Demand Increasing for Green Energy Due to the Current Middle East Conflict
It is a well-documented fact that for the past number of decades, many governments across the globe (except perhaps the US where President Trump has cancelled many green energy initiatives in favour of fossil fuels), have been actively moving away from fossil fuel dependency to alternative energy supplies. Experts suggest that the supply shock from the US/Iran/Israel conflict will be a major catalyst for governments to increase the transition to alternative energy. Analysts reference the response by European governments to the invasion of Ukraine by Russia on 24th February 2022 and the subsequent energy crisis threatening energy security, which made it imperative to focus on building a more diversified domestic energy supply.
Many governments across the globe have been investing for years in wind farms, electric vehicles, battery storage and solar panels with the primary goal of reducing carbon emissions. However, in today’s world, the current Middle East Conflict and the Ukraine/Russia war alongside the subsequent energy supply shocks, have moved geopolitical risk to front and centre for the race to alternative energy supply. Wind and solar resources hold advantages over fossil fuels, for example their resources are domestic and supplies cannot be restricted by war in foreign jurisdictions including geopolitical choke points (e.g., the Strait of Hormuz*).
*The Strait of Hormuz — A narrow waterway at the entrance to and exit from the Persian Gulf — is a linchpin of global energy and freight flows. Traditionally, about 20% to 30% of the world’s total daily petroleum liquids (oil, condensate and products) and circa 20% of global LNG (liquified Natural Gas) are shipped via the Strait. Furthermore, data reveals that around one-third of the world’s seaborne fertilizer trade flows through the Strait, including circa 30% of global urea and circa 20% of global ammonia supplies.
Recent International Energy Agency (IEA) projections show global energy investment reaching $3.4 trillion this year. Of that total, $2.2 trillion will go toward clean energy and grid infrastructure, while $1.2 trillion will fund traditional fossil fuels (oil, gas, and coal). Investment in oil is expected to decline for the third year from 2023 with investment falling below $ 500 billion, whilst LNG investment is expected to rise to $ 330 billion, however this figure may be inaccurate to LNG terminals and fields in Qatar suffering damage as a result of the US/Iran conflict.
Experts conclude that the current Middle East crisis has encouraged policymakers across the globe to shift the emphasis to system flexibility and energy security, which in turn will support increased investment from fossil fuels to alternative energy. In Europe for example, the European Commission on 22nd April this year published Accelerate EU which refers to the need to strengthen energy resilience. In the report, they said that whilst transition to alternative energy is by no means new, it needs to be accelerated allowing the EU (European Union) to rely less and less on imported fossil fuels, thereby shielding economies within the bloc from rising energy costs.
In Southeast Asia, the need for energy transition is more acute as circa 80% of crude oil flowing through the Strait of Hormuz is bound for Asian markets, prompting governments in the area to make energy security a core priority. Facing some of the highest residential electricity rates in Southeast Asia, the Philippines is rapidly turning to solar power. It recently surpassed Pakistan as the second-largest buyer of Chinese solar panels, with imports from China more than doubling between January and May compared to the same period in 2025. Elsewhere, auto dealers throughout the region advised that there had been increased consumer interest in EVs (electric vehicles), with exports from China jumping by 64% to Vietnam, 70% to Thailand, and 95% to the Philippines. Overall, Chinese EV exports were 57% higher in the first three months since the start of the Middle East crisis (March through May 2026) than for the same period in 2025.
The global airline industry announced in June 2026 a near halving of its 2026 profit forecast, placing the blame squarely on the current Middle East crisis for disrupting key air corridors and driving up fuel costs, which due to thin margins in the airline industry has exposed the fragility of the sector. Data reveals that jet fuel costs account for circa 33% of airline costs, and when prices are elevated, it can impact the financial health of a number of carriers. Jet fuel prices have recently stabilised, however the recent failure of the US/Iran ceasefire pact and the subsequent re-engagement of hostilities has led to analysts suggesting that some smaller airlines may not generate enough cash flow during the peak summer months to survive the coming winter.
Rising living costs continue to strain households worldwide, leading a growing number of governments—mostly in private, but some publicly—to condemn President Trump for initiating the war with Iran. Military experts warn that without ground troops or escalated mass bombing (which would cause an unacceptable level of civilian casualties), the conflict will likely become a drawn-out war of attrition. Many lower income households across the world are now struggling with paying their bills as fuel, food and transport prices increase.
A number of analysts have suggested that the world will not see the energy spikes as seen before the ceasefire accord, as OPEC+ and the UAE have vowed to increase oil exports plus the Saudi Arabian pipeline (The Petroline which avoids the Strait of Hormuz and is pumping at full capacity) should hopefully keep prices below the $100 per barrel mark. However, several experts challenge this view. While they agree that Brent crude could average around $85 per barrel by Q4, they warn that escalating hostilities between the US, Iran, and Israel—combined with ongoing disruptions in the Strait of Hormuz—could push prices past $120 per barrel by the fourth quarter.
Today, the Benchmark Brent crude oil price is trading around the $90pbl mark with WTI (West Texan Intermediate) trading at circa $83.70pbl. This marks a notable surge in prices driven by the United States and Israel re-engaging in hostilities with Iran. The world will have to wait and see if oil exceeds $100 a barrel. Still, ongoing Houthi threats against Saudi Arabian crude passing through the Bab al-Mandab Strait, a vital choke point at the southern end of the Red Sea, could easily drive prices past that level.
