The latest developments in the Middle East make one thing increasingly clear: the energy shock is no longer only about oil prices. It is about the progressive fragmentation of the physical infrastructure that allows energy to move around the world. Iran says it is close to reaching an agreement with Oman on a temporary shipping route through the Strait of Hormuz. At first sight, this should be good news. Hormuz remains one of the most important energy corridors in the world, and any reopening would ease pressure on oil and gas markets. But the political backdrop tells a very different story. Tehran has simultaneously appointed Mohsen Rezaee, a former commander of the Islamic Revolutionary Guard Corps and a long-standing hardliner, to lead the Supreme National Security Council. This is not exactly the signal of a country preparing for unconditional détente. The timing matters. Iran is negotiating, but from a position that continues to emphasise sovereignty, leverage and confrontation. Foreign Minister Abbas Araghchi has said that an agreement with Oman is imminent, but he has ruled out direct negotiations with the United States for now. More importantly, Iran has attached a long list of conditions to the full reopening of Hormuz: an end to the US naval blockade, withdrawal of American forces around Iran, sanctions relief, the release of frozen assets and compensation for war damage. In other words, the maritime negotiations are progressing, but the strategic conflict is not. This distinction is essential for markets.

A temporary corridor through Hormuz could certainly improve short-term energy flows. It could reduce freight premiums, lower insurance costs and allow some Gulf producers to normalise exports. But it does not remove the geopolitical risk premium. Iran still considers control over Hormuz a source of strategic power. The United States still insists on freedom of navigation. Neither side has changed its fundamental position. The most likely outcome is therefore not a return to the old normal, but a new and more fragile equilibrium. And this fragility is no longer limited to Hormuz. The attack claimed by the Houthis on Saudi Aramco’s Jazan refinery is another reminder that the Red Sea is now part of the same energy-security problem. Jazan has a refining capacity of around 400,000 barrels per day. The latest fire was reportedly contained quickly and caused no casualties, but the symbolism is more important than the immediate physical damage. Saudi Arabia has increasingly relied on its Red Sea infrastructure precisely because Hormuz became unreliable. If the alternative route is also exposed to attack, the concept of diversification becomes considerably weaker. This is the problem facing global energy markets today. The world does not necessarily lack oil. It increasingly lacks safe routes through which that oil can move.

The situation becomes even more complex when we look beyond the Middle East. Turkey is now restricting some commercial shipping access to the Black Sea following renewed Russian and Ukrainian attacks on merchant vessels. The Bosphorus and Dardanelles are among the world’s most important maritime choke points. Any restriction there affects not only oil, but also grain, fertilisers and other critical commodities. The Black Sea has already been repeatedly disrupted during the war in Ukraine. Now Ankara is taking a more cautious stance on transit authorisations, particularly for vessels heading towards Russia and Ukraine. This creates another layer of uncertainty in a global trading system that is already operating with less redundancy than investors often assume. The issue is no longer one conflict. It is the multiplication of strategic bottlenecks. Hormuz. The Red Sea. The Black Sea. Each of these routes connects major producers to global consumers. Each is now exposed to military, political or regulatory disruption.

And this is where the diesel market becomes particularly important. Oil prices receive most of the attention because they are visible and politically sensitive. But diesel may become the more dangerous inflationary story over the coming months. The Middle East and Russia together represented roughly one-third of global diesel exports last year. Both supply regions are now disrupted. Refineries in the Gulf have suffered from the conflict around Hormuz. Russian refining capacity has been repeatedly hit by Ukrainian attacks. Europe, meanwhile, remains structurally dependent on imported diesel because domestic refining capacity is insufficient. The numbers are already uncomfortable. European diesel inventories have fallen sharply and remain well below seasonal averages. Diesel prices have risen much faster than crude oil, reflecting the fact that product-market tightness is considerably more severe than the headline oil market suggests. This matters because diesel sits almost everywhere in the real economy. Trucks. Construction machinery. Agriculture. Industry. Heating. Logistics.

The inflationary transmission mechanism is therefore broader than for crude oil itself. A USD 10 increase in Brent is visible. A sustained shortage of diesel quietly spreads through almost every stage of the production and distribution chain. This is particularly problematic for Europe. The region has reduced its dependence on Russian refined products while simultaneously losing access to part of the Middle Eastern supply system. American refiners have helped fill the gap, but their ability to continue doing so indefinitely is questionable, particularly as winter approaches and US domestic demand increases. Asia cannot necessarily provide the solution either. Some Asian utilities may need more diesel themselves if LNG supplies remain disrupted. Refiners may also prioritise domestic winter demand or produce more kerosene rather than diesel. This means Europe could find itself competing with Africa and Latin America for a shrinking pool of Atlantic Basin supply. The consequences would extend well beyond the energy sector. Governments would face renewed pressure to subsidise consumers. And central banks would once again confront inflation caused not by excessive domestic demand, but by geopolitical fragmentation. This is precisely the type of inflation that monetary policy struggles to address.

This is why the current environment differs fundamentally from the low-inflation world that dominated the previous decade. Supply chains were once optimised for efficiency. They are now being reorganised for resilience. But resilience is expensive. More inventories. Longer shipping routes. Higher insurance. Duplicated infrastructure. Strategic reserves. Military protection. All of these increase the structural cost of moving goods. For investors, this has an important implication. Energy volatility is becoming less cyclical and more structural. The market will continue reacting sharply to diplomatic headlines. An agreement between Iran and Oman may push oil prices lower. A ceasefire can temporarily reduce risk premiums. But the underlying system remains vulnerable. The real investment question is no longer simply whether oil will be at USD 80 or USD 100. It is whether the world is entering a period in which the security of energy supply permanently deserves a higher valuation. I believe the answer is increasingly yes. The immediate risk may be easing in Hormuz. But the broader energy system is becoming more fragile, more politicised and more expensive. That is the structural change investors should focus on.