Strait of Hormuz · Fortune Technology
A closed Strait of Hormuz, which carries a fifth of the world’s oil supply and a significant share of liquefied
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Energy shocks have always been a threat to the broader economy, but energy is now deeply embedded in complex, electricity-dependent business systems.
Key facts
- Boards should ask management to model how oil priced at $130 a barrel could hurt the company
- For many corporate leaders, energy risk means higher fuel and electricity bills
- Energy is a problem for governments to solve, not for boardrooms to manage
- Energy shocks have always been a threat to the broader economy, but energy is now deeply embedded in complex, electricity-dependent business systems
Summary
For many corporate leaders, energy risk means higher fuel and electricity bills. That assumption is outdated. The effects of a disrupted energy market now travel faster and further than in previous crises, which makes energy security as much a business issue as a public policy one. Originally, governments handled national energy security through diplomatic efforts and emergency planning.