‘America is addicted to oil, which is often imported from the unstable parts of the world.’
President George W. Bush (from his 2006 ‘State of the Union’ address)
Our weekly selection of an episode of The Hypnotist often follows the theme in this commentary, but this week it's the other way around. ‘Addiction, and the straw that breaks the camel’s back’, is all about reaching for the point of threshold which becomes the catalyst for breaking a fixation, and it provides a helpful metaphor for considering the long-term impact of the war in the Middle East.
The world has been addicted to oil for over a hundred years and, while fossil fuels have powered so many advances in human progress, they are a fixation which has definitely now reached its sell-by date.
Climate change is of course the major long-term concern, but oil has also powered so many of the world's conflicts over the past sixty years. As we have commented in the past, differences in faith may be responsible for providing the spark in most cases, but oil has more often than not provided the fuel.
One can hardly describe the current Middle East conflict as a ‘straw’ and, as Adam Cox says, the proverb of ‘breaking the camel's back’ is not a pleasant one: but there is ironic convergence in the fact that the region which is so closely identified with camels may now have its economic back broken by the impact of the current conflict and the consequent disruption to global trade in oil, accelerating the end of our addiction.
Notwithstanding the release of massive oil reserves across the world last week, the oil price remains doggedly high. In the United Kingdom, the government is struggling to find ways to keep the energy element of the cost of living under control; but those who already use renewable energy to power their cars and heat their homes know that it's not a problem so far as they are concerned.
In the United States, the rising price of oil might encourage Donald Trump to repeat his ‘Drill, baby, drill’ mantra: but many Republican states are already enjoying the benefits of renewable energy generation. They know that continued reliance on oil makes no economic sense.
Meanwhile, China has taken huge steps to expand its solar energy farms in addition to producing so much of the technology that renewable energy requires. They may be the buyer for much of Russian and Middle Eastern oil production at present, but they are not planning for that long-term.
Notwithstanding the sanctions that have been applied to Russia and Iran over recent decades, it is these major oil producers which have caused both of the current wars: of course, it was the United States and Israel which struck the first blow in the case of the current war with Iran, but that country has relied on its oil wealth to maintain its campaign of hate and hostility since their 1979 revolution.
It's therefore possible to view the current conflicts as the birth pangs of a new world order, without fossil fuels driving its future. That probably sounds a rather optimistic outlook in relation to the billowing clouds pouring out of burning oil storage facilities across the Middle East which are filling our television screens at present, but it may be signalling a growing acceptance that we just can't go on like this.
Our opening quote makes it clear that President George W. Bush understood that much better in 2006 than Donald Trump does in 2026.
All sources of energy require substantial infrastructure investment to establish their production: a current example is the determined move towards nuclear fusion reported in last weekend’s Sunday Times, after decades of hearing that its commercial scale production was always ‘twenty-five years away’. But once that investment has been undertaken, the marginal cost of generating the electricity falls to much lower levels than that produced from fossil fuels; and the production is generally much safer.
Another example is the Xlinks project in Morocco, on which we reported in 2023. Significant progress continues to be made there notwithstanding the UK government’s decision in July 2025 not to grant a fixed price for electricity imported into the United Kingdom.
In the meantime, and if this conflict continues much longer, the world economy will suffer a considerable shockwave from higher oil prices, as reported in Motley Fool Money’s episode on stagflation. This will only strengthen the resolve of oil importers to break their addiction and, if the current conflict takes much longer to resolve, it will significantly reduce the accumulated wealth of the Gulf nations struggling to recover from all this destruction.
Withdrawal symptoms in recovering from addiction are invariably uncomfortable, but let’s hope that the world’s climate and a more stable geo-political situation can be the long-term beneficiaries.
Gavin Oldham OBE
Share Radio