 2019-2025.

• The U.S. was a distant second with $236B, and saw a net-negative figure in 2025 amid major policy changes that followed sharp growth from 2021-2024.
• A whopping $515B of the global $1.1T total went to investment in battery manufacturing, with 55% from Chinese companies.

Reality check: China, to be sure, is a massive fossil fuel user and producer.

• It's the world's largest coal producer and consumer, and the second-largest user of oil and natural gas.
• But it's also the dominant player in the export markets for low-carbon energy and vehicle tech.

The bottom line: "China has built enormous manufacturing capacity domestically, and increasingly, grown production abroad to skirt trade restrictions and assert itself as the global leader in the future of energy," the report states.

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Shares of Fervo Energy soared 35% on the buzzy geothermal startup's first day of trading yesterday.

Why it matters: The company, which raised $1.9 billion in its IPO, is benefiting from several tailwinds.

• They include rising power demand, the AI boom, use of known shale drilling methods, and geothermal avoiding the Trump administration's ire toward other renewables.