The global economy runs on fossil fuels, not renewable energy. The Iran war underscores the importance of oil in this regard. In the middle of February, two weeks before the war started, West Texas Intermediate oil, the United States’s benchmark, was trading at about $65 a barrel. On Monday, because of the Iran war and the closure of the Strait of Hormuz, WTI for May delivery is trading around $110 a barrel.

What is the longer-term outlook for global oil prices? The answer is clear. Over time, the price of WTI will drift lower. The global economy will be well supplied with oil, and hydrocarbons will continue to be the primary source of energy. The most exciting geographies for oil production are in South America, West Africa, and the Permian Basin of the U.S.