Energy Dependence and the War in Iran

As we approach two-months into the conflict in Iran, there are already significant impacts on global energy. With prices surging, countries are forced to rethink how they produce, procure, and regulate energy. The conflict has severely impacted flows through the Strait of Hormuz, triggering a large supply disruption in the oil market. Additionally, based on projections and energy infrastructure losses it is unlikely that oil prices will return to pre-war levels for months[1].

Energy Security is Now a Top Priority

For years, energy policy has focused on affordability and decarbonization. Now, many countries in Asia and Europe that rely heavily on imported oil are reassessing their exposure to supply disruptions. The recent shock has underscored the risks of dependence on a single, geopolitically unstable region[2]. As a result, countries are beginning to expand their investments in domestic production.

Higher energy prices have also led to increased transportation, food, and manufacturing costs. Recent data indicates that rising fuel prices are driving up costs across essential goods and services. At the same time, there are disruptions to petrochemical supply chains which are critical for fertilizers and plastics[3].

Impact on the Clean Energy Transition

The war is greatly impacting the clean energy transition. On one hand, the crisis highlights the risks of relying on fossil fuels concentrated in unstable regions. This in turn strengthens the case for renewables, nuclear power, and electrification as tools of energy independence. On the other hand, supply chain disruptions and high costs are slowing clean energy deployment.

While the ceasefire status changes day-to-day, countries need to ensure energy security, affordability, and sustainability remain a consideration in long-term policy and peace-keeping goals.

[1] Even if the war in Iran ends soon, the oil market will take months to recover (Trovall, 2026).

[2] Asian countries most at risk from oil and gas supply disruptions in Strait of Hormuz (Zero Carbon Analytics, 2026).

[3] Soaring gas prices and supply chain disruptions drive up costs across the economy (PBS, 2026).