The ongoing conflict with Iran, initiated by US President Donald Trump, has yet to achieve its stated war aims but is inadvertently speeding up the global transition away from oil and gas, a shift Trump has historically opposed. The standoff over the Strait of Hormuz has led to soaring energy prices, prompting nearly 40 countries to take emergency measures, according to the International Energy Agency.
While the immediate outlook is bleak, particularly for developing nations facing catastrophic energy and fertiliser costs, the crisis is hastening the inevitable move towards renewable energy. Unlike the 1970s oil shocks, low-cost clean substitutes for fossil fuels are now widely available, with about 45% of crude oil used for road transport, much of which can be electrified cheaply.
Carmakers report a sharp rise in electric vehicle demand; Renault's UK boss described it as a 'seismic shift', with March sales across continental Europe up 51% year-on-year. Governments are also reassessing their reliance on oil and gas, given the vulnerability of supply routes like the Strait of Hormuz.
Analysts draw parallels with the 1997-98 sovereign debt crises, which spurred emerging economies to build foreign currency reserves. Similarly, countries are now likely to invest heavily in solar, wind, battery, and nuclear capacity to enhance energy security. South Korea's president Lee Jae Myung stated, 'South Korea needs to transition to renewable energy quickly. If we rely on fossil energy, the future will be extremely risky.' Vietnam has shelved plans for a liquefied natural gas terminal in favour of renewables, and India is making progress in switching to clean energy at a lower fossil fuel baseline than China.
