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Extreme heat is the deadliest weather phenomenon in the United States. It's also one of the easiest to underestimate: We feel it on our skin, or perhaps see it shimmering in the air around us, but it doesn't announce itself with the destructive aplomb of a hurricane or wildfire. Still, heat waves are becoming practically synonymous with summer.
Climate change is only making heat waves worse. They're getting more frequent, up from an average of two per year in the United States in the 1960s to six per year in the 2010s and '20s. They're also about a day longer than they were in the ‘60s, and they're more intense; those two factors combined, in particular, make them more deadly. This year's expected El Niño will bring even more heat with it: NOAA's summer outlook for the United States, shown below, paints a swath of above-average temperatures across much of the country.

I’ve spent a lot of time thinking about how to cover heat waves. Each is unique — suffering of any kind is always unique, even if the broad strokes are not — yet the things one can say about them are, for the most part, largely the same. Records will break, power grids will strain, and people will be hurt: This is the reality of climate change.
So this year, we are trying an experiment: We will document particularly notable heat waves around the world as they happen, but rather than devote separate stories to them, each heat wave will get a short entry within this larger page. We will call out especially vivid details or statistics and include links to local outlets that can provide more information to anyone looking for it.
The goal here is to create a record of the very real impact of climate change today. By the end of the summer, this page will likely be filled with entry after entry showcasing the ways heat affected people around the world over the course of a few months. This is, I am aware, potentially fertile ground for climate anxiety, but our hope is that the project can help us recognize how our lives are changing and allow us to refocus on what we can do to adapt to our new reality.
Each entry has its own URL. If you wish to share details of any particular heat wave, simply scroll to that entry and hit the share button on your phone or copy the link in your browser. If you'd like to share this tracker as a whole, scroll back up to this introduction. This timeline will be in reverse chronological order, or in other words the newest events will appear at the top of the page.
This project is publishing in the midst of a heat wave hitting multiple Asian countries, and we’ve also included a couple of heat waves that have already come and gone; as the summer progresses, you'll see updates from the entire Heatmap staff and the gradual shaping of a larger story of heat. Again, this is an experiment, and we'd love to hear what you think about it — if you have strong thoughts one way or another, please send them to neel [at] heatmap [dot] news. —Neel Dhanesha
September 6: As we near the end of the summer — though ambient temperatures this week may suggest otherwise — the World Meteorological Organization (WMO) has announced that Earth just had its hottest three-month period on record, and the year so far is the second-warmest after 2016, which saw an extreme El Niño.
“Climate breakdown has begun,” said UN Secretary-General António Guterres in a statement. “Leaders must turn up the heat now for climate solutions. We can still avoid the worst of climate chaos — and we don’t have a moment to lose.”
According to the Copernicus Climate Change Service, August is estimated to have been around 1.5°C warmer than the preindustrial average. Last month saw the highest global average sea surface temperatures on record, at 20.98°C, and Antarctic sea ice was at a record low for that point in the year. Those sea surface temperatures will have a significant impact on hurricane season; as we saw with Idalia, extremely high ocean temperatures can supercharge tropical storms.
These numbers are no surprise — scientists have, of course, been warning of these catastrophic impacts for years — and this report is just the latest in a long line of UN reports that catalog the ways our planet is changing. The question, as always, is if this report will spur any more action than the previous ones did, or whether it will amount to yet another howl lost in the wind. —Neel Dhanesha
August 23-28: On Thursday, record-breaking heat tied the hottest temperature ever recorded in Houston at 109 degrees. In Dallas on Friday, highs climbed into the high 100s. And in Austin on Sunday, the temperature climbed up to 109 degrees. From Thursday to Sunday, the Electricity Reliability Council of Texas issued a conservation request every day — asking Texans to lower their energy use as air conditioners blasted.
Texans will get a relative reprieve from the heat over the coming days: Dallas won’t cross back over the triple-digit mark until Saturday, while Houston won’t get hotter than 100 degrees this week. Still, temperatures remain high — a reminder that just because summer break is over in many places, summer weather isn’t, making air conditioning in schools and on buses more critical than ever. —Will Kubzansky
August 22: The Midwest joins the South and Southwest this week in pulling the short straw of weather forecasts. The National Weather Service projects a large heat dome will “persist in at least 22 states until the end of the week,” Axios reports, affecting 143 million Americans. Numerous cities are experiencing heat indexes between 110 and 115 degrees Fahrenheit; Lawrence, Kansas, even reached a “feels-like” temperature of 134 on Sunday.
Not only will the extreme highs endanger lives, the heat waves might threaten “a bumper U.S. harvest that’s key to keeping global inflation in check,” Bloomberg reports. The United States expects to reap its second largest corn harvest on record this year, but the upcoming heat might dry out fields that are already showing signs of being parched.
Over the weekend, relief for the Midwest will come from cooler winds flowing down from Canada, AccuWeather reports. Unfortunately, the welcome breeze might also come along with “bouts of poor air quality” and smoke from Canadian wildfires. —Annie Xia
August 16: With triple-digit highs, the Pacific Northwest has joined the ranks of states breaking heat records this summer. Portland, Oregon, hit 108 degrees Fahrenheit on Monday, a record for the month of August. Seattle, Washington, also set a new daily record on Monday when it reached 96 degrees.
Combined with strong winds and moderate to severe drought levels, high temperatures in the region also mean heightened wildfire risk. Almost 3,000 firefighters are already “battling the seven large fires burning across Oregon and Washington,” CNN reports.
The sweltering temperatures continue a streak of oppressive summers in the Pacific Northwest. Dr. Steven Mitchell, medical director of a Seattle hospital’s emergency department, told The New York Times that “he couldn’t remember treating a single case of severe heat illness or heat stroke” before 2021, when a deadly heat wave struck the region. —Annie Xia
August 9-11: Florida is often synonymous with heat, but the heat index in Tampa Bay climbed up to 112 degrees on Wednesday — flirting with 113, the mark at which an excessive heat warning is issued. The Tampa Bay Times reported that the warning issued Wednesday was possibly the area’s first excessive heat warning ever, with the caveat that records might be faulty.
While the heat has let up slightly, a heat advisory remains in effect from Fort Myers up to Chiefland, and the area has exceeded its electricity demand records twice this week. On Friday, the heat index at Tampa International Airport reached 110 degrees, and values are expected to climb up to 108 on Saturday, according to the National Weather Service. —Will Kubzansky
August 7: In places like New Orleans, the old adage applies: It’s not just the heat, it’s the humidity. The high is set to hover between 100 and 97 through Friday, but the heat index will sit between 116 and 111. Louisiana, like much of the country, is seeing an unusually hot summer: Baton Rouge experienced its warmest month on record in July. All the while, central Mississippi is experiencing highs between the high 90s and low 100s, with heat indices reaching 120 degrees, according to the National Weather Service’s outpost in Jackson.
The heat killed 16 Louisianans in June and July. And given that extreme heat causes the worst impacts for people experiencing poverty and creates particularly devastating effects for Black Americans, it’s worth noting that Mississippi and Louisiana have the two highest poverty rates in the country as well as the highest proportion of Black residents of any two states. —Will Kubzansky
August 2: Iran is shutting down. The New York Times reports that government agencies, banks, schools, soccer leagues are all closed Wednesday and Thursday, allegedly due to the heat, which is expected to reach 104 degrees Fahrenheit in Tehran. In Ahvaz, a southwestern city, the high on Wednesday is a blistering 123 degrees.
Per the Times, some Iranians have expressed doubts about the alleged reason for the shutdown — instead claiming that the country’s electric grid can’t meet demand. All the while, Iran faces extensive water shortages across the country, largely due to mismanagement of its resources. —Will Kubzansky
August 2: A deadly heat wave is striking both sides of the Sea of Japan.
In South Korea, two deaths were reported on Tuesday due to high heat — they were senior citizens working outside — bringing the death toll from the heat wave to 12. With temperatures above 100 degrees Fahrenheit in Yeoju, a city south of Seoul, the country has raised its warning system for heat to the highest level, the first instance since 2019.
And in Japan, a 13-year-old girl and an elderly couple died due to heat-related causes on Friday. Temperatures have climbed above 103 degrees this week in parts of the country, and 32 prefectures are under the government’s “special heatstroke alert,” according to The Washington Post.
Japan is coming off a brutal month of July, which included the longest run of 95 degree temperatures in Tokyo since records began in 1875. Heat waves are especially devastating for Japan, which has one of the world’s oldest populations. —Will Kubzansky
July 28: No American city has been more emblematic of this summer’s relentless heat than Phoenix, where the temperature has climbed above 110 degrees Fahrenheit for 29 consecutive days. That streak looks like it might finally come to a close, with highs ranging from 106 to 109 from Monday to Wednesday next week as the forecast calls for rain over the weekend. But by Thursday, the mercury will climb above 110 yet again.
With the heat showing no signs of truly relenting, Arizona Democrats have proposed a novel solution — calling on President Joe Biden to issue a presidential disaster declaration for extreme heat, unlocking the Federal Emergency Management Agency’s response capabilities. And all the while, more than 30 wildfires are blazing across the state of Arizona. —Will Kubzansky
July 26: For most of the summer, stories about extreme heat in the U.S. have been limited to the South and Southwest. That’s changed in the last few days, as heat is forecast to scorch the Midwest and Northeast this week. On Thursday, New York will see highs in the mid-90s and D.C. up to 99 — both with heat indexes in the mid-100s. In Kansas City, highs will sit in the 100s through Friday and climb back up into the triple digits again on Monday; Indianapolis will reach 99 degrees Friday.
Late July is an appropriate time for heat waves — and this burst does not look like a lengthy one, with the 10-day forecast dipping back into the 80s — but it’s also worth noting that cities like D.C. are less prepared for extreme heat than Miami or Phoenix. D.C. has entered a hot weather emergency, but in New York, some advocates have cautioned that the city is not ready for the challenges ahead. —Will Kubzansky
July 26: Devastating consequences of the climate crisis are playing out in Algeria, Greece, Italy, and Tunisia, as wildfires spread and take dozens of lives — more than 40 in total and 34 in Algeria alone. The wildfires are being driven in part by intense heat, up to 119.7 degrees Fahrenheit in Algeria and 120 degrees in Tunisia. While those temperatures have cooled slightly, they will reach up to 111 degrees in Tunis come Friday and already climbed into the triple digits in Greece on Wednesday. Meanwhile, Greek authorities have evacuated more than 20,000 people from Rhodes, a popular vacation spot. —Will Kubzansky
July 25: The summer has offered a deluge of heat headlines — scrolling through this page is the proof. But zooming out, the context matters: Has this summer’s heat been uniquely driven by climate change? The answer is almost certainly yes, according to a study from researchers at Imperial College London, the Royal Netherlands Meteorological Institute, and the Red Cross Red Crescent Climate Centre.
The flash study is not peer-reviewed — it moved too quickly to go through that process — but it notes that “without human-induced climate change these heat events would … have been extremely rare.” The high temperatures in North America and Europe, it adds, would have been “virtually impossible” without climate change. Heat waves may have still occurred, but the key is the intensity: In the U.S., Europe, and China, climate change accounted for between 1 to 2.5 degrees Celsius (1.8 to 4.5 degrees Fahrenheit) of additional heat. —Will Kubzansky
July 17: Records are falling left and right in the Southwest. At 118 degrees Fahrenheit, Phoenix broke its all time high temperature record on Saturday. The city is also approaching breaking its record for the most 110 degree days in a row. In El Paso, the temperature at the airport has hit 100 degrees for 32 consecutive days, the longest streak ever. And according to The New York Times, the National Weather Service called for 45 record highs across the U.S. last weekend.
And as wildfires burn in Southern California, the heat wave is showing no signs of letting up. Phoenix will see highs in the 110s through Monday, as will Las Vegas. At this point, the heat wave has been classified as another heat dome, and Texas is feeling the brunt of it too, with San Antonio and Austin under excessive heat warnings. The heat wave is most dangerous for vulnerable members of society, especially people who are homeless and seniors — placing an outsized and crucial burden on cooling centers in the Southwest. —Will Kubzansky
July 14: A year after Europe saw 60,000 excess deaths due to heat waves, according to a study published by the scientific journal Nature Medicine, Southern Europe is scorching again. In Greece, the Acropolis closed midday Friday to tourists with high temperatures in Athens expected to reach 104 degrees. Parts of Spain saw temperatures going up to 113 degrees Monday, and another heat wave is expected to arrive Sunday. Italy, in the meantime, is expecting that next week could break the record for the highest temperatures ever recorded on the continent.
Europe has taken a new approach to heat waves — giving them names like hurricanes in an effort to raise awareness about their severity, an idea my colleague Neel Dhanesha wrote about last year. The first round of heat this week was dubbed Cerberus; the second round set to arrive this weekend is named Charon. —Will Kubzansky

Grant Faint/Image Bank via Getty Images
July 12: In a summer full of record-breaking heat, the fact that it’s hot in Death Valley is almost comforting. On Sunday, the national park in the Mojave Desert, known for being the hottest place on Earth, is projected by the National Weather Service to reach 130 degrees Fahrenheit, which would probably tie the record for the world’s highest temperature. The uncertainty stems from some controversy surrounding the record: While the valley was said to have reached temperatures of 134 degrees in 1913, experts have questioned the legitimacy of that reading. That leaves 130 degree days in 2020 and 2021 as the hottest temperatures on record — in Death Valley or anywhere.
While Death Valley’s heat is something of a novelty, it has catastrophic impacts elsewhere. Las Vegas’s high will only be 12 degrees cooler (118 degrees), and temperatures will reach 106 degrees on the same day in San Bernardino. —Will Kubzansky
July 10: After 10 days with high temperatures above 110 degrees, the highs in Phoenix are forecasted to eclipse that mark for at least the next nine days. According to the National Weather Service’s Phoenix office, the record for consecutive 110-degree days is 18; the office is placing the probability that the record gets shattered at 50%. And like Texas’ heat dome earlier this summer, evening temperatures aren’t declining as substantially as they usually do, leaving Arizonans without relief.
In New Mexico, the National Weather Service office out of Albuquerque is describing the week ahead as “near-record heat.” And temperatures in Las Vegas, Nevada, are set to get even more brutal over the course of the week, with the high going from 107 degrees on Monday to a forecasted high of 117 on Sunday. The heat will also lead to brutal temperatures in Death Valley — potentially up to 127 degrees on Sunday — according to the The Washington Post. —Will Kubzansky
July 10: Texas can’t catch a break this summer — and the South is catching yet another heat wave as well. Heat indexes in Dallas, Houston, New Orleans, and Miami are set to reach 107 to 108 degrees this week. Water temperatures around South Florida are well above average, and the chance that rain breaks the heat in the area is limited over the next few days. This year is already the hottest on record in Miami, according to WLRN. —Will Kubzansky
July 7: Phoenix and Tuscon are under excessive heat warnings for at least the next six days. Afternoon highs are projected to reach between 105 and 115 degrees Fahrenheit — Friday will get up to 112 degrees in Phoenix — bringing temperatures above average for early July, according to AZCentral.
It might last well into the month. According to the National Weather System’s warning: “We are still anticipating this current heat wave to continue through next week and likely beyond with it rivaling some of the worst heat waves this area has ever seen.” A big heat wave also brings pressure to the electric grid, particularly in heavily populated areas like Phoenix, as residents crank up their ACs. One study from earlier this year showed that a five-day heat wave and blackout would combine to send more than 50% of the city’s population to the emergency room.
It’s also not just Arizona that will catch the worst of this wave: New Mexico, Las Vegas and Death Valley all have scorching temperatures in store over the next week, The Washington Post notes. —Will Kubzansky
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July 6: Outdoor work came to a halt in Beijing as temperatures reached 104 degrees Thursday in the Chinese capital. A heat wave is gripping parts of China, including the capital and the nearby Henan province. Before 2023, Beijing had experienced temperatures above 104 degrees six times, CNN reported. This year alone, the temperature has eclipsed that mark on five days. In Taiwan, temperatures are set to reach 104 degrees Saturday, according to the country’s Central Weather Bureau. All the while, flooding has also led to devastation in China, causing 15 deaths in Chongqing, Hunan province, and elsewhere. —Will Kubzansky
June 30 - July 5: In the Antelope Valley and Santa Clarita Valley, temperatures reached 105 and 101 degrees respectively Monday, the Los Angeles Times reported. David Gomberg, an NWS forecaster, told the Times that high heat is to be expected in Southern California around now — to some extent, the weather is “routine,” he said.
Still, temperatures climbed rapidly in the Los Angeles area beginning Friday, especially inland and in the desert. And because the rise came so suddenly following a temperate period, it may have posed an unusually high risk to Californians who hadn’t yet acclimated to the season’s hotter temperatures. Extreme heat can also create arid conditions begetting wildfires, though no reports of serious fires in California have emerged following July 4 fireworks displays. —Will Kubzansky
July 5: This year’s Fourth of July was the world’s hottest day on record, and that record will likely be broken again this summer. In Texas, the heat was nothing new: The last day El Paso recorded a high temperature under 100 degrees was June 15. Since then, every day has gotten up to the triple digits — with the heat reaching 108 degrees on June 26 and 27.
In other words, it’s still really, really hot in Texas as a heat dome remains firmly planted over the state. Some parts of Texas have seen a handful of cooler days — July 4 wasn’t quite as brutal in Houston, for instance, and San Antonio’s temperatures have largely fallen back into the ‘90s. But the southern part of the state is in what the San Antonio Express-News describes as a “rut”: Heat is giving way to marginally cooler temperatures but the weather is expected to get hotter and more humid again.
For older people or people who work outdoors, the sustained heat has proven especially deadly. The vast majority of Texas’s prisoners, meanwhile, are without air conditioning. —Will Kubzansky
The North Atlantic Ocean is in the middle of a startling heat wave that could have far-reaching repercussions.
The weeks-long marine heat wave broke records for the months of May and is expected to do the same in June. Sea surface temperatures around the U.K. and northern Europe are an astonishing 9 degrees Fahrenheit above average in places, The Washington Post reports.
“Totally unprecedented,” Richard Unsworth, a biosciences professor at the U.K.’s Swansea University, told CNN. It’s “way beyond the worst-case predictions for the changing climate of the region.” Scientists say the warming oceans could have significant consequences, from harming marine life to decreasing the sea’s capacity to absorb pollution.
Above-average heat has also hit the U.K. Temperatures are expected to hit 89 degrees Fahrenheit in southeast England over the weekend.
As a flotilla in the Atlantic searched for the missing Titan submersible, the prominent environmental writer Bill McKibben tweeted, “The truly terrifying news this week is not what happened deep beneath the sea, it’s what’s going on at the surface.” —Annie Xia
June 22: Texans will only get a brief reprieve from the most extreme highs of their heat wave before temperatures pick back up early next week. Notably, temperatures aren’t falling considerably at night, making the heat even more dangerous. North Texas will see the mercury rise up to 104 degrees through Thursday, with the small caveat that humidity will decline into a more comfortable range as the week goes on. In parts of Southwest Texas, the heat won’t let up at all: the high temperatures in Del Rio will hover between 107 and 110 through next Wednesday.
The Electric Reliability Council of Texas issued its first voluntary conservation notice of the heat wave this past Tuesday. While the utility was able to meet demand, it requested that all Texans, especially government agencies, reduce their electricity use.
Mexico is similarly seeing scorching temperatures, which have led to eight deaths already. And high heat in the Rio Grande Valley means that migrants who traverse the border in Southwest Texas could be left exposed to the same high heat, which can have deadly consequences. —Will Kubzansky
Week of June 19: Temperatures in the northern Indian states of Uttar Pradesh and Bihar, two of the most populous in the country, reached as high as 115 degrees Fahrenheit (46 degrees Celsius), CNN reports. The extreme heat triggered power cuts, leaving people without running water, fans, or air conditioners.
The Associated Press reports nearly 170 people had died as of June 20, overwhelming hospitals, morgues, and crematoria — although state officials dispute the connection to the heat wave. Nearly half of the deaths came from a single district, Ballia, in Uttar Pradesh; officials say they have opened an investigation into the cause, which they say could be linked to contaminated water. Members of opposition parties blame the state government and its chief minister, Yogi Adityanath, for not investing enough in medical facilities or warning residents about the heat wave ahead of time. —Neel Dhanesha
June 19: The numbers from Texas’ heat wave are already striking: Dallas tied a humidity record on Thursday, and tens of millions of Texans woke up Friday to heat advisories or warnings. Temperatures will approach — and possibly break — records in Austin early next week, with highs between 104 and 106 through Wednesday. In the area, the heat indices will be highest over the Rio Grande plains and coastal plains, according to the National Weather Service’s Austin/San Antonio office.
Houston, in the meantime, saw its first excessive heat warning since 2016, with heat indices potentially breaking 115 degrees Friday and Saturday. Texas’ grid has held up (so far) — though the Electric Reliability Council of Texas has projected that next week will shatter the record levels of electricity demand that were just set this week, thanks to the number of air conditioners expected to be on full blast. —Will Kubzansky
June 14: Triple-digit heat has arrived early in Texas. Large parts of central and southeast Texas saw the heat index climb into the 100s Wednesday, topping out in McAllen at a searing 118. The heat wave is expected to spread and last through the week, hitting San Antonio, Dallas, Houston, and Austin, where it will feel like 112 degrees Thursday.
But while meteorologists watch for record heat and humidity, others will keep their eye on the state’s isolated electricity grid. Its operators, the Electric Reliability Council of Texas, warned of record-breaking electricity use Friday, an ominous signal for a state that has struggled with deadly blackouts in recent years. But this is just Texas’s first test of the summer: The grid operators noted that the record-breaking demand will likely be surpassed later in the summer. —Will Kubzansky
June 7-11: As skies over New York and Washington, D.C., turned orange from wildfire smoke, Puerto Rico and nearby Caribbean nations sweltered under a heat dome. The Heat Index, which takes into account both heat and humidity, went as high as 125 degrees in parts of Puerto Rico — a number that Jeff Berardelli, chief meteorologist at Tampa Bay’s WFLA-TV, said was astonishing. Temperature records broke across the island.
The Puerto Rican power grid still hasn’t recovered after Hurricane Maria hit the island in 2017, and over 100,000 Puerto Ricans reportedly lost power (though, as Pearl Marvell pointed out in Yale Climate Connections, the exact number cannot be verified because the island’s power company asked PowerOutage.us, which tracks outages, to stop collecting data on Puerto Rico until it can “replace their technology and provide more accurate data”). As I wrote in May, the combination of extreme heat and blackouts has the potential to be incredibly deadly, though no deaths were reported from this heat dome as of publication. —Neel Dhanesha
June 5: Large parts of China have seen record-breaking heat over the past month, one year after the worst heat wave and drought in decades hit the country. This year, Yunnan and Sichuan provinces saw temperatures exceed 40° C (104° F); according to CNN, heat in some parts of the country was so bad that pigs and rabbits died on farms and carp being raised in rice fields "burned to death" as water temperatures rose. Henan province had the opposite problem; extreme rain flooded wheat fields there, ruining crops in the country's largest wheat-growing region.
Meanwhile, a prolonged heat wave in Vietnam is keeping temperatures between 26 and 38 degrees Celsius (78.8 and 100.4° F), prompting officials to turn off street lights and ask citizens to cut down on their power consumption to avoid blackouts. VNExpress reports that many Vietnamese citizens who can't afford air conditioners are seeking respite in public spaces like libraries, buses, department stores, and cafes. —Neel Dhanesha
May 12: Some 12 million people in Washington and Oregon were under a heat advisory for four days starting May 12 as temperatures in the region topped out at more than 20 degrees above the normal high at that time of year, which should have been in the mid-60s.
"It’s harder for people in the Pacific Northwest to cool down when it’s 90 out than for people in, say, Phoenix or Las Vegas — cities that were constructed with heat in mind," wrote Heatmap Founding Staff Writer and Washington native Jeva Lange in her larger story about this heat wave. "Seattle, for example, is the second-least-air-conditioned metro area in the country (behind only “the coldest winter I ever spent was a summer in” San Francisco). Just over half of the homes in the area have a/c, and many of them are new buildings." —Neel Dhanesha and Jeva Lange
April: A large, deadly heat wave baked much of Asia for two weeks in April, Axios reported. Parts of India saw temperatures beyond 40°C (104°F), while temperatures in Thailand reached their highest levels ever, breaking past 45°C (113°F) for the first time in that country's history. Thirteen people died in Mumbai, and hundreds of people across the Asian continent were hospitalized. —Neel Dhanesha
This article was first published on June 5, 2023. It was last updated on September 6, 2023, at 3:59 PM ET.
More about heat and how the world is coping:
1. The Deadly Mystery of Indoor Heat
2. Don’t Be Too Chill About Your Air Conditioning Dependency
3. America Is Depending on Renewables This Summer
4. Dermatologists Have Bad News to Share About Climate Change
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Current conditions: A cluster of thunderstorms is moving northeast across the middle of the United States, from San Antonio to Cincinnati • Thailand’s disaster agency has put 62 provinces, including Bangkok, on alert for severe summer storms through the end of the week • The American Samoan capital of Pago Pago is in the midst of days of intense thunderstorms.
We are only four days into the bombing campaign the United States and Israel began Saturday in a bid to topple the Islamic Republic’s regime. Oil prices closed Monday nearly 9% higher than where trading started last Friday. Natural gas prices, meanwhile, spiked by 5% in the U.S. and 45% in Europe after Qatar announced a halt to shipments of liquified natural gas through the Strait of Hormuz, which tapers at its narrowest point to just 20 miles between the shores of Iran and the United Arab Emirates. It’s a sign that the war “isn’t just an oil story,” Heatmap’s Matthew Zeitlin wrote yesterday. Like any good tale, it has some irony: “The one U.S. natural gas export project scheduled to start up soon is, of all things, a QatarEnergy-ExxonMobil joint venture.” Heatmap’s Robinson Meyer further explored the LNG angle with Eurasia Group analyst Gregory Brew on the latest episode of Shift Key.
At least for now, the bombing of Iranian nuclear enrichment sites hasn’t led to any detectable increase in radiation levels in countries bordering Iran, the International Atomic Energy Agency said Monday. That includes the Bushehr nuclear power plant, the Tehran research reactor, and other facilities. “So far, no elevation of radiation levels above the usual background levels has been detected in countries bordering Iran,” Director General Rafael Grossi said in a statement.
Financial giants are once again buying a utility in a bet on electricity growth. A consortium led by BlackRock subsidiary Global Infrastructure Partners and Swedish private equity heavyweight EQT announced a deal Monday to buy utility giant AES Corp. The acquisition was valued at more than $33 billion and is expected to close by early next year at the latest. “AES is a leader in competitive generation,” Bayo Ogunlesi, the chief executive officer of BlackRock’s Global Infrastructure Partners, said in a statement. “At a time in which there is a need for significant investments in new capacity in electricity generation, transmission, and distribution, especially in the United States of America, we look forward to utilizing GIP’s experience in energy infrastructure investing, as well as our operational capabilities to help accelerate AES’ commitment to serve the market needs for affordable, safe and reliable power.” The move comes almost exactly a year after the infrastructure divisions at Blackstone, the world’s largest alternative asset manager, bought the Albuquerque-based utility TXNM Energy in an $11.5 billion gamble on surging power demand.
China’s output of solar power surpassed that of wind for the first time last year as cheap panels flooded the market at home and abroad. The country produced nearly 1.2 million gigawatt-hours of electricity from solar power in 2025, up 40% from a year earlier, according to a Bloomberg analysis of National Bureau of Statistics data published Saturday. Wind generation increased just 13% to more than 1.1 gigawatt-hours. The solar boom comes as Beijing bolsters spending on green industry across the board. China went from spending virtually nothing on fusion energy development to investing more in one year than the entire rest of the world combined, as I have previously reported. To some, China is — despite its continued heavy use of coal — a climate hero, as Heatmap’s Katie Brigham has written.
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Canada and India have a longstanding special friendship on nuclear power. Both countries — two of the juggernauts of the 56-country Commonwealth of Nations — operate fleets that rely heavily on pressurized heavy water reactors, a very different design than the light water reactors that make up the vast majority of the fleets in Europe and the United States. Ottawa helped New Delhi build its first nuclear plants. Now the two countries have renewed their atomic ties in what the BBC called a “landmark” deal Monday. As part of the pact, India signed a nine-year agreement with Canada’s largest uranium miner, Cameco, to supply fuel to New Delhi’s growing fleet of seven nuclear plants. The $1.9 billion deal opens a new market for Canada’s expanding production of uranium ore and gives India, which has long worried about its lack of domestic deposits, a stable supply of fuel.
India, meanwhile, is charging ahead with two new reactors at the Kaiga atomic power station in the southwestern state of Karnataka. The units are set to be IPHWR-700, natively designed pressurized heavy water reactors. Last week, the Nuclear Power Corporation of India poured the first concrete on the new pair of reactors, NucNet reported Monday.
The Spanish refiner Moeve has decided to move forward with an investment into building what Hydrogen Insight called “a scaled-back version” of the first phase of its giant 2-gigawatt Andalusian Green Hydrogen Valley project. Even in a less ambitious form, Reuters pegged the total value of the project at $1.2 billion. Meanwhile in the U.S., as I wrote yesterday, is losing major projects right as big production facilities planned before Trump returned to office come online.
Speaking of building, the LEGO Group is investing another $2.8 million into carbon dioxide removal. The Danish toymaker had already pumped money into carbon-removal projects overseen by Climate Impact Partners and ClimeFi. At this point, LEGO has committed $8.5 million to sucking planet-heating carbon out of the atmosphere, where it circulates for centuries. “As the program expands, it is helping to strengthen our understanding of different approaches and inform future decision-making on how carbon removal may complement our wider climate goals,” Annette Stube, LEGO’s chief sustainability officer, told Carbon Herald.
In this special edition of Shift Key, Rob talks to Eurasia Group’s Gregory Brew about how the U.S.-Israeli-led conflict will reshape global energy markets.
The United States and Israel have launched a devastating new war on Iran. What has happened so far, when could it end, and what could it mean for oil, gas, and the global energy shift?
Rob is joined by Gregory Brew, an analyst with the Eurasia Group’s energy, climate, and resources team focused on the geopolitics of oil and gas. He serves as the group’s country analyst for Iran. He’s also an historian of modern Iran, oil, and U.S. foreign policy, and the author of two books about the subject.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap News.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from their conversation:
Robinson Meyer: I think the first place that people’s minds go when you’re talking about Iran, when you’re talking about the Strait of Hormuz, is oil. Why is the Strait of Hormuz particularly important to the global oil market? And then second of all, what have we seen as the initial effects here?
Gregory Brew: So the Strait of Hormuz matters for three reasons. One, it is a very narrow waterway. So it is quite easy, theoretically, to block it. Other waterways — even the Bab el-Mandab and the Red Sea, the Strait of Malacca, other strategic pathways through which large quantities of energy move — are not so easily disrupted as the Strait of Hormuz. That’s reason number one.
Reason number two, Iran. Iran is there. Iran frequently threatens to block the Strait of Hormuz, frequently threatens to close the Strait of Hormuz. It is a hostile actor vis-à-vis the other states in the region. We are now seeing proof of that, given that it is open fire on the GCC in a concerted way. That’s another reason why the Strait of Hormuz gets so much attention as far as the connection between the strait, the strait security and the situation in the global oil market.
The third reason — I guess there are four reasons. The third reason is the volume of energy moving through the strait. It’s close to a fifth of global oil supply. It’s 20 million barrels a day, sometimes a little more. It’s a significant portion of the global LNG supply coming from Qatar has to pass through the Strait of Hormuz. A large quantity of refined products, metal distillates, condensates, fuel oil moves through the strait. So the volume affected by the strait being closed or disrupted or affected in some way is very, very large.
Finally, fourth point, there’s nowhere else to go. You can’t go around the Strait of Hormuz. You have to go through it. Tankers that can’t transit the strait or are blocked from doing so have no other options. There’s no Africa route, as there was with the Red Sea disruption. So for those four reasons, the Strait of Hormuz gets a lot of attention. And it’s why it’s getting attention now. Although, interestingly enough, price of oil has responded, but has not moved so in a significant way, at least per some people’s expectations.
Meyer: Well, the theme of the year in oil so far has been that there’s a glut of oil. Or there’s at least a small glut of oil. We’ve kind of been dealing with that for a long time. And so I wonder if that is in some way — one hesitates to call this good for oil markets, but it is kind of solving an issue for the market. Do you think oil is the most important energy product affected by this war?
Brew: Well, it’s certainly the largest in terms of volume, given how much oil moves through the strait. However, I think this could end up being a gas story as much as an oil story.
You can find a full transcript of the episode here.
Mentioned:
From Heatmap: War With Iran Isn’t Just an Oil Story
From Heatmap: How Trump’s War Could Destabilize the Global Energy Market
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This transcript has been automatically generated.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap News.
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You can also add the show’s RSS feed to your podcast app to follow us directly.
Robinson Meyer:
[1:26] Hi, I’m Robinson Meyer, and you are listening to Shift Key, Heatmap’s podcast about decarbonization and the shift away from fossil fuels. It is Monday, March 2. Over the weekend, the United States and Israel launched a new war on Iran, killing its Supreme Leader and bombing hundreds of targets across the country. The war is a big deal for the United States, for Iran, for the Middle East, and for the global economy. And even though it was preceded by the largest buildup of U.S. military equipment in the region since 2003, it was still, in a way, surprising. There hasn’t really been any effort to sell the war to the American people. It’s still not clear that it was legal or constitutional. And President Trump has been hazy about his goals for the conflict.
Robinson Meyer:
[2:06] For our purposes, though, here at Shift Key, the war is going to have big implications for the world’s energy markets in the short term and the long term. Like all geopolitical shocks, it is going to shape how countries make decisions about energy long after this particular conflict ends. And the longer this conflict goes, the deeper its consequences could be. So for today’s episode of Shift Key, I wanted to get our bearings on this new war and what it could mean. Our guest today is Gregory Brew. He’s an analyst with the Eurasia Group’s energy, climate, and resources team, focusing on the geopolitics of oil and gas. He serves as the group’s country analyst for Iran. And he’s an historian of modern Iran, oil and U.S. foreign policy, as well as the author of two books about the subject. He’s going to walk us through what has happened so far, just how long this conflict could go on and what it will mean for energy. Greg, welcome to Shift Key.
Gregory Brew:
[2:56] Thanks for having me on.
Robinson Meyer:
[2:58] Can you start by giving us a macro picture of what has happened over the past 72 hours at this point?
Gregory Brew:
[3:05] Sure thing.
Gregory Brew:
[3:08] Early Saturday morning local time, so late in the evening on Friday night here in the United States, the U.S. and Israel launched a significant military operation against Iran. In the past 48 hours, the U.S. and Israel have bombed probably more than a thousand targets inside Iran. These are mostly military targets. Iran’s ballistic missiles, elements of its military infrastructure inside the country, its navy, its naval assets close to the Persian Gulf, all have come under significant fire. In addition, Israel has specifically targeted members of Iran’s leadership. Supreme Leader Ali Khamenei is confirmed dead. Other members of the leadership have also been assassinated. There are other members that their fates remain unknown. In response, Iran has fired a large number of missiles and drones at U.S. bases, at Israel. Somewhat surprisingly, however, many of Iran’s missiles and drones are being fired at Gulf Arab states. The UAE has come under intense bombardment. Bahrain, Saudi Arabia, Kuwait, even Oman, which is a state that’s pretty friendly to Iran, and Qatar all have come under attack from Iran’s drones and missiles. The impact to energy so far, Iran kind of informally declared the Strait of Hormuz closed in the first 12 hours of the conflict.
Gregory Brew:
[4:19] This hasn’t really been followed up with any official action. There haven’t really been many tanker attacks by Iran, but tanker traffic through the strait has come to an almost complete halt. Oil tankers, LNG tankers, tankers carrying refined products, most of them have kind of frozen in place as they await for some clarity as to the situation and as to the risk. Oil prices rose sharply. Sunday night when markets opened, the price of oil went up from about $73 a barrel to about $80 a barrel. Then it fell slightly. It’s at around $78, $79 now. Equally important, I think natural gas prices have increased sharply in various regional markets. The price of natural gas in Europe shot up dramatically today on news that Qatar was going to be shutting off gas production. That’s how the energy story has kind of played out. I should note at the time we’re recording, the war is still ongoing. U.S. and Israel still bombing Iran. Iran is still firing back. Doesn’t look to be concluding anytime soon.
Robinson Meyer:
[5:13] I want to get to the energy picture in a second, but let’s talk about what has happened as far as we can tell from the places that have been bombed from the kind of targets that have been chosen by the U.S. and Israel. Do we have a sense of what their goals are here?
Gregory Brew:
[5:28] We have a sense. I’ll say that. The president has made a number of addresses to the nation where he frames this operation in two ways. One, this is the U.S. and Israel using military power to significantly reduce the threat that Iran poses to U.S. interests, to U.S. bases, and to U.S. allies. In the run-up to this war, there was a lot of attention being paid to Iran’s nuclear program. That program was mostly destroyed in the war of last June, although elements of it remain. However, there were quite a few comments from U.S. officials and a lot being said in private, which suggested that the key U.S. and Israeli concern was not Iran’s nuclear program, but its stockpile of ballistic missiles. Iran is in kind of an interesting state as far as its military. It’s been under sanction for so long. Its ability to build up a conventional
Gregory Brew:
[6:16] military has been pretty curtailed. Like it doesn’t have advanced jet fighters. It doesn’t have a lot of advanced sophisticated military hardware. Where its military is kind of inferior as far as the region is concerned. What it does have, what it’s spent a lot of money, a lot of time and a lot of resources on, is developing a large number of advanced ballistic missiles. And so that’s been, I would say, the single largest focus of the operation. Israel and the U.S. taking aim at Iran’s missiles, trying to blow them up, trying to blow up the factories where these missiles are made, the stockpiles where the missiles are kept, the launchers that Iran uses. That’s the sort of military goal. Trump has been talking about regime change.
Gregory Brew:
[6:53] But the way he’s been framing it is interesting. He says that the U.S. supports regime change in Iran, but that it has to come through the actions of the Iranian people, that the U.S. won’t put boots on the ground, that there’s not going to be a ground invasion of Iran. So I think right now, I think the goal for the U.S. is somewhat open ended. I think they’re going to continue to bomb Iran so long as they see means to do so to keep degrading it to keep damaging it. If that ends with a new regime, great. But at the end of the day, so long as Iran is significantly weakened. And as so long as the threat that Iran poses to the U.S. and the region and to Israel has been significantly reduced, I think that’s enough of a win for at least the president to claim victory.
Robinson Meyer:
[7:30] What would that mean for Iran to be as a state that would have no more military, that basically lost its entire elite and senior leadership structure and has faced these large protests? Like, do we have any sense of what this would mean for the Iranian people?
Gregory Brew:
[7:49] Well, for the Iranian people, nothing good in the short term. Any kind of war puts immense strain on a country, on a people, on a society. We saw that in the war of June of last year. I talked to people in Iran quite frequently. And apart from the political sense, the sense of anger at the regime, the discontent that’s widespread at this point, there was a lot of trauma from the experience of being bombed for two weeks. And right now they’re being bombed not only by Israel, but by the global superpower, the United States. And it’s a campaign of bombing that doesn’t appear to be coming to an end anytime soon. This is going to do additional damage to Iran’s economy.
Gregory Brew:
[8:26] As far as the regime is concerned, there were plans that had been put in place even last June during the war with Israel to manage in the event of Khamenei’s sudden death by decapitation or assassination strike. So his death has not been a body blow to the regime leadership. There’s already a process that’s in motion to pick a new supreme leader. They’re likely to pick one in the coming days, they appear to be doing so quite quickly. That is their way of signaling that, hey, nothing’s going to change from this, right? Regime’s not going anywhere, the Islamic Republic will continue to stand tall. If Trump sees victory in blowing up most of Iran’s military, the Islamic Republic will see victory in surviving that conflict. So long as they emerge with their position more or less intact, which they’re likely to do. What we saw in January was a regime that has no compunction about using lethal force against its own people. The security forces are still in their control. The police are still in their control. The army hasn’t revolted. The leadership hasn’t cracked. So long as that remains the case, I think this war ends with the Islamic Republic still standing,
Gregory Brew:
[9:26] more or less, but in heavily battered form.
Robinson Meyer:
[9:29] Do we have any sense of how this ends on the U.S. side?
Gregory Brew:
[9:34] I think this ends when Trump decides it ends. Right now, there have been some recent comments from the president that sound defiant, that sound resistant to bringing the war to an end. I would hesitate to say, however, whether this administration wants this war to go on for more than a few weeks, right? A longer war keeps oil prices high. A longer war threatens further damage to the U.S. position in the region. Iranian missiles and drones are getting through. They are causing damage, not only to the U.S. bases, but to GCC states. And there’s only so long that the Saudis, the Emiratis, the Qataris are going to want to continue to be hit by Iranian drones. They’re going to want this war to end fairly quickly. As for Trump, if you look at past experience, the wars that he’s been able to deliver, the military interventions that he’s carried out and been able to frame as wins have been short. They’ve been decisive. They haven’t turned into prolonged conflicts. And I think that’s where his head is going to be, try to pull a victory out of something that lasts only a week or two. But right now, he’s signaling that he’s willing to go the distance. Part of that is in response to the Iranians, because the Iranians are treating this like a battle of wills. We can go longer than you, we can keep shooting, we can take the hit. But so long as we continue to cause damage and pain to you, it’s going to be in your interest to wrap this up sooner rather than later.
Robinson Meyer:
[10:46] It’s interesting because there’s two different Trumpian instincts here, or two different Trumpian tendencies. The first is to basically push through with a policy until he reverses it. And a longtime political strength of Trump’s has been that he can reverse any policy at the drop of a hat. And there’s no embarrassment, there’s no shame, that policy is over, and we move on.
Robinson Meyer:
[11:12] And the second, the second tendency here is that, as you were saying, he hasn’t been afraid to break norms, right? And we saw this at the end of his first term with the assassination of Soleimani in Iraq. We saw this term with the operation of Venezuela. And in Venezuela, there was a sense that, oh, my gosh, is the U.S. Now involved in a Latin American country? Are we involved in a process of regime change? And it turned out no, because seemingly they had already back-channeled with Delcy Rodriguez and she was going to be basically a U.S. puppet in the new kind of quasi-regime that emerged. But here it doesn’t seem like there is either a – if they had a goal, they’ve already accomplished it, which is decapitating the Supreme Leader. And if they had a kind of a back channeled puppet leader to put in charge of the country, Trump actually said yesterday that their second or third choices to lead the country had been killed in these military strikes. And so he didn’t have like a candidate. Now, of course, he wouldn’t reveal this, but he didn’t have some kind of candidate ready to go to take over Iran, who could then deal with the U.S. and be addressed to by the U.S.
Gregory Brew:
[12:23] Yeah, so I think the president is putting out a lot of different narratives around this, as far as what the U.S. goal is, whether it is meant to collapse the regime. I mean, he’s been saying things like, the IRGC will surrender, they’ll hand their weapons over to the people, which is a really nice idea. But it’s very difficult to see that happening in reality. It’s very difficult to see how that would happen. A Venezuela style transition is somewhat more plausible, or it could have been somewhat more plausible. But only really in a scenario where the U.S. and Israel deescalate following the assassination of Khamenei and they’re not doing that. They’re continuing to bomb Iran. They’re maintaining the pressure. Whether the United States is communicating with members of the Iranian leadership is beyond me. I couldn’t speculate as to that. I do see it as being plausible that they’re communicating to the Iranians, if you want this to stop, give up X, Y, and Z. We’ll keep doing this unless you surrender, unless you capitulate. And the Iranians are going to have a very strong sense to not do that. Expecting them to surrender misreads the Iranians, both in terms of their position, but also in terms of their ideology and their characteristics. They’re not going to back down.
Robinson Meyer:
[13:26] Can you walk us through some scenarios here? So what would a 10-day, I think there’s been some reference from the president, from others, that this could be a 10-day campaign. There’s been other timeframes that are thrown around. We’re going to get to them. But what would a 10-day campaign here look like, given that I guess we’re already on day three?
Gregory Brew:
[13:45] Yeah, we’re on day three. So the opening salvos included the most significant targets in Iran’s military. Its navy was heavily targeted in the opening days of the strikes. Obviously, Khamenei was hit first. I think he may very well have been the first target. There’s been some reporting to suggest that the Israelis decided to move forward the timeline of strikes because they saw an opportunity to strike at Khamenei, who is generally a fairly elusive figure. He spends a lot of time in secure locations. In this instance, he was at his residence. It was daylight, he was exposed, and they decided to go. This expanding over the next week, you know, the Americans, the Israelis could continue to strike at missile facilities, a lot of these facilities are hardened, they could keep the fight going so that they can get the Iranians to deploy their missiles so that the missiles can be destroyed in the air or on the ground. I think some of this will start to look a little bit like a war of attrition. By the end of the week, that’s probably how the Iranians are thinking about it. They’re shifting or likely will shift from firing lots of missiles to firing lots of drones, which they can do so more easily.
Gregory Brew:
[14:41] They have a lot more of them. They have somewhere in the realm or had somewhere in the realm of 2,000 short range and 2,000 medium range ballistic missiles when the war began, they have thousands of drones, and they can keep firing them in large numbers. So if the Iranian goal is to impose pain and cost to the U.S. to force them to deescalate, then the Iranians will keep shooting at GCC targets at U.S. bases and at Israel, so long as they can. For the Americans after 10 days, they probably will have done as much damage as they could do to Iran’s capabilities. Israel has also targeted internal security forces, police, the Basij paramilitaries that the regime uses to put down dissent. Again, I don’t know if the operation is actually aiming at regime change, but hitting targets like this will undermine the regime, will weaken its control on Iran’s internal security, will cause Iran to exit this conflict in a weakened state. That serves Israel’s interests, even if it doesn’t end up with the regime collapsing. I would expect more strikes like those in the days to come.
Robinson Meyer:
[15:36] Last question, and then we’ll move to energy, which is ostensibly the topic we’re talking about. What would a five-week campaign look like? Briefly, because that’s the other time frame I think we’ve heard from the president.
Gregory Brew:
[15:49] Yeah. I mean, a campaign could last five weeks. I don’t know if it maintains the same level of intensity because they will start to run low on targets. A five week campaign would likely involve more strikes on internal security forces, on leadership, on the apparatus of the regime. I think a five week campaign would be more geared around making the Islamic Republic’s position inside Iran untenable, either creating the environment for protests, creating the environment for internal fracturing, so that you get some kind of shift in the leadership towards individuals who are willing to capitulate, who are willing to come to terms with the United States. That’s, I think, what a five-week campaign would look like. But I also think a five-week campaign wouldn’t be carried on with the same level of intensity. The U.S. would continue strikes, probably at a lower rate. It would look, again, a little bit more like a war of attrition with the Iranians continuing to shoot back as far as they are able. The problem with a five-week campaign for me is that the political costs to Trump mount the longer this war continues, right? It keeps oil prices high, keeps energy prices high, the risk of U.S. casualties, the risk of damage. The longer he goes without pulling a win out of this, I think the weaker he looks.
Robinson Meyer:
[18:28] Something I’ve been thinking about is that the U.S. posture during this war, which is kind of all tactics, no strategy, is kind of derived from Israeli military approaches. But there was no effort to build up a constituency in the U.S. for this war. There’s no sense of existential risk like there is in Israel, around Iran, in the U.S., around Iran. And so ... to some degree, there are Israeli tactics and there is an Israeli posture that’s being borrowed for U.S. operations in this conflict. But there’s none of the domestic politics that makes that possible in the U.S.
Gregory Brew:
[19:07] Yeah, I mean, absolutely. Iran matters a great deal more to Israel than Iran matters to the United States, insofar as Iran matters to the United States. I do think, though, it needs to be remembered that the U.S. is committed to maintaining its position in military hegemony in the Middle East. And Iran is a threat to that position. It’s a threat to U.S. bases in the region. It’s a threat to U.S. partners in the Gulf. It’s obviously a threat to Israel. And Israel is a close U.S. ally. This is a relationship that’s come under political pressure lately. But as far as strategic cooperation, as far as the alignment of interests,
Gregory Brew:
[19:40] when Israel and the United States look at the region, they tend to have very, very similar views. And a key aspect of that view is Iran is a threat. So as far as the approach to Iran using military force, there has been a shift in the last two years. Some of that is Iran’s own doing. Iran chose to escalate in April of 2024 when it launched hundreds of missiles and drones at Israel for the first time ever. It was signaling that it was now willing to take direct military action against Israel. Israel responded by taking direct military action against Iran, and it has not gone well for the Iranians. In that sense, Trump is going further than any U.S. president has in the past. And he is following Israel’s lead to some extent. But I would hesitate to draw too much to say that there’s too much space between the Israeli and American positions as far as viewing Iran, viewing the region strategically. But certainly politically, no one in the country, no one in the U.S. is telling Trump a war with Iran is a national priority. A war with Iran is how you’re going to get your poll numbers up. A war with Iran is how we’re going to win the midterms. That does put constraints on how long the U.S. can continue this war and on how Trump is going to see any kind of upside from it.
Robinson Meyer:
[20:46] Nor has Trump tried to convince his coalition that a war with Iran is a national priority. But let’s talk about energy. I think the first place that people’s minds go when you’re talking about Iran, when you’re talking about the Strait of Hormuz, is oil. Why is the Strait of Hormuz particularly important to the global oil market? And then second of all, like what have we seen as the initial effects here?
Gregory Brew:
[21:09] So the Strait of Hormuz matters for three reasons. One, it is a very narrow waterway. So it is quite easy, theoretically, to block it.
Gregory Brew:
[21:19] Other waterways, even the Bab el-Mandab and the Red Sea, the Strait of Malacca, other strategic pathways through which large quantities of energy move are not so easily disrupted as the Strait of Hormuz. That’s reason number one. Reason number two, Iran. Iran is there. Iran frequently threatens to block the Strait of Hormuz, frequently threatens to close the Strait of Hormuz. It is a hostile actor vis-à-vis the other states in the region. We are now seeing proof of that, given that it is open fire on the GCC in a concerted way. That’s another reason why the Strait of Hormuz gets so much attention as far as the connection between the strait, the strait security and the situation in the global oil market. The third reason, I guess there are four reasons. The third reason is the volume of energy moving through the strait. It’s close to a fifth of global oil supply. It’s 20 million barrels a day, sometimes a little more. It’s a significant portion of the global LNG supply coming from Qatar has to pass through the Strait of Hormuz. A large quantity of refined products, metal distillates, condensates, fuel oil moves through the strait. So the volume affected by the strait being closed or disrupted or affected in some way is very, very large. Finally, fourth point, there’s nowhere else to go. You can’t go around the Strait of Hormuz. You have to go through it.
Gregory Brew:
[22:29] Tankers that can’t transit the strait or are blocked from doing so have no other options. There’s no Africa route as there was with the Red Sea disruption. So for those four reasons, the Strait of Hormuz gets a lot of attention. And it’s why it’s getting attention now. Although, interestingly enough, price of oil has responded, but has not moved so in a significant way, at least per some people’s expectations.
Robinson Meyer:
[22:51] Well, the theme of the year in oil so far has been that there’s a glut of oil. Or there’s at least a small glut of oil. We’ve kind of been dealing with that for a long time. And so I wonder if that is in some ways, one hesitates to call this good for oil markets, but it is kind of solving an issue for the market. Do you think oil is the most important energy product affected by this war?
Gregory Brew:
[23:15] Well, it’s certainly the largest in terms of volume, given how much oil moves through the strait. However, I think this could end up being a gas story as much as an oil story for two reasons. One, gas has already been physically affected. Just this morning, Qatar LNG put out a notice saying that it was halting production due to Iranian attacks on its facilities. Theoretically, this means that all Qatari LNG exports will be halted. And Qatar is among the top three global LNG producers. So if that happens, global LNG supply will be significantly constrained.
Gregory Brew:
[23:45] So far, there hasn’t been any significant constraints to oil supply. Tankers have paused in transiting the Strait of Hormuz, but physical disruptions haven’t yet occurred. The second reason is the state of the global gas market is tighter than the state of the global oil market. Oil is in a slight imbalance in supply versus demand. That’s been what has been keeping prices relatively low over the last six months, geopolitics notwithstanding. By comparison, gas inventories in Europe and Northeast Asia are fairly low as these countries are coming out of the winter months. So the effect of a Qatar shutoff or the effect of a significant disruption in LNG traffic through the strait, even if it is only short, could end up having fairly significant effect. Finally, prices, gas prices have shot up today much higher relative than to the increase in oil prices. So already the gas market is responding in a more significant way than the oil market has.
Robinson Meyer:
[24:34] Who will feel the effect of tighter and higher LNG markets and prices? I mean, is this primarily a Japan and Europe story? Is this something where in the U.S., I mean, we explored a lot of LNG, but would we expect those LNG prices to translate back into domestic gas prices?
Gregory Brew:
[24:50] I think gas prices in the U.S. are likely to remain fairly low. They may increase slightly as the average LNG price globally increases. But I think this will affect Europe, particularly as their inventories are somewhat lower than major Northeast Asia importers like Japan and South Korea. The Europeans are still getting over the long effects of the war in Ukraine, moving away from dependence on Russian gas. They’ve had to depend on LNG to a more considerable degree. So a disruption on this scale, if it proves lasting, could be quite bad for the affordability of energy in Europe. Europe’s not going to run out of gas, but it will be forced to pay more money for it. Finally, there could be a dynamic that we saw in 2022, where all other markets that can’t compete with the high prices that Europe is demanding feel the effects. Markets like Southeast Asia or South Asia will see perhaps less access to LNG if more cargos are being diverted to Europe to take advantage of the very healthy
Gregory Brew:
[25:41] arbitrage opportunities between Europe gas prices and those in the United States.
Robinson Meyer:
[25:45] What do you think we learned from the 2022 post-Ukraine energy shock that might be applied now? Like what emerged then that could affect what we’re about to see?
Gregory Brew:
[25:56] I think if this conflict does end up disrupting LNG exports in a significant way, where the disruption lasts more than a few days, where the prices rise and remain high, I think it will offer up a similar lesson to the war in 2022, which is that LNG can be very volatile. It can be very reliable, but during periods of intense geopolitical conflict with supplies like Qatar being affected by conflict, affected by security in the region, that ends up hitting consumers because it ends up, they end up having to shoulder much higher prices. They end up having to shoulder the burden of insecure energy. One of the arguments made against LNG over the last couple of years is that while it is, while it makes a lot of sense, the economics make a lot of sense. If it’s continually exposed to these kinds of volatile spikes, if geopolitics keeps the average price of gas much higher than that of coal or renewables, then ultimately LNG can’t compete with those alternative sources of supply. Even if the economics make sense, the geopolitics might not.
Robinson Meyer:
[26:54] Well, and this is what I was thinking. From some climate folks, I think there’s been a turn after this conflict, as there is after many conflicts, to say, look, this is why renewables are so important, because they don’t experience this price volatility in the same way that LNG does. The issue is coal also doesn’t really experience this price volatility. And frankly, many, many countries around the world, particularly those that suffer when LNG prices go up in sub-Saharan Africa and Southeast Asia, do actually have ample coal resources. And if they need to, they’ll learn from the Chinese example, as much as building solar and batteries is important, so is building a big coal fleet because you always have security of supply with coal.
Gregory Brew:
[27:35] Absolutely.
Robinson Meyer:
[27:36] Gregory Brew, thank you so much for joining us on Shift Key.
Gregory Brew:
[27:39] Thanks for having me back.
Robinson Meyer:
[27:42] Thanks so much for listening to this emergency episode of Shift Key. We’ll be continuing to cover the conflict at Heatmap News. That’s heatmap.news. Until then, Shift Key is a production of Heatmap News. Our editors are Jillian Goodman and Nico Lauricella. Multimedia editing and audio engineering is by Jacob Lambert and by Nick Woodbury. Our music is by Adam Kromelow. Thanks so much for listening and see you soon.