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While the Iran War has caused the greatest disruption in energy markets since the 1970s, the global economy has proved surprisingly resilient (The Wall Street Journal, subscription). But why?

An underappreciated reason: While some causes are well recognized—strong energy reserves and massive investments in artificial intelligence among them—this resilience has another, less obvious cause: the dramatic increase in energy efficiency around the world.

• “The energy needed to generate a dollar of gross domestic product, adjusted for inflation, has since 2000 fallen by about a third in the U.S. and Europe and by about 40% in China, according to World Bank data,” the Journal points out.

By the numbers: Economic experts don’t expect the closure of the Strait of Hormuz to have persistent ill effects, though that may change if the conflict goes on for a much longer time.  

• “[T]he [International Monetary Fund] said that assuming energy flows through the strait resume by midyear, it expects only modestly slower growth this year than in 2025, at around 3.1% versus 3.4% last year.”
• However, if the strait remains closed into next year, the IMF forecasts a growth rate of only about 2% for this year—alarmingly close to the brink of recession.

Efficiency around the world: Advanced economies have not just invested more in renewable energy sources, but reformulated consumer appliances to use less power and made industrial processes less energy-hungry.

• AI is also aiding these power-saving efforts. “France’s Saint-Gobain, a construction firm, said in a 2025 report that it has started using AI to monitor and adjust energy use in its fiberglass furnaces to boost efficiency, and is replacing natural gas with more efficient fuels such as hydrogen.”

Efficiency in the U.S.: The Energy Information Administration  calculates that energy consumption in the U.S. will stay “relatively flat or decrease slightly through 2050 … despite economic growth of 1.2%–2.2%. …”

• The agency credits the increasing efficiency of new technologies, which use less energy to produce the same (or more) goods and services.

The NAM says: “Manufacturers don’t just produce more energy—we make it go further,” said NAM Senior Director of Energy and Resources Policy Mike Davin.

• “Efficiency powers factories, lowers costs for families and businesses and supports the data centers fueling AI innovation. Greater efficiency has immediate and powerful impacts: efficiency gains across our sector are helping steady markets and power growth right now, and they must remain central to an all-of-the-above strategy for American energy dominance.”