Soon after the Trump administration launched its war on Iran, I called up Reed Blakemore, director of research and programs at the Atlantic Council Global Energy Center, to talk about the consequences. While oil and gas prices were already on the rise, there was still more hope then that the impact of the conflict might be short-lived. At the end of our conversation, Blakemore said plainly: “Let’s have a call again [next week] … We’ll have a much clearer picture of what the conflict is going to look like and what the story really is going to be for energy moving forward.”
Technology
How the spiraling Iran conflict could affect data centers and electricity costs
Energy infrastructure has become a key leverage point in the unfolding war
It’s a week later and the conflict has only escalated since the US and Israel launched strikes against Iran, killing Supreme Leader Ayatollah Ali Khamenei. Energy infrastructure has become a key leverage point in the unfolding war, with Israel hitting Iranian fuel depots and Iran targeting Gulf neighbors’ oil and gas infrastructure in its own strikes. Iran’s paramilitary Revolutionary Guard threatened on Tuesday not to “not allow the export of even a single liter of oil from the region to the hostile side and its partners until further notice.” Iran has reportedly also started to lay mines in the strategic Strait of Hormuz, through which one-fifth of global petroleum consumption and liquefied natural gas (LNG) trade used to move.
I talked to Blakemore again today about what Iran’s continued chokehold on the Strait of Hormuz means for energy costs and US tech companies’ rush to build out energy-hungry AI data centers.
This interview has been edited for length and clarity.
What’s your outlook now on how the conflict is likely to affect oil and gasoline prices?
Reed Blakemore: The fundamental issue right now, in terms of the energy implications of the conflict, is how the market is reacting to the uncertainty around safe passage through the Strait of Hormuz.
At the outset of the conflict when we saw insurance premiums going up for these ships, we were largely talking about it in the context of, Hey, it’s just gotten much more expensive for a ship to traverse the Gulf and therefore they’re staying out.
We’ve moved from that to actual concerns around the security of passing through the straits in the first place, so this is no longer an insurance cost issue as much as it is a safety and security issue.
We have virtually no traffic passing through the Strait of Hormuz. A lot of countries are beginning to shut in production. So there’s already this ripple effect emerging purely because the market and basically tankers are fundamentally concerned about whether or not they will be able to safely pass through the strait.
“There’s only so much that US energy dominance can do to shield US consumers”
The other feature that I think we’ve seen the market react strongly to in the past several days is a sense of how long this conflict is going to last. And I think you can look to the comments from the president in the last 72 hours and the market’s reaction as a major piece of evidence to that end. Moving into the weekend where the campaign had clearly escalated, the uncertainty around how open the Strait of Hormuz would or wouldn’t be was beginning to reach a fever pitch. The response from markets when they opened in Asia on Sunday going past $100 a barrel to nearly $120 a barrel is really a function of the market not having a sense that this would be over anytime soon. That pullback that we saw over the course of yesterday was in response to the president saying fundamentally that Hey, we have an end in sight to this conflict.
The United States is a major oil producer. I think the strategy of US energy dominance played a significant role in terms of shielding US consumers from the initial market consequences of the decision to go to war with Iran. The price increases we’ve seen thus far would have been much more responsive to the market volatility. That has bought the administration a little bit of time as it relates to how long until we see the gasoline prices really begin to pick up steam domestically. But as this conflict persists and the volatility in the market continues, we will begin to see upward pressure on gasoline prices, regrettably, over time.
There’s only so much that US energy dominance can do to shield US consumers from what is a globally traded market in terms of oil. Because the United States is a major domestic oil producer, it has the ability to put some downward pressure on its own gasoline prices.
But because via its oil exports it participates in a global market, it has that exposure to global oil market volatility.
Can we expect electricity prices to go up also? Why?
For the United States, the gas story is a little bit better, but not immune from the global market as well. Natural gas is largely regionally traded within the United States. The US is a major producer of natural gas for domestic consumption in a way that further insulates it. That makes the case of the United States much different than the gas price sensitivity we’re seeing in Europe or in Japan or other parts of East Asia.
The problem is similar to the oil story because the United States is a major LNG exporter. As natural gas prices increase elsewhere, LNG exporters will be incentivized to export more gas because that’s where the arbitrage opportunity is, and that will create the upward price pressure domestically in the United States.
What risks does that pose to tech companies and this push to build out more AI data centers and related energy infrastructure?
In the United States, the majority of the data center buildout has begun to be powered by natural gas. We’re not going to see electricity prices reach a crisis point in the United States in the short term because of this conflict. The time horizon that we’re talking about with gas and therefore electricity prices is likely in the time horizon of months rather than weeks you’d expect with oil.
However, the longer this conflict lasts and the more tightness we see in the global gas market — that will eventually permeate the United States and create that upward pressure on gas prices in a way which then affects electricity prices and then that brings the data center question into play.
I think the unique thing is it doesn’t necessarily affect the ability of data centers to purchase energy. Electricity costs are a relatively marginal proportion of the cost of building and operating a data center. What it does do is it only further inflames the energy affordability challenges that are currently deteriorating social license in the country for data centers. So the impact on electricity prices likely won’t directly harm data center buildout. The ancillary affordability challenges it will create will further entrench popular discontent with data center buildout, because data centers are simply making consumer electricity bills much more expensive.
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If you’re looking to pick up a pair of open-ear headphones for yourself — or your mom — Shokz is running a Mother’s Day sale. Now through May 10th, the company’s best pair of bone conduction headphones, the OpenRun Pro 2, are available from Amazon, Best Buy, and Shokz for around $139.95 ($40 off), their lowest price of the year. If you purchase direct, you’ll also receive a free waist bag (a $29.99 value).
While traditional headphones tend to block out the world, open-style headphones provide a safer alternative, letting you listen to music and podcasts while remaining vigilant. After testing the OpenRun Pro 2, The Verge’s Victoria Song said using them felt “like the stars finally aligning.” Unlike many open-ear headphones, they don’t skimp on bass or clarity thanks to a dedicated air conduction speaker, though they still won’t rival a traditional pair of in-ears when it comes to sound quality. Still, they’re more comfortable than earlier Shokz models, with flexible ear hooks and a lightweight neckband that creates a secure, natural fit, even for those who wear glasses.
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The United Arab Emirates just made one of the most aggressive moves yet in the global AI race. The country says it will integrate agentic artificial intelligence across half of its government operations within two years.
For context: Most governments are still debating whether to use AI. This plan puts speed and execution front and center and goes in the opposite direction of how governments typically handle major technology changes.
If it works, the UAE could offer a preview of how AI may reshape public services far beyond the Middle East. If it runs into problems, it could also highlight the risks of moving this fast when government decisions, personal data and public trust are all involved.
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UAE AMBASSADOR YOUSEF AL OTAIBA: US AND UAE FORGE GROUNDBREAKING HIGH-TECH PARTNERSHIP BASED ON AI
UAE leaders meet to outline a plan that would bring Agentic AI into core government decision-making and operations. (Dubai Media Office)
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What agentic AI means for the UAE government
Agentic AI refers to systems that can analyze information, make decisions and take action with minimal human input. In this model, AI can process requests, adjust workflows and improve outcomes in real time. It can also carry out certain government tasks from start to finish, instead of only suggesting what a person should do next.
So, how would that show up in everyday ways? Think faster permit approvals, automated public services or systems that respond instantly to changes in demand. Instead of waiting for human bottlenecks, processes move continuously.
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According to the announcement, AI will act more like an operational partner than a tool. That marks a change in how governments think about technology.
How the UAE plans to roll out AI across government
There is also a clear structure behind the rollout. The UAE has put a detailed plan in place with clear expectations from the start. Every ministry and government entity will be evaluated based on how quickly it adopts AI, how well it implements those systems and how effectively it redesigns workflows around them.
Oversight will come from Mansour bin Zayed Al Nahyan, a senior government leader who plays a key role in the country’s executive decision-making. Day-to-day execution will be led by a task force chaired by Mohammad Al Gergawi, a longtime cabinet minister focused on government modernization.
How AI will change government jobs in the UAE
One of the biggest parts of this plan has less to do with machines and more to do with people. Every federal employee will receive AI training. The goal is to build a workforce that can work alongside intelligent systems rather than compete with them.
That matters because large-scale automation often raises concerns about job loss. The UAE is taking a different angle by focusing on reskilling and adaptation. If it works, it could become a model that other countries try to follow. If it struggles, it will highlight how difficult workforce transformation can be at scale.
Why the UAE is moving so fast on AI in government
This move fits into a broader strategy. The UAE has spent years positioning itself as a tech-forward economy. By embedding AI into government operations, the country hopes to improve efficiency, reduce delays and deliver faster services to residents and businesses.
It also sends a signal globally. The UAE wants to set the benchmark for how governments use AI in a big way. That puts pressure on other countries, including the United States, to rethink how quickly we adopt similar technologies.
The UAE plans to use agentic AI to help analyze information, make decisions and carry out tasks across a wide range of government services. (Kurt “CyberGuy” Knutsson)
Concerns about AI in government are already growing
For all the excitement, this kind of rollout raises real concerns. Critics point to accountability as one of the biggest questions. When AI systems start making decisions inside government, it can become harder to understand who is responsible when something goes wrong. Was it the system, the developer or the agency using it?
JOBS THAT ARE MOST AT RISK FROM AI, ACCORDING TO MICROSOFT
Privacy is another sticking point. Government systems already handle sensitive personal data. Expanding AI across those systems could increase how much data is collected, analyzed and stored, which makes some experts uneasy.
There is also the issue of bias. AI models learn from data, and if that data has gaps or flaws, the outcomes can reflect that. In a government setting, that could affect access to services, approvals or enforcement decisions in ways that are not always obvious.
Then there is trust. Even if the systems work as intended, people may still hesitate to accept decisions made by machines, especially when those decisions affect their daily lives.
Supporters argue that these risks can be managed with strong oversight and transparency. Still, critics say the speed of this rollout leaves little room for error, and that is where the debate is likely to intensify.
What this means to you
Even if you do not live in the UAE, this push has real implications. First, it raises expectations. When one government proves it can deliver faster services with AI, people elsewhere will start asking why theirs cannot.
Second, it accelerates the global AI race. Governments will need to balance speed with privacy, security and oversight. Third, it highlights a growing reality. AI is moving into decision-making roles beyond basic support functions. That changes how systems are built and how accountability works.
You may start to see similar experiments here in the United States, especially at the state or city level, where innovation can happen faster.
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Kurt’s key takeaways
The UAE is betting big on a future in which AI plays a central role in how its government operates. The timeline is aggressive, and the scope is hard to ignore. What stands out most is how quickly this is moving from concept to execution. At the same time, the questions are just as big as the opportunity. Who is accountable when AI makes a decision? How much data is being used behind the scenes? And how much trust are people willing to place in systems they cannot fully see? This could become a model that other governments try to follow. It could also expose real challenges around transparency and control. Either way, it is a clear signal that AI is moving deeper into systems that affect our everyday lives.
The initiative is set to expand AI across multiple agencies, with a focus on faster services, improved efficiency and real-time operations. (Kurt “CyberGuy” Knutsson)
If AI can start making real-time decisions inside government systems, how comfortable are you with that level of automation showing up in your everyday life? Let us know by writing to us at Cyberguy.com
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