Useful concept to understand how shocks are not only absorbed by the system but actively exploited to pass on associated rising costs to consumers and throw in a few extra percentage points while they're at it to increase their profit margins. Aka price gouging, a story as old as the hills reworked for late-stage capitalism. How much of the wealth of ordinary people can they hoover up and transfer to the billionaires before the process becomes self-cannibalising and can no longer continue? I don't think they'll stop until there are riots coupled with the threat of revolution.

Mind your wallets!
I

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https://xcancel.com/IsabellaMWeber/status/2035349999165333966#m

Isabella M Weber @IsabellaMWeber
Mar 21
The world energy shock is coming — it will deepen inequality in ways we've seen before. Our new @newstatesman piece argues that without urgent government action, the Strait of Hormuz crisis will ripple through our economies and rip apart our societies. Here's why. 1/

2/ One fifth of global LNG, 1/3 of crude oil, 1/3 of fertilisers, 2/5 of helium, nearly half of sulphur—all normally pass through the Strait of Hormuz. Since the US and Israel's attack on Iran, that flow has effectively stopped. The shock is here. The shockwaves are on their way.

3/ This is not just a commodity price story. Years of research with my collaborators showed that cost shocks don't just pass through markets neutrally—they give dominant corporations cover to hike prices, protect margins, and *increase* profits. We called this sellers' inflation.

4/ In sellers' inflation, corporations don't absorb input cost shocks — they transmit them across the whole economy through their own price-setting, and then some. We documented this during Covid and the 2022 energy crisis. The same mechanism is now being activated again.

5/ And shortages make it even worse. When inputs are scarce, companies gain temporary monopoly power. Customers can't switch. Firms can charge higher prices—as car companies did during the chip shortage. We're about to see that playbook repeated across energy, food, and beyond.

6/ The commodity price spikes in themselves create windfall profits for the affected sectors that go predominantly to the already rich via their shareholdings as we document for the 2022 oil and gas crisis. Ordinary people get few profits but bear the full inflation burden.

7/ That redistribution dynamic — from labour to capital, from the many to the few — is the political economy of sellers' inflation. Real wages in the UK and Germany only just returned to pre-energy crisis levels. Now we risk going through it all again, and worse.

8/ The worst-case scenario is stagflation: shortages severe enough to crush output, unemployment rising, workers unable to keep up with inflation, stock markets falling, credit defaults rising. The far right was the last crisis's political winner. We cannot afford to repeat that.

9/ The lesson of the last crisis is that preparedness matter — now governments must hurry. The toolkit is clear: reserves releases, multilateral wholesale price caps, margin caps along supply chains to contain sellers' inflation, nonlinear retail pricing for essentials

10/ And the most fundamental thing: end this illegal war. The fallout already in the pipeline must be addressed urgently. Governments must use every lever available — not let the shocks ripple through our economies and rip apart our societies.

11/ Full piece with @GregorSemieniuk in @newstatesman -- no paywall

https://www.newstatesman.com/international-politics/geopolitics/2026/03/the-world-energy-shock-is-coming