Global pivot to renewables seen accelerating as Hormuz uncertainty upends energy security
IEA warns that current oil and gas shocks surpass past levels, forcing import-dependent nations to prioritise solar and wind for domestic energy sovereignty
Global efforts to diversify energy sources are set to accelerate as the US-Israel conflict with Iran inflicts an unprecedented disruption on global supplies, analysts said, even as Washington and Tehran reportedly negotiate a reopening of the Strait of Hormuz.
Despite the promised pause in hostilities, the conflict has already dealt a massive blow to international energy security, forcing nations to urgently reassess their reliance on volatile supply chains.
Before US President Donald Trump announced the ceasefire on Tuesday, Tehran reportedly proposed a new fee for all commercial vessels transiting the strait once it reopens – a move that could increase the cost of Middle Eastern crude and further incentivise a shift away from the region.
Following the ceasefire announcement, transit numbers did not immediately surge, according to Wednesday’s data from vessel-tracking platform Myvessel.cn, which showed that six vessels had passed through as of the late afternoon.
Fatih Birol, head of the International Energy Agency, underscored the gravity of the situation in an interview with Le Figaro published on Tuesday, stating that the current oil and gas crisis triggered by the blockade was “more serious than the ones in 1973, 1979 and 2022 together”.
Energy crises have repeatedly exposed the economic and strategic vulnerabilities of the global economy’s dependence on fossil fuels, particularly for oil- and gas-poor economies, said Jayendu Krishna, a director at Drewry Maritime Services.
Following a supply disruption of this magnitude, nations will increasingly prioritise energy localisation to insulate themselves from external shocks and enhance the controllability of their power supplies, according to Lin Boqiang, dean of the China Institute for Studies in Energy Policy at Xiamen University.
“China has already proven that the integration of wind and solar power with energy storage and electric vehicles is a successful path towards greater energy self-reliance,” Lin said.