Global energy crisis from Iran war drives shift to renewables

Thursday 19 March 2026 - 07:00

By: Dakir Madiha

Global energy crisis from Iran war drives shift to renewables

The conflict involving the United States, Israel and Iran has disrupted global energy markets, prompting governments to accelerate efforts to reduce reliance on fossil fuels. After Tehran effectively shut the Strait of Hormuz, around 20 percent of global oil and liquefied natural gas supply has been blocked, triggering what policymakers describe as a decisive moment for renewable energy.

Since late February, when US and Israeli strikes on Iran began, oil prices have risen above $100 per barrel for the first time in four years. Qatar, responsible for roughly one fifth of global LNG trade, declared force majeure on gas exports after Iranian drone strikes hit its facilities. Saudi Arabia halted operations at a major refinery, while Iraq cut output by nearly 1.5 million barrels per day. Maritime traffic through the Strait of Hormuz has stopped entirely.

The disruption has produced immediate global effects. The Philippines introduced four-day workweeks to conserve fuel, Indonesia began seeking alternative crude supplies, and Japan faces the prospect of losing up to two thirds of its oil imports, most of which come from the Middle East. In response, members of the International Energy Agency coordinated the release of 400 million barrels of oil, more than double the emergency reserves used after Russia’s invasion of Ukraine.

At the Green Growth Summit in Brussels in 2026, Simon Stiell, head of the United Nations climate body, said the crisis highlights the risks of fossil fuel dependence. He argued that renewable sources offer greater security because they are not exposed to geopolitical chokepoints or military risks. He also noted that renewables overtook coal as the world’s largest electricity source in 2025, with global investment in clean energy exceeding $2 trillion, twice the level of fossil fuel spending.

Despite growing momentum, structural challenges remain. China dominates global supply chains for solar panels and wind turbines, raising concerns about shifting dependency rather than eliminating it. Many developing countries lack the capital needed to scale up clean energy infrastructure quickly. Natural gas also remains essential for power generation in Europe and Asia, limiting the speed of transition.

Energy analysts point to historical precedents. The oil shocks of the 1970s drove investment in nuclear energy, while Russia’s war in Ukraine accelerated Europe’s expansion of wind and solar capacity. Experts say the current crisis underscores the long-standing failure to diversify away from Middle Eastern oil, a gap now exposed by supply disruptions.