Front Burner - Is the world locked in an energy war?

Episode Date: October 15, 2026

Today we are going to spend some time trying to understand the expanding front lines of two ongoing wars, where the battlefield isn't just marked by trenches, snipers and fortifications, but also by energy infrastructure, supplies and distribution.Think of them as energy wars, currently being fought in Ukraine, and in countries around the Persian Gulf.We're joined by Ravi Agrawal, Editor in Chief at Foreign Policy and host of their podcast, FP Live. Together, we’re looking at energy and how it can be used as a tool or weapon of war and why after decades without them, energy wars are back.For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts 

I almost bailed on brunch this morning. I opened my banking app before leaving, saw a few unexpected expenses, and just felt that instant wave of stress. I hear you. Money stress is real and it's exhausting when it feels never ending. Yeah. It feels like every time I get a handle on things,

three unexpected bills hit at once. I'm just trying to get to a point where managing money doesn't feel so overwhelming. Honestly, just being open about it. it helps take away some of that pressure. You're definitely not alone in feeling that way. Thanks. It really does help to just talk it through and hear how other people are handling it. Money is a big part of life, but you don't have to navigate the conversation alone. If you're looking for real stories, an open dialogue, check out Count Us In.

A web series where host Michelle Spina sits down with members of Gen Z to share real perspectives and experiences on money, life, and what comes next. paid content with Desjardé. Now streaming on CBC Gem. This is a CBC podcast. Hey, everybody. I'm Jamie Poisson. Today, I want to spend some time trying to understand the expanding front lines of two ongoing wars. These aren't front lines of trenches, snipers, and fortifications, but of energy infrastructure, diesel supplies. Something that threatens to bring the global economy to its knees and appears to be a huge factor in the upcoming U.S. midterm election.

energy wars, currently being fought in Ukraine and in countries around the Persian Gulf. To be more specific, I'd like to try and connect the dots between a deal that U.S. President Donald Trump signed with Russia to buy that country's diesel, with attacks on Saudi Arabia's oil facilities, and an increasing number of strikes on shipping vessels passing through the Strait of Hormuz. Today, I'm joined by Ravi Agrawal, editor-in-chief at Foreign Policy and host of their podcast, FP Live, and together we're going to look at energy. and how it can be used as a tool or weapon of war

and why after several decades free of energy wars, we are now seeing them again. Ravi, hey, it's great to have you on the show. Thank you so much for making the time. Oh, great to be on. So the idea of using energy or fuel as a weapon, it isn't new. One of the most impactful examples is the Arab oil embargo of 1973

when OPEC countries in the region restricted oil experts to countries supporting Israel. But in the decades after, we haven't really seen that kind of action. And just why do you think that is? Well, I think partly because the world off to 1973, it was basically designed to avoid the kind of scenario where a country or a collection of countries could weaponize energy.

And so by that, I mean, you know, the oil markets are globally traded. So if it goes up in one place, it goes up in another place. Supply chains have been designed in such a way to really ensure that demand keeps up with supply and supply keeps up with demand. And there's a general, there's been a general sense among countries that you don't want to attack the very foundations of the global economy because, you know, that essentially hurts everyone. And it's the nuclear option. So why go down that route?

Now, all of those things make sense on paper. But when you enter a world that is at war and we are increasingly at war on multiple continents, many arenas, then all of those assumptions that underpinned a flourishing global economy are challenged. Let's zoom in on 2022 when the war in Ukraine begins and triggers one of the worst fuel shocks in recent history. The price of oil, wheat, fertilizer, aluminum, and natural gas all spiked today. Investors are concerned Russia's production and exports of those commodities could be disrupted. There's also concern Russia could cut off its expectations. on purpose in retaliation for sanctions. Gasoline peaks at around two bucks, a leader in Canada.

In June of that year, four bucks a gallon in the U.S. In Europe, natural gas prices hit all-time highs, which meant some countries had to put in special energy saving measures just to keep their homes lit and warm in the wintertime. And just can you remind us, you know, why all of that happened and how Russia weaponized its fuel supply at the time? So for decades, Europe had become more dependent on Russia for not only its crude oil, which is usually transported by ships, but also its natural gas, which is transported primarily through pipelines. And the building of pipelines across Eastern Europe and into places like Germany is something that takes many years to pull off. And once you do it, you build supply chains around it, you build dependencies, and it's very hard to unwind.

knowing all of these things, Russia's Putin, when he invaded Ukraine in February of 2022, he knew fully well that were things to continue if this was a long, prolonged war, which it ended up being, and of course Putin did not want that to be the case, but as Ukraine fought back and as Europe helped Ukraine to fight back, Russia immediately said, well, then if you're going to fight back, then you're not going to have all of this energy that we usually provide you with, then not only that, but Europe didn't want to be able to use Russian energy because in doing so it would be giving Putin a lot of money,

which he could then plow back into what was essentially becoming a war machine. Germany is not against an oil ban on Russia. Of course, it is a heavy load to bear, but we are ready to do that. Council should now be able to finalize a ban on almost 90% of all Russian oil imports by the end of the year. So that was the start in a sense in 2022 of a country, which was a massive energy exporter, using an act of war to then weaponize its energy production. And then on the flip side, countries that were affected by that war began to say, we don't want your energy anyway. We're going to find other sources. What immediately happens is that supply is constricted.

demand is roughly the same, prices start soaring. Tell me more about how Europe responded to that crisis and other countries around the world, and were they ultimately able to adapt? Yeah, so I mentioned the difference between oil and natural gas, and that is salient here because the global price of oil, as that price rose, European countries, of course, were buying market price, which they actually have more ability to do because they tend to be richer economies, poorer countries in Africa and Asia that are more energy dependent,

we're struggling with those higher prices. Natural gas is a little bit different because it is priced separately through regional arrangements. So, for example, the natural gas that Europe was receiving from Russia in particular, with that source of gas, once it was challenged, Europe had to turn to other sources that were very expensive. And so over the course of, you know, a year or two, it managed to reroute its natural gas supplies. You know, Qatar, which is one of the world's biggest producers, was able to step in as a swing producer. The United States is actually the biggest exporter of natural gas and was also able to, over time, step in. But there was an initial shock to European economy.

They had a very difficult winter in 2022, and it took them some time to reorient their supply chains, which of course meant, by the way, that the energy supplies, it was picking up from other parts of the world, increased some pressures on other economies in the Middle East, in Asia, in Africa. And so globally, there was a real impact of Russia's war in Ukraine. Last week, Trump announced on Truth Social that Russia has now agreed to export 300,000 tons of diesel oil to the U.S. immediately with a lot more to come over the next couple of months and that the U.S. would be lifting sanctions on Russian fuel exports. That is a big deal. That is massive amounts of oil coming into our country. And I want to thank President Putin, to be honest with you. We have massive amounts of oil being coming into our country. And it's diesel, which is what we want.

So thank you. He then announced the so-called energy ceasefire, where he said that Russia and Ukraine had both agreed to stop attacking each other's energy infrastructure. Because Russia and Ukraine agreed to a ceasefire. But both sides say they have not agreed to that. Well, they agreed. You know why? Because I said you agree.

That's why. They agreed because I said they agreed. And it brought on backlash from both Republicans and Democrats. I just, how are you interpreting this sudden deal? I think it has received criticism quite rightly from a variety of angles. So you mentioned a bipartisan group of U.S. lawmakers. They have basically said that the deal is a gift to Russia. It's a betrayal of America's friends.

It means America and other countries are going to start giving Russia money for its energy. and it will use that money to continue its war in Ukraine. Ukrainian President Zelenskyy calls the agreement, quote, weak. It gives Putin money and he spends money only on this war. Kill us. Kill our children. Europeans are very unhappy about the fact that Trump is pressuring Ukraine to stop hitting Russian refineries, which is part of the reason why global supplies are down. Energy experts are very upset as well because they point out that the Russian

supply will hardly change prices anyway. So why even do it? I mean, it's basically about 100,000 barrels a day. So this is barely going to change diesel prices, oil prices, certainly not in any significant way before the midterms, which is what Trump really cares about. And then finally, I have to point out that there are many countries like India, which have long faced a lot of US pressure to stop buying Russian oil. And they're looking at this reversal. from the Trump administration, and they're saying, wow, this is serious policy whiplash, and it turns out that U.S. values last only as long as it's economically viable. So the truth is, this is a very confusing deal. It is counterproductive in that it might

prolong Russia's war in Ukraine, doesn't really change the energy dynamic. And most of all, if Trump really wanted to move the needle on energy prices, there was a different arena he could have looked at, and that's Iran. Right. And I want to get to Iran with you in a minute because, of course, I don't think he would be trying to do anything with Russia if it weren't for what's happening in the Middle East. Talk to me more, though, about why you think he did try to do whatever it is he's doing with Russia. It is strange. I wish I was able to explain President Trump's actions. It befuddles me, to be frank. I think Trump is desperate to some. I think Trump is desperate to some. be seen to be bringing energy prices down for Americans. And by energy prices, I mean, first of all, the price of gasoline at the pump is around about $4 a gallon, which is broadly 30, 40 percent higher than it was before the war.

But then more importantly, perhaps the price of diesel is about $6.50 a gallon. And diesel, you know, you and I might not be buying diesel, but it affects us because every business, trucks, transporting stuff from A to B that then ends up becoming more expensive and then goods end up affecting inflation overall and prices for us. So this is deeply important to the U.S. consumer. And I think Trump wants to be seen to be doing something. But as I said, the economics are flawed. The very little amount of Russian oil that will come online, when it comes online isn't really going to change the supply constraint that we currently have. And there's unanimity among energy experts on this point. So Trump would only need to ask them about this,

and he would have gotten his answer. I'm interested since we're talking about this deal, I would just be interested to get your take on the position it puts countries like Canada and other allies of Ukraine and who have imposed heavy sanctions on Russia. In response to Trump's announcement, our Prime Minister, Canadian Prime Minister Mark Kearney, his office put out a statement following a call that he had with Zelensky. And on the diesel deal, it said that the Prime Minister was clear. This agreement is in direct opposition to the efforts of Ukraine, Canada, and our allies to create peace and stability in Europe. It will provide additional revenue for Russia and help finance its illegal, unjustifiable war against Ukraine. But like a half hour later, the Prime Minister's office put out.

another statement this time about a call that Carney had with Trump saying that he thanked the president for his leadership towards securing this energy ceasefire that he announced between Ukraine and Russia. And Carney has garnered criticism here for essentially supporting an energy ceasefire that doesn't either seem to exist or is being ignored, certainly by Russia. And how are you thinking about the way that Carney is threading this needle? Look, it's difficult because on the one hand, I think Prime Minister Carney was correct in being very critical of the policy whiplash regarding Russia. The United States and its allies have not only on their own tried to stop buying Russian oil and sanction Russia and prevent its coffers from being filled

up and being used to fuel its war machine, but these countries, America and its allies, have also pressured the rest of the world to do the same thing. And many of those countries found it very, very inconvenient to do so because, you know, they'd set up refineries that were designed to receive Russian-grade crude, for example. So it takes a long time to reorient your supply chains, to build your refineries in a way that suits a particular delivery system, et cetera. To reverse that all of a sudden, kind of on a whim, in a way that may not really affect energy prices, as I've been saying, is genuinely befuddling. So I think Prime Minister Carney was right in saying that. However, in his appearing to be thankful or hopeful even of the proposed

deal, the energy ceasefire, as you put it, you know, on the one hand, some moves to stop these two countries from attacking each other are laudable. I just find it hard to believe until I see it. Russia has promised many times to stop attacking or to curb in certain ways, but it is yet to show that it really wants to end this war in any meaningful way. Much of what it's been doing in the last few months is pummeling Ukrainian cities, pummeling Ukrainian energy infrastructure. Soon after the ceasefire announcement, Russia attacked a Ukrainian power plant, the war getting bloodier. Just hours after Donald Trump proclaimed an energy ceasefire. Russia obliterated an area near a Harcathive grocery store. A teenager was among three people killed. Russian ballistic missiles have hit the Ukrainian capital Keev, killing at least three people and injuring more than 20 others.

A residential building and a thermal power plant were targeted. More than half a million people in Ukraine's capital left without electricity. And it knows that one of Ukraine's weakest points is this winter. If it hits its energy infrastructure hard, then the Ukrainians will suffer in the cold and dark. And there's every chance that Russia may promise one thing and then do another thing at the last, using the time in between to build up its own defenses

and to expand its production of drones. So there's a lot of mistrust and they're very good reasons for that lack of trust. And so even though Carney is saying what he's saying about this energy ceasefire, there are many people who are supporters of Ukraine who find it very hard to believe. I've been staring at my offer letter for three days.

The salary is exciting, but trying to understand terms like group matching and flexible spending, it feels like reading another language. Congrats on the job. That's huge. But yeah, entering a new workplace comes with a big learning curve. I just want to make sure I'm setting.

myself up right from day one. It feels like there's so much to figure out about how all of this works. We all feel a bit out of our depth when starting out. When I made my last jump, I was totally trying to make sense of my new paycheck and my real life expenses. Glad it's not just me. It helps to know that everyone goes through this phase. For sure. Honestly, just bringing it up in the first place is half the battle. Landing the job is just the start of the journey. Want to hear how others are navigating the early careers? Check out Count Us In. A web series where host Michelle Spina sits down with members of Gen Z to share real perspectives and experiences on money, life, and what comes next. Paid content with Desjardin. Now streaming on CBC Gem. Right now, Canadians are choosing to support each other like we never have

before. So shouldn't our website domains show that same strong support? Choosing a dotCA domain does that and much, much more, because proceeds from dotCA domain sales help support local problems. projects that improve digital access, online safety, and build stronger Canadian communities. Your website may be where your dot-CA starts, but its impact goes much further. See the difference a Canadian online choice makes. Visit choose.ca today. Okay, let's talk about the Middle East now, because as you have said, even though Trump has blamed Ukraine's attacks on Russia for driving up diesel prices, there's no shortage of analysts that say that the disruptions to the strait of Hormoos from this war have had a much, much.

larger impact. And to what extends is what's happening with the global oil and diesel supply because of Iran, specifically, would you say? Oh, a very big extent. I mean, oil prices globally are up by about a third or more since the Iran war. So there is a direct causality. There's always noise in this kind of data, but I think if you look at when the war began and how prices have been consistently elevated since then, it's actually not that difficult to just point to this one event, the war, and then Iran's ability to a shut down the Strait of Hormuz through which, under normal circumstances, a fifth of all global crude and a fifth of all natural gas used to pass, and then B, Iran's ability to disrupt shipping, to hit ships that are trying to pass through, and to attack energy infrastructure in the region.

So in part because it's hit, for example, a Qatari refinery, a major gas plant, Saudi refineries, production is down across the region. So all of those factors have really constrained supply this year. The war is also intensifying on the Saudi front as the Houthis continued to pummel Riyadh with ballistic missiles, hitting the airport, among other targets recently. a number of foreign leaders in oil execs were expected to attend the World Petroleum Congress there this week, I believe, but they canceled their flights and joined remotely instead. And I just, what is the effect of this flare up and fighting between the Houthis and Saudi-back forces on the energy market? It's significant because the Houthis have directly hit airports and oil facilities in Saudi Arabia. this comes after, you know, there have been attacks on Saudi Aramco's headquarters. All of this makes, you know, one of the world's biggest oil producers,

less confident in its ability to do what it does, to build more infrastructure, to export its stuff. You know, and it's no secret, of course, that the Houthis are quite aligned with the Iranian regime. And so in some senses, while the Houthi, conflict has been simmering for many years. This recent spade of attacks is, you know, almost certainly linked back to Iran's hope that it can raise the costs of the current status quo to bring the United States back to the table for some sort of a deal that would be favorable to it. I should point out that when Iran shut down the Strait of Hormuz, we expected the oil crisis to actually be a lot worse than it turned out to be.

And the reason why it didn't turn out to be that bad is that both Saudi Arabia and Qatar found ways to get some of their oil and gas out through other means. So instead of ships, which they couldn't use through the Strait of Armuz, they had pipelines such as the East-West pipeline, which Saudi relied on quite heavily. And so methods like that allowed the likes of the UAE in Saudi Arabia to mitigate some of the supply disruptions to about 40, 50 percent.

And so if Iran had hoped to really cripple the global economy, it wasn't quite able to go that far. Iran and Russia are obviously strategic partners. Russia has now reportedly been helping Iran build back their missile arsenal. And just given everything we've been talking about today, like, how are you thinking about how this, how circular this all is and what it could mean for any. possibility of relief on the horizon. It is very circular on energy, as we've been discussing. It is circular on trade. It is circular on financing as Iran and Russia and China use each other to evade the worst of Western sanctions. But they're also connected on weaponry. You know, Russia has long been

using Iranian Shahed drones to attack Ukraine over the last few years. In the last few months, Moscow has souped up those same Iranian drones to become jet-powered. Essentially, they're like missiles now. They go at close to 400 miles an hour. They carry a payload of 200 pounds of explosives. And they're much harder to stop because they fly higher and faster and Ukraine has run out of Patriot Interceptors. So Moscow can produce these jet-powered drones in the hundreds and thousands and swarm Ukraine in a way that kind of makes it unstoppable. Now, the reason why I say this is connected is Russia got the initial technology from Iran. It souped it up.

There's every chance it could now pass on these souped-up pseudo-missiles to Iran, which Iran could then use in the Middle East at a time when the Middle East, Gulf countries and the United States have already expended a large amount of their defensive munitions, their patriot interests. They're thad interceptors. So this circularity with a lot of Chinese technology and help thrown in is really styming the best of Western and Gulf efforts to keep up in this war. You talked before about how the Saudis were able to adapt a little bit at the start of the war and use this different pipeline and how because of that, that prices didn't go through the roof initially. And my understanding is another reason why they didn't go through the roof initially

was because there are stockpiles, right? Reserves. And so I just want to come back to the International Monetary Fund and their world economic outlook that they put out this week. And they're warning that now oil stocks are low, government budgets are stretched, and the global economy could soon test the limits of resilience. And, you know, as we continue in these energy wars that are really going anywhere, could you just paint a picture for me of what that could actually look like?

Sustained high prices of energy are painful for everyone. They are especially painful for importers of fuel. So I'll remind our listeners that the United States is the world's biggest energy superpower right now. It is the biggest exporter of crude, the biggest exporter of natural gas. America is going to be just fine. The countries that are not going to be fine are major net importers of fuel. I'm thinking here of India, the world's most populous country. I'm thinking of Pakistan and Bangladesh, both of which have between 175 and 225 million people. I'm thinking of Indonesia, more than 250 million people. These are countries that rely on the rest of the world to import their energy, as energy prices go up. Not only do these countries have to pay more, they also lack the fiscal space and ability to subsidize energy for their people. They have to buy energy in U.S. dollars. Their currencies are depreciating, so it becomes more expensive with each passing day. And lastly, they have people who are least equipped to deal with these shocks. If you are

an auto-ricksha driver in the city of Dhaka in Bangladesh, you are already. spending a significant amount of your daily income on fuel. If fuel prices double, for example, that means you're struggling to run your business. You're struggling to make ends meet in a way that is not the same were you to be a truck driver in Dallas, Texas. So there is certainly a sense that there are winners and losers in every conflict. There are also countries that hurt and countries that hurt disproportionately more than everyone else. And those, sadly, as always, are the countries of the global south. We haven't yet talked about China and where they, where they're positioned and all of this, you know, the other big superpower, how have they been

weathering this? So China has become simultaneously alongside the United States, one of the world's biggest swing consumers and swing producers of energy. So, when the Iran War broke out in February, China did several things all at once. It began to draw on its strategic fuel reserves, and China has the world's biggest reserves, about 1.5 billion barrels of oil, the most by far. It began to draw on some of that. It also began to reduce some of its demand, and it did so by allowing prices to rise gently, which immediately meant people were avoiding using their cars a little bit. And then lastly, China also has this huge network of electric vehicles, massive solar energy infrastructure. So it was able to rely on that more. So it was able

to absorb a lot of the global shock in a way that would have been impossible a few years ago. Now, all of that is what I said about China being a swing consumer. But it is also a swing producer. If you think about energy, China is by far the biggest producer of solar energy in the world. I mean, to give you a sense of the numbers, in one month, China adds more new solar capacity than the country of Poland consumes from all sources in an entire year. That's in one month. That is China's ability to grow and expand its solar production. And it is slowly passing that on to the developed world, go to Pakistan, go to Nepal, and you will see rural countryside filled with solar panels that individuals are purchasing from China because they know that this is the way forward.

It's cheaper. It's better. It's sustainable. So China's had an immense impact on the global energy markets. Is it possible, though, the one scenario to come out of these energy wars and all this conflict is a greater push towards renewables from countries all over the world? the world. I hope so. I think that is the best case scenario. I think there's also a scenario where we are entering a world in which there are petro-states and electro-states. And I think the electrostates

led by China and other countries that clearly believe that solar energy, clean energy is the way to go and are just dramatically ramping up investments on it. But there are also countries that have really doubled down on fossil fuels. And the United States is number one in that category, especially under the Trump administration, but there are also the traditional oil producers in the Gulf and some in Latin America as well. I think ultimately all of these countries should realize that you kind of need all of these sources of energy and all of the above approach, because energy demand is only growing globally. And if AI takes off, as people say it will, and we need more data centers and growth in the developing world takes off the way we hope it will

and people there require more energy as they undoubtedly deserve, then global energy needs cannot just be met by the existing makeup. Ravi, this was great. Thank you so much. Really interesting. My pleasure. All right, that is all for today. I'm Jamie Poisson. Thanks so much for listening. Talk to you tomorrow. For more CBC podcasts, go to cbc.ca. slash podcasts