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The war in Iran is exposing the world\u2019s reliance on fragile fossil fuel routes, lending urgency to calls for hastening the shift to renewable energy.<\/p>\n
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Fighting has all but halted oil exports<\/a> through the Strait of Hormuz<\/a>, the narrow waterway that carries about a fifth of the world\u2019s oil and liquefied natural gas, or LNG. The disruption has jolted energy markets, pushing up prices<\/a> and straining import-dependent economies.<\/p>\n Asia, where most of the oil was headed, has been hit hardest<\/a>, but the disruptions also are a strain for Europe, where policymakers are looking for ways to cut energy demand, and for Africa<\/a>, which is bracing for rising fuel costs and inflation.<\/p>\n Unlike during previous oil shocks, renewable power is now competitive with fossil fuels in many places. More than 90 per cent of new renewable power projects worldwide in 2024 were cheaper than fossil-fuel<\/a> alternatives, according to the International Renewable Energy Agency.<\/p>\n Oil is used in many industries beyond generating electricity, such as fertiliser and plastics production. So most countries are feeling the impact<\/a>, while those with more renewable power are more insulated since renewables rely on domestic resources like sun and wind, not imported fuels.<\/p>\n \u201cThese crises regularly occur,\u201d says James Bowen of the Australia-based consultancy, ReMap Research. \u201cThey are a feature, not a bug, of a fossil fuel-based energy system.\u201d<\/p>\n China and India built renewable buffers, but China’s is larger<\/p>\n China and India, the world\u2019s two most populous countries, face the same challenge of generating enough electricity to power growth for over a billion people. Both have expanded renewable energy, but China<\/a> did so on a far larger scale despite its continued reliance on coal-fired power.<\/p>\n Today China leads the world in renewables<\/a>. About one in 10 cars in China are electric, found the International Energy Agency. It’s still the world\u2019s largest importer of crude oil and the biggest buyer of Iranian oil. But electrifying parts of its economy with renewables has reduced its reliance on imports.<\/p>\n Without that shift, China would be \u201cfar more vulnerable to supply and price shocks\u201d, says Lauri Myllyvirta of the Centre for Research on Energy and Clean Air. China also can rely on reserves built when prices were low and shift between using coal and oil as fuel in factories, he says.<\/p>\n India<\/a> also has expanded its use of clean energy, especially solar power, but more slowly and with less government support for manufacturing renewable energy equipment and connecting solar to its power grid.<\/p>\n After Russia\u2019s invasion of Ukraine<\/a> in 2022, India prioritised energy security by buying discounted Russian oil and boosting coal production. It also ramped up solar and wind, helping to cushion supply disruptions but not avoid them entirely, says Duttatreya Das of the think tank Ember.<\/p>\n \u201cEveryone cannot be China,” Das says.<\/p>\n India is now facing a shortage of cooking gas. That’s driving a rush to buy induction cooktops and raising fears of restaurant shutdowns. Fertilisers and ceramics industries may also be hit.<\/p>\n Rich countries fall back on fossil fuels<\/p>\n The energy shock is familiar to wealthy countries in Europe and East Asia.<\/p>\n In 2022, some European governments tried to cut dependence on fossil fuels. But many soon focused on finding new fossil fuel suppliers instead, says Pauline Heinrichs, who studies climate and energy at King\u2019s College London.<\/p>\n Germany<\/a> rushed to build LNG terminals to replace Russian gas with mostly American fuel while the energy transition, including efforts to cut demand, slowed, she says.<\/p>\n Europe\u2019s excess spending on fossil fuels since the Russia-Ukraine War amounted to about 40 per cent of the investment needed to transition its power system to clean energy<\/a>, according to a 2023 study.<\/p>\n \u201cIn Europe, we learned the wrong lesson,\u201d Heinrichs says.<\/p>\n In import-dependent Japan, policy responses to past shocks have focused on diversifying fossil fuel imports rather than investing in domestic renewables, says Ayumi Fukakusa of Friends of the Earth Japan.<\/p>\n Solar and wind make up just 11 per cent of Japan’s energy production, on a par with India but behind China’s 18 per cent, according to Ember. Japan’s energy use is much lower than both nations.<\/p>\n The Iran war led the agenda during Japanese Prime Minister Sanae Takaichi’<\/a>s meeting this week with US President Donald Trump<\/a>. Trump, who has long urged Japan to buy more American LNG, recently called on allied nations like Japan to \u201cstep up\u201d in assisting secure the Strait of Hormuz.<\/p>\n South Korean President Lee Jae-myung said the crisis could be \u201ca good opportunity\u201d to shift faster to renewable energy.<\/p>\n Poor countries are the most exposed<\/p>\n Poorer nations in Asia and Africa are competing with wealthy European and Asian countries and big buyers like India and China for limited gas supplies, pushing up prices.<\/p>\n Import-dependent economies \u2013 such as Benin and Zambia in Africa and Bangladesh and Thailand in Asia \u2013 could face some of the biggest shocks. Costly fuel makes transport and food more expensive, and many countries have limited foreign-exchange reserves, restricting their ability to pay for imports if prices stay high.<\/p>\n Africa may be especially exposed because many countries rely on imported oil to run their transport and supply chains.<\/p>\n It makes strategic sense for African countries to build their long-term energy security by investing in cleaner energy, says Kennedy Mbeva, a research associate at the Centre for the Study of Existential Risk at the University of Cambridge.<\/p>\n But not all are opting for renewables: South Africa is considering building an LNG import terminal and new gas-fired power plants.<\/p>\n Others, like Ethiopia<\/a> which banned gasoline and diesel fuelled cars in 2024 to promote electric vehicles<\/a>, are doubling down on renewables.<\/p>\n The real challenge is not just to withstand the next shock, but to ensure it doesn’t \u201cderail the country\u2019s development trajectory,\u201d says Hanan Hassen, an analyst at Ethiopia\u2019s government-linked think tank, the Institute of Foreign Affairs.<\/p>\n Renewables provide a cushion for some<\/p>\n Increased use of renewable energy has helped shield some Asian countries from the energy shock.<\/p>\n