by R. Sasankan 

The global energy crisis has started to worsen and there does not seem to be any indication that it will ease anytime soon.

The International Energy Agency (IEA) has already characterised it as the "greatest threat to global energy security in history", surpassing the events of 1973, 1979 and 2022 combined. Blame it on the US-Iran conflict that broke out at the end of February and disrupted 20% of global oil and liquefied natural gas (LNG) flows.

The crisis has deepened because of the whimsical manner in which US President Donald Trump has threatened to use a formidable arsenal of tariffs and other instrumentalities of trade to stop India and China from sourcing crude oil from Russia. He has accused them of indirectly financing Russian President Vladimir Putin's war against Ukraine.

But on October 9, Trump - desperate to beat back the rising tide of resentment against him ahead of the mid-term elections in the US next month - executed a neat about-turn by dramatically announcing the import of 300,000 tons of Russian diesel to reverse the surge in pump prices in America.

Trump's sudden volte face - dictated by his political compulsions at a time when average diesel prices in the US have soared past $ 6 a gallon - amounts to self-serving hypocrisy. The international community and global media has slammed Trump's decision as a glaring double standard.

To make matters worse, reports suggest that the freight costs of shipping crude oil from the US Gulf cost to Asia has shot through the roof. Average tanker rates for shipments from the US to Asia are ten times higher than that before the outbreak of the Iran war. The cost is so high that Asian refiners aren't ordering much crude from the U.S. for November delivery. 

India has borne the brunt of Trump's tariff threats against its exports to the US by tacking on an additional 25% duty on shipments. In August, he had imposed another 25% duty to deter Delhi from sourcing crude oil from Russia, which was later put on hold.

One saving grace is that soon after Trump announced the purchase of diesel from Russia, he signed an executive order putting on hold a law that allows him to impose tariffs of 100% on India and other countries that purchase oil and gas from Russia. The US Congress passed the enabling legislation - titled the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 - on September 18 but it mercifully hasn't automatically triggered the tariffs.

President Trump defended his decision to import Russian diesel as a necessary move to lower energy costs for American consumers and farmers. He also accused critics and the media of hypocrisy, pointing out that European nations historically spent hundreds of billions of dollars on Russian energy imports.

India is the world's  third largest importer of crude oil. The US-Iran war has inflated India's oil import bill by 46.3% year-on-year to $90.6 billion during the first half of the financial year (April-September 2026), compared to $61.9 billion in the same period last year, according to the Petroleum Planning and Analysis Cell (PPAC). Brent crude has already jumped to $ 116.91 per barrel and the likely creep towards $ 120 per barrel has started to send chills through the world of petroleum. Every $10 per barrel increase in crude raises India's annual import bill by roughly $13-$15 billion.

Dozens of countries globally are affected by surging crude oil prices. The IEA, which comprises 32 member countries, has begun to coordinate emergency reserves to combat widespread disruptions.

Nations heavily reliant on Middle Eastern crude and the Strait of Hormuz face the dire prospect of a dramatic surge in transport and logistics costs. Refiners in Europe and major economies like the United Kingdom and Germany have faced escalating fuel and wholesale diesel price inflation. Countries like the United States, Myanmar, and Sri Lanka have absorbed massive retail fuel price increases (ranging from 38% to over 112% during peak escalation periods).

The big worry is that the US and Israel could escalate hostilities in the Middle East. Trump has repeatedly hinted that his forces in the region would resume strikes on Iran after November 3. Iran isn't backing down either. Recent reports quoting maritime security officials suggest that Tehran has stepped up attacks in and around the Strait of Hormuz by deploying guided missiles rather than attack drones.

Israel has its own compulsions in trying to destroy Iran's nuclear infrastructure which appears to have survived nine months of relentless attacks by the US-Israeli forces. Israelis will also vote next Tuesday in what is being billed as the most consequential elections in its 78-year history. Prime Minister Benjamin Netanyahu and his governing coalition is locked in tight contests in the first election since the Hamas attack in Oct 7 2023 that ignited the hostilities in the region.

The likely continuation of the war in the region spells trouble for every nation. Economies flounder when armies prepare to escalate hostilities. "A prolonged stalemate or further escalation in the Middle East could keep energy and food prices elevated and volatile, revive inflationary pressures, worsen fiscal and external balances, and weigh on growth," the IMF said in its latest World Economic Outlook.

Another winter of discontent looms.