As of Wednesday, the Iran War is in ceasefire.

But the effects continue to ripple across global energy and power markets.

So we sat down with Jeff Currie, Chief Strategy Officer of Energy Pathways at Carlyle, and formerly Global Head of Commodities Research at Goldman Sachs, to get his outlook. He’s widely credited for calling the commodity supercycle of the early 2000s, and more recently ‘the revenge of the old economy’ thesis, including The New Joule Order.

The interview has been edited for clarity and brevity, so read on for that and takeaways below, butyou can watch the full interview on YouTube here.

All that, plus Meter Reading, what’s On the Docket, and more.

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Carlyle’s Jeff Currie on the structural change coming

The bargain that trades US security for dollar dominance is breaking down, according to Jeff. That triggers a capital rotation back into physical industries, energy strategy shifts from cooperation to hoarding, and batteries’ new security premium because local, non-portable power is hardest to disrupt. That’s structural regime change, and it’s happening now.

1. We're entering a massive capital rotation back into "asset heavy" industries. Currie expects trillions to flow out of tech/software and back into physical infrastructure (materials, manufacturing, energy, including clean energy). For power developers and utilities, this means capital availability could grow, but so will cost inflation for equipment, labor, and materials
2. It's BRICS vs. G7. Hormuz isn't closed to everyone, it’s really just complicated for the West. China now effectively controls metals, chips, and oil access. The electrostate vs. petrostate dynamic is accelerating. Meanwhile, long-term assumptions about fuel availability, trade routes, and pricing need to be stress-tested against a world where the US security umbrella is less reliable and supply chains are more fragmented.
3. For power: diversify your sources. Your grid should look like a hybrid car - able to run on anything, from solar to wind to coal to nukes - so you have optionality when the next Hormuz happens.
4. Bonus: Batteries come out on top. If Currie could put all his money into one technology, it's batteries. The military case, the grids case, and the security case all converge on storage.

Sightline: You've been writing about the ‘security premium’ for a long time, and Hormuz just stress-tested it in real time. You compared it to a mirror of 2020, when COVID broke oil prices to negative $36 a barrel. Where does the mirror image take us? Where do things go from here?

Jeff Currie: Pulling demand out of the fabric of the economy is going to be a lot more painful than shutting-in a well, on the supply side. The cost of taking barrels out of the system, you're already seeing it. Today, people are starting to go uh oh, we're in trouble. And WTI, dated Brent, these markets are starting to move now. The math on this says mid-April to end of April, you're out of inventory. Once you're out of inventory, then you gotta ration demand.

How high can this go?We're in the middle of a repricing of the physical world. And when we think about repricing, whether it's copper, oil, gas, all the raw materials for all these different entities, the upside here is I don't think anybody has an idea.

What we're gonna do is we're gonna pull trillions of dollars out of the new economy and put it into the old economy[‘asset-heavy’], and it hasn't had money since 2013, 2014, and it's not prepared for it. It'll create cost inflation, which will drive up the underlying cost structure of the industries.

Sightline:If we're going back to the old economy, obviously energy and energy security are more important than ever. In your mind, what are the realistic options on the table that fit this Joule order?

Jeff: Well, France has the lowest carbon footprint of any industrialized country in the world.

It didn't get there because it wanted to save the planet. It got there because Charles de Gaulle forecasted exactly what is happening today. And that's why he got to 90% nukes.

And I think it goes back to the point about the portability and storability. The more portable, the more storable it is, the less secure it is.And the dirtier it is 'cause it has to be organic. Because really, what is oil? It's solar. All oil is is solar energy stored in a natural battery that took, what, a million years to create the battery. All of that, the hydrocarbons are just simply batteries for solar energy.