West Asia’s Energy Shock
Thermoeconomics in Real Time
Preface: the unfolding war in West Asia, catalysed by America’s attack on Iran almost 2 weeks ago, is a symptom of many things. A dying empire lashing out; a millenarian apocalyptic politics spurring on inane aggression; putative attempts to hobble China and all the rest. I’ve commented on much of this in the past week on various discussions on YouTube including with Jeff Rich (The Burning Archive), Carl Zha and David Oualaalou. This essay tries to take a step back from the “day to day” and view the war through a thermoeconomic lens.
The images and headlines coming out of West Asia this week tell a story far bigger than any single conflict. Iranian drones reportedly strike Qatar’s Ras Laffan and Mesaieed LNG facilities. Saudi Aramco shuts its massive Ras Tanura refinery after being hit. Tankers come under attack in the Strait of Hormuz, insurers pull war-risk cover, and more than 150 vessels sit stranded at anchor. QatarEnergy halts LNG production. European gas futures surge 39–50% in a single day. Brent crude spikes toward $120 a barrel a week into the war, sparking market manipulation efforts to bring the price down.
This is not random volatility. It is entropy accelerating through the global energy system - exactly the dynamic I describe in my new book, Thermoeconomics in a Time of Monsters, out 15 March 2026. (Kindle version out now.)
Every society must deliver food for people and fuel for machines. Both are forms of energy drawn from nature. Human economies are open metabolic systems that survive only by continuously accessing low-entropy energy, transforming it into useful work, and exporting high-entropy waste. The second law of thermodynamics guarantees that entropy - usable energy turning into unusable disorder - always increases unless deliberate negentropic interventions counteract it. Those interventions include energetic renewal, efficiency gains, resilient supply chains, and institutions that keep monetary claims aligned with real material transformation.
When those interventions weaken or are suddenly disrupted, entropy prevails, and even accelerates. Prices spike. Inflation pressures mount. Liquidity is diverted. Reproduction becomes harder. That is precisely what we are watching now.
The Gulf supplies roughly 20% of the world’s seaborne oil and a huge share of LNG. The Strait of Hormuz is the ultimate chokepoint. When that flow is threatened or physically interrupted - even temporarily - the energetic substrate of the global economy fractures. Mature Gulf fields already operate with declining underlying EROEI (Energy Return on Energy Invested). Add deliberate disruption, rerouting costs, insurance premiums and halted production, and the effective EROEI collapses further. The arithmetic of socio-economic entropy is brutally simple: less surplus energy available for the rest of the system.
In Systemic Exchange Value (SEV) terms - the framework I develop in the book - this creates a classic decoupling. Use value (the actual capacity to transform matter and energy through oil and gas flows) drops sharply. Yet exchange-value claims (futures contracts, derivatives, energy-stock valuations) surge on fear and scarcity premiums. Fictitious capital does what it always does in the autumn phase of a hegemonic cycle; it amplifies short-term disorder while postponing the day of reckoning. Liquidity rushes into energy hedges and defence stocks, but it cannot create new barrels or cubic metres of gas. The financial circuit races ahead of the energetic-material circuit.
The human and industrial consequences are already visible. European and Asian importers face sudden cost shocks that will feed through to households and manufacturers. Shipping rates double in spots. Non-energy industries in import-dependent economies see their input costs rise, squeezing margins and delaying investment. In the United States and Europe, where real wages for large parts of the population have been essentially flat for years, higher energy bills hit hardest at the bottom. More families turn to credit to bridge the gap. The energetic foundation of daily reproduction frays.
This is entropy made visible: a system that once delivered broad-based energetic surpluses now concentrates scarcity and disorder. The very infrastructure of modern life - cheap, reliable fuel - becomes a site of stratification and stress.
Contrast this with China’s deliberate negentropic strategy, which the book examines in detail. In 2025 China crossed a historic threshold: its clean-power capacity (solar, wind, hydro and nuclear) surpassed fossil-fuel capacity for the first time. It is on track to add terawatts of new generation over the next few years at a pace the West can only envy. Its integrated industrial policy treats energy not as an afterthought but as the foundational substrate of systemic reproduction. AI development, manufacturing expansion, and supply-chain design are all steered toward end-to-end EROEI improvement and circulation efficiency. When external shocks hit global fossil markets, China’s exposure is structurally lower because it has spent years augmenting its energetic returns rather than financialising around them.
China’s reported “peak diesel” in 2024 is far more than a statistical footnote in global oil markets. It marks a profound shift in the qualitative energetic profile of its regime of accumulation - one that aligns precisely with the thermoeconomic principles outlined in the book. Diesel, as a high-density, versatile fuel powering heavy transport, construction, agriculture and industrial machinery, has long been a cornerstone of China’s fossil-dependent growth phase. Its plateau and incipient decline signal a deliberate move toward higher systemic EROEI through electrification and renewable integration, while reducing exposure to volatile, geopolitically risky, and thermodynamically diminishing fossil options.
Data from 2024–2025 confirms the turning point. China’s consumption of key transport fuels - gasoline, diesel, and jet fuel - declined marginally in 2024, reaching about 8.1 million barrels per day (bpd), down from peaks around 2021 and only narrowly above 2019 levels, according to the International Energy Agency (IEA). Diesel, in particular, bore the brunt: analysts from Reuters, the Financial Times, and others reported declines of 2–7% in the second half of 2024. The IEA described combustion fuel use as having “reached a plateau,” with acceleration expected in the medium term. China’s National Petroleum Corporation (CNPC) research arm projected total oil demand peaking around 2025 before stabilising or declining, while diesel specifically weakened under pressure from LNG trucking and electrification.
The drivers are clear and negentropic in nature. Rapid electrification of transport - especially heavy-duty vehicles - is displacing diesel demand at scale. Battery-electric truck sales surged, capturing 22% of new heavy truck sales in the first half of 2025 (up from 8.6–9.2% in 2024), with light-duty electric trucks also rising sharply. LNG-fuelled heavy trucks, once a bridge fuel, peaked earlier (sales records in 2023–2024) but have since been overtaken by battery-electric alternatives in monthly sales. Together, new-energy vehicles (NEVs) and LNG trucks displaced tens of millions of tons of diesel equivalent in 2024 alone. This shift is not accidental: state-guided policy, subsidies, and infrastructure investment have steered liquidity toward higher-EROEI pathways - electricity from renewables (clean capacity surpassed fossil in 2025) rather than imported or domestically extracted oil.
In SEV (Systemic Exchange Value) terms, this represents a classic negentropic intervention. Diesel’s high volumetric energy density made it ideal for the expansionary phase of China’s accumulation regime, supporting rapid urbanisation, infrastructure buildout, and export-led manufacturing. But as those sectors mature and EROEI in mature oil fields declines (global average for conventional oil has trended downward for decades), reliance on diesel exposes the system to entropy: price volatility from chokepoints like the Strait of Hormuz, supply disruptions from geopolitical shocks and diminishing returns on extraction. Peak diesel mitigates these risks by shrinking the fossil share in the metabolic circuit.
Electrification upgrades the energetic profile qualitatively. Electricity, especially from solar, wind, hydro and nuclear (all with higher lifecycle EROEI than mature oil in many contexts), allows more efficient end-use conversion - electric motors convert 85–95% of input energy to motion versus 20–40% for internal combustion engines. This boosts overall systemic surplus: more useful work per unit of primary energy, shorter turnover times in supply chains, and reduced entropy from waste heat and emissions. Production processes follow suit; electrified industrial machinery, heat pumps, and green hydrogen pathways further augment EROEI across the economy.
For residual fossil needs, China retains strategic flexibility. Domestic oil production (around 4.3 million bpd in 2024) can be pushed harder if required, while imports from Russia (via pipelines like ESPO and Power of Siberia extensions) offer secure, lower-geopolitical-risk supply compared to Gulf routes. This diversification acts as a buffer, allowing time for the transition without abrupt entropic shocks.
Contrast this with regimes still locked into high-diesel dependence. Declining or disrupted EROEI in fossil chains - exacerbated by events like the West Asia disruptions - triggers cascading entropy: higher input costs, inflation, diverted liquidity and strained reproduction for households and non-energy sectors. China’s path avoids this trap by treating energy as the substance of value, steering investment toward renewal rather than financial postponement.
Peak diesel is thus a vindication of thermoeconomics: successful societies ameliorate entropic tendencies through energetic renewal. China’s regime of accumulation is consciously climbing to the next plateau of surplus potential - higher EROEI, greater resilience and reduced exposure to volatile fossils - while others risk accelerating disorder by ignoring the calculus.
In a time of monsters, understanding energy as the foundation of order separates those who renew from those who decay.
The West Asia crisis does not invalidate fossil fuels overnight, but it exposes the fragility of regimes whose reproduction still depends heavily on geographically concentrated, geopolitically vulnerable and thermodynamically mature energy sources. Declining EROEI in those sources was already a long-term headwind. Geopolitical disruption turns that headwind into a gale.
None of this is deterministic. Societies can still choose renewal. But renewal requires recognising the material reality: energy is not just another input; it is the substance of value. EROEI is not merely an engineering metric; it is the calculus of entropy or negentropy. When returns fall, the system must either find new sources of surplus energy or accept accelerating disorder.
The monsters Gramsci warned about thrive in exactly these moments of interregnum - when the old energetic-institutional settlement is dying and a new one struggles to be born. The current oil and gas shock is one such monster. It did not appear from nowhere. It emerged from the collision of geopolitical tension with an underlying energetic substrate already under strain.
My book is an attempt to give us the conceptual toolkit to see these dynamics clearly and respond coherently. Thermoeconomics reconnects political economy and geopolitics with the physical world at the precise moment we most need that reconnection. It shows why some systems (like China’s) are positioned to navigate shocks through deliberate negentropic augmentation, while others risk deepening the very entropy they are trying to contain.
The events of the past week or so are painful confirmation that energy is not a side issue. It is the foundation. When that foundation shakes, everything built on top of it trembles.
The book launches on 15 March 2026. I hope it arrives at a moment when more people are ready to look beyond the headlines and ask the deeper question: are we mastering the arithmetic of thermodynamic order, or are we letting entropy write the next chapter?