The Peter Zeihan Podcast Series - California’s Coming Energy Crisis || Peter Zeihan

Episode Date: April 27, 2026

The fallout from the closure of the Strait of Hormuz is reaching California, triggering a serious energy crunch. Join the Patreon here: https://www.patreon.com/PeterZeihan Full Newsletter:

Your job is changing, fast, new tools, new expectations, and real pressure to keep up. This isn't a someday problem. It's happening right now. That's where Codecademy comes in. Instead of just watching or reading, you learn by doing. From your very first lesson, you're writing real code directly in your browser. No setup, no guesswork. Whether it's AI tools, prompt engineering, data analysis, or cybersecurity, security, Codecademy shows you exactly what to learn and gives you a clear step-by-step path to get there.

So you're not just keeping up with tech, you're actually getting ahead. With structured career paths and real-world projects, you'll build skills you can use immediately on the job. Join millions of people already leveling up with Codecademy. Start your free trial today at codacademy.com. Hey, all, Peter Zain, here coming from Walla, Washington. That's a North Star Winery, which has Alder Merlo in the land if you're into that. Today we're talking about California in the context of the Iran War. Something that I have been warning people about since the conflict began and the Strait of Hormuz was functionally closed, which it remains close now, is that we're not simply dealing with a navigation block.

We are dealing with the fact that crude oil is shut in. And in certain Emirati and Saudi oil fields, they were designed for mothball and rapid restart. So this is how the Emirates and the Saudis controlled. global oil supplies is they have fields that are in a state of kind of warm shutdown where they can bring those fields back on in about 90 days. Most oil producers that are not in the shale world don't have that. So once you shut in a well, it takes significant work. You don't just turn a valve that it comes back on. It's one of the rethings that Americans often get wrong about OPEC. It's like with the exception of Saudi and the Emirates, nobody could do that. So when you have something

like the Persian Gulf shut in happen, they have to shut down these oil fields because there's nowhere to put it. So we have Iraq, Kuwait, gutter, Saudi, and the Emirates who have all shut down a total of about 10 to 12 million barrels of crude a day, only probably about 1.5 million barrels a day, which could actually be turned back on in any sort of meaningful time frame, and that's three months, which means that we've got crude that is now offline, not just for three months, but probably for at least a couple of years, maybe even more when you're talking about the two to three million barrels a day of production in places like Iraq, where it took them 20 years to bring it back after Saddam fell. Well, what that means is we're seeing the threads that

go out of the Persian Gulf shut down one after another. So at first, South Asia got shut off, then Southeast Asia. Then most recently in the last two weeks, both the Northeast Asians and the Europeans, had their final tankers of pre-war crude arrive. Well, this week, California joins that cluster. You see, because of the shale revolution, the United States is a significant net exporter of crude oil and especially a refined product. What is true for Texas is not necessarily true for every state. Now, California, for a mix of reasons, has decimated its local oil production, so it's only producing about 300,000 barrels a day anymore. But as the economy grows in the population, expands their oil demand keeps going up. So they now use about 1.4 million barrels a day,

which means that 1.1 million barrels a day has to be imported and just shy of half of that comes from Persian Gulf producers who suddenly can't get crude to market. And it's this week that the last of the pre-war tankers crossed the last little bit of the Pacific to come to California ports. Now the California energy shortage that is coming, that is imminent, it's not nearly as bad as what is China and New Zealand and Japan and India because they are part of a continental system that is in surplus. But if they can't refine enough locally, they have to ship it in from elsewhere in the country. And since there's no pipeline to transport oil or oil products across the Rockies, that means you either have to do it by truck or by rail. And so we're looking at

significant product shortages, but more importantly, higher prices for the West Coast specifically. Now, if you're in Texas, you're going to laugh this all the way to the bank. But every little bit of product that the United States has to keep within its own country to serve its own needs, California needs, Oregon needs, Washington needs, that's a little bit of fuel that can't be exported anywhere else. So we're just having one more little problem tossed into the global energy mix. And, you know, I've said this before. I'm going to underline it again. This doesn't come back with a peace deal.

This only comes back when the Persian Gulf is 100% safe again, if that's possible, and then years later when these fields can reopen and start shipping again. That's not this year, and it's probably not next year either. Your job is changing, fast, new tools, new expectations, and real pressure to keep up. This isn't a someday problem. It's happening right now. That's where Codecademy comes in. Instead of just watching or reading, you learn by doing. From your very first lesson, you're writing real code directly in your browser.

No setup, no guesswork. Whether it's AI tools, prompt engineering, data analysis, or cybersecurity, Codecademy shows you exactly what to learn and gives you a clear step-by-step path to get there. So you're not just keeping up with tech, you're actually getting ahead. With structured career paths and real-world projects, you'll build skills, you can use immediately on the job. Join millions of people already leveling up with Codecademy. Start your free trial today at codecademy.com.