The conflict in Iran has had profound effects on global energy markets, especially after Tehran’s effective closure of the vital Strait of Hormuz, which led to a record rise in oil and gas prices and redrawing the global energy map, emphasizing the need to diversify energy sources and promote renewable energy.
Analysts believe that this crisis represents an opportunity to restructure global energy policies, as the shift towards a diversified mix of energy sources and clean energy is considered an urgent economic and strategic necessity.
However, this transformation faces many challenges. While the crisis highlights the importance of the energy sector and the need to increase investments in it, at the same time it imposes inflationary pressures that may push central banks to keep interest rates high, which hinders the expansion plans of companies operating in this sector.
Unexpected consequences
In this context, a report by the Financial Times indicates that:
The Iran war will have many “unexpected” consequences that US President Donald Trump will not like.
One of them is likely to be accelerating the global transition to low-carbon energy.
The conflict sent oil and gas prices skyrocketing, as Iran effectively closed the Strait of Hormuz.
According to the report, Iran has now proven that control of the Strait “gives it a stranglehold on the global economy… Even if Tehran decides at some point that it has an interest in reopening the Strait of Hormuz, it will always want to retain the option of closing it again as a clear threat to deter aggressors.”
Therefore, “overreliance on imported oil and gas poses a chronic risk of severe and unexpected economic shocks… The Iranian crisis has shed light on this problem, and on how clean energy can contribute to addressing it, which prompted governments around the world to focus on it,” according to the report.
For his part, South Korean President Lee Jae-myung said during a cabinet meeting as the war escalated: “I believe we should seize this opportunity to shift to renewable energy more quickly and on a large scale.”
On Friday last week, economic ministers from Southeast Asian countries agreed at a meeting of the Association of Southeast Asian Nations (ASEAN) to “accelerate the transition to renewable energy” in order to “enhance regional energy security and resilience.”
Kenyan Foreign Minister Musalia Mudavadi also made the same appeal to African countries on the same day, saying: “Let us reimagine the future. If Africa relied on clean energy, would the Middle East crisis have the same devastating impact?”
