A World Without Cheap Oil
DOWNLOAD PDF ↓“They’ll see it at the pump, obviously, but over time, they’ll see it in everything being more expensive.” — Sam Ori, University of Chicago Energy Policy Institute
TL;DR: This isn’t a spike — it’s a structural reset. Ras Laffan (5-year repair), South Pars (struck March 18), Hormuz (<10% throughput). Goldman says $100+ oil through 2027 in a sustained disruption. Chicago gas is $4.46 today. Utility rate hikes totaling $437M are filed. The city carries $53B in unfunded pensions and a $1.2B deficit. The question isn’t whether this hurts — it’s how long.
Key Numbers
- $4.46/gal — Chicago gas today (up 43% from $3.12 one month ago)
- $100-112/bbl — Brent crude; Goldman worst case: $100+ through Q4 2027
- 5 years — Ras Laffan LNG repair timeline (17% of global capacity)
- $437M — Combined utility rate hikes filed (Peoples Gas + Nicor + North Shore)
- 146,899 — Chicago households already 30+ days behind on gas bills ($65.2M arrears)
- $53 billion — Chicago’s unfunded pension liabilities (exceeds 44 states)
- 50% — Share of food production variable costs tied to energy (IEA)
Duration Estimates
| Damage | Recovery Timeline |
|---|---|
| Hormuz closure | Weeks-months (but insurance normalization: 6-16 months) |
| South Pars | Months-years (depends on sanctions, regime stability) |
| Ras Laffan LNG | 5 years |
| Market psychology | Years (Goldman: “structurally higher long-dated prices”) |
Scenarios (12-24 month horizon)
| Scenario | Prob. | What It Means |
|---|---|---|
| Quick de-escalation (Brent $80 by Q3) | 15% | Gas $3.50. Heating crisis averted. Food inflation still arrives. |
| Prolonged elevation ($85-100 through 2027) | 40% | Gas $4-5 for 12+ months. Heating spikes winter 26-27. Manufacturing contraction. |
| Structural reset ($100+ through 2027) | 25% | Gas $5+ becomes normal. Recession by Q3. Emergency budget measures. |
| Escalation to $140+ | 10% | US economy at “standstill” (Oxford Economics). Gas $6-7. |
| Demand destruction | 10% | Oil falls via recession, not peace. Cure worse than disease. |
What You Can Do
- Gas: GasBuddy. 60c+ variation by neighborhood. Fill up before summer-blend transition.
- Heating: Apply for LIHEAP NOW: helpillinoisfamilies.com or 1-877-411-9276. Lock in supplier rates at illenergy.com.
- Food: Bulk staples now — worst price increases haven’t arrived (2-6 month lag). SNAP: abe.illinois.gov.
- Transit: CTA 30-day pass ($85) < two fill-ups. Metra monthly $101-168.
- Budget for $5 gas through winter: If Goldman’s right, this is 18+ months.
Best Memes
2022: “OIL SPIKE IS TEMPORARY” / 2026: THE INFRASTRUCTURE IS GONE — You can’t spike and recover when the production facility is rubble
THE GOOD NEWS: OIL PRICES FELL / THE BAD NEWS: BECAUSE NOBODY CAN AFFORD TO BUY ANYTHING — Demand destruction is not the victory you think it is
NICOR: 5 RATE HIKES SINCE 2017 / TOTAL: +$898 MILLION (+137%) — And they just filed for another one
GP-RPT-2026-013 | 25 March 2026
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