Will Energy Shocks Reshape the Workweek?
A Signal in a Social Media Post
This morning a social media post from Professor Jiang Xueqin caught my attention. Professor Jiang, a Yale-educated professor from China who now lives in Canada, has built a large audience explaining geopolitics through history. He teaches through and through (and doesn't monetize his content), which creates a level of trust that is increasingly rare online. His commentary connects historical patterns to current events in ways that resonate across generations, which could be why almost a million people follow his analysis on Instagram.
In a recent post he highlighted something keenly simple. Parts of Southeast Asia are exploring a four-day workweek and expanded work-from-home policies. The motivation isn’t culture. It’s energy. Rising oil prices tied to conflict in the Middle East, and disruptions affecting the Strait of Hormuz, are forcing governments to reconsider how energy flows through their economies. This morning via Bloomberg, Energy Secretary Chris Wright, indicated the Iran conflict could last several more weeks.
Together these developments point to a deeper question. What if the next evolution of remote work is driven not by employee preference or corporate culture, but by energy economics?
The Pandemic Work Experiment That Never Fully Reversed
During COVID-19, remote work expanded almost overnight. Companies discovered that large portions of knowledge work could function without being in person. Productivity impressed, record profits were achieved. Collaboration tools improved quickly. Hybrid work became normal.
Then the reversal began. Corporate leaders pushed employees back into offices. JPMorgan CEO Jamie Dimon became one of the most outspoken advocates for return-to-office mandates, arguing that in-person work strengthens mentorship, collaboration, and company culture. Critics offered a different explanation. Commercial real estate (and asset managed portfolios) needed workers back, butts in seats.
Downtown economies rely on office traffic. Transit systems depend on commuters. Restaurants and retail depend on weekday foot traffic. Empty office towers disrupt entire urban ecosystems. Despite these pressures, the workplace never returned to its pre-pandemic structure. Roughly 27% of workdays in the United States are now performed remotely. That means about one out of every five workdays happens outside the office. Hybrid work is no longer a temporary experiment. Not to mention, 16% of all US companies are fully remote. It is a (here to stay) structural equilibrium.
The Energy Variable in the Future of Work
Most conversations about remote work focus on productivity, collaboration, or employee preference. Energy is rarely a part of the discussion. However, if geopolitical conflict pushes oil prices higher, the effects ripple across the entire economy. Transportation costs increase. Electricity costs increase. Heating and cooling costs increase. Office buildings are energy-intensive systems. Lighting, elevators, HVAC systems, security infrastructure, and thousands of computers operate simultaneously every day.
For commercial landlords, energy already represents roughly 5 - 10% of gross revenue (conservatively assuming similar to residential landlord cost, could be higher or lower). In cities like New York, where energy costs are already elevated, those expenses carry even more weight. If energy prices double or triple during a prolonged geopolitical crisis, operating costs should be expected to rise across the board.
Employees experience the same pressure. Higher gas prices increase commuting expenses. Higher electricity costs strain household budgets. With wages relatively stagnant (in relation to pre-Covid household expense levels) and hiring at a crawl, workers have to absorb these rising costs simply to maintain employment. This creates a question corporate leaders may soon have to be for real about. If energy becomes more expensive across the economy, does it still make sense to require employees to commute to the office every day?
Pressure on Commercial Real Estate
Commercial real estate markets in the U.S. are already navigating a “fluid” recovery from the pandemic. Many office buildings remain partially occupied. Leasing markets in major cities remain uncertain. Some properties are exploring conversions into residential or mixed-use spaces (albeit this transition has lagged becuase of other issues, e.g. skilled labor). Now introduce sustained energy inflation (yes, inflation) into the mix. The equation becomes difficult: higher operating costs combined with lower occupancy and uncertain leasing demand.
At the same time another structural force is most definitely reshaping corporate strategy. Artificial intelligence is changing how companies think about hiring and productivity. Many organizations have admitted slowing hiring while exploring AI-driven efficiencies. Others are restructuring teams as automation absorbs routine tasks.
If fewer employees are required to produce the same output, and those employees can work remotely, companies will eventually ask a straightforward question: how much office space do we actually need (maybe even assess energy costs per headcount)?
AI Enters the Chat (Per Usual)
The irony entering the chat is none other than AI. At the same time companies are pushing employees back into offices, artificial intelligence is dramatically increasing global energy demand. Training and operating large AI systems requires enormous computing power. Data centers consume vast amounts of electricity. Entire regions of the United States are now debating how to expand power generation to support AI infrastructure.
The digital economy is increasing demand for electricity while geopolitical tensions threaten the stability of (cheap) energy supply. That dynamic introduces a resource allocation question I don't think workplace strategists have yet considered.
Where should energy go?
Toward millions of daily commutes and office buildings?
Or toward digital infrastructure that powers the next generation of economic growth?
Workplace strategy rarely intersects with energy policy (at least not in my experience). That separation could be old news.
When External Systems Redesign Work
The pandemic revealed how quickly workplace norms can change when external systems shift. One public health crisis reshaped global work patterns in a matter of weeks.
Energy shocks could create a similar shift.
If oil prices remain elevated due to prolonged conflict in the Middle East, companies may quietly revisit policies they only recently enforced. Return-to-office mandates were framed as cultural decisions. Under a different economic environment they begin to look like infrastructure decisions. Infrastructure decisions change when systems apply pressure. Energy is one of those systems.
Questions for Executive Rountables
Could remote work become part of national energy management strategy rather than simply a corporate flexibility policy?
Will CEOs reconsider return-to-office mandates if commuting costs place sustained financial pressure on employees?
Could rising energy prices accelerate the long-term decline of already pressed business districts?
As artificial intelligence continues expanding energy demand, how will governments as well as companies decide where electricity should be allocated?
The pandemic forced companies to rethink how work happens. Energy shocks may force them to rethink where work happens…again.
Sources:
https://www.instagram.com/predictivehistory_/
https://www.nbcnews.com/world/asia/asia-already-making-big-changes-oil-prices-iran-war-rcna263105
https://www.flowlu.com/blog/productivity/remote-work-statistics/
https://www.jchs.harvard.edu/blog/energy-cost-burdens-in-rental-housing
