Two weeks into Iran's blockade of the Strait of Hormuz, oil prices have surged above $100 a barrel and natural gas costs have risen, accelerating adoption of renewable energy and electric vehicles, analysts say. Asia, the primary recipient of fuels through the strait, faces acute vulnerability.
Following the initial halt of nearly all traffic through the Strait of Hormuz—through which one-fifth of global oil and seaborne natural gas passes—Iran has struck oil and gas fields with drones and missiles amid the ongoing Middle East conflict attributed to attacks by Donald Trump. Oil prices have jumped from about $70 to over $100 a barrel, with natural gas prices up across most regions. Arab nations have rerouted some fuel via pipelines, but elevated prices are projected to cost fossil-fuel importers an extra $240 billion even at $85 per barrel, according to think tank Ember. Maximizing renewables, EVs, and heat pumps could slash that by 70%, Ember estimates. 'The conflict in Iran almost certainly is going to be an accelerant on the energy transition,' said Sam Butler-Sloss at Ember, highlighting abundant global solar and wind potential. Renewables now make up 45% of global energy capacity, with EU solar build-out more than doubling and UK increases by two-thirds since Russia's 2022 Ukraine invasion. Asia bears the brunt, receiving four-fifths of the strait's oil and LNG: Japan and South Korea get 70% of their oil from there, Taiwan a third of its natural gas, and up to half of India's imports. Some Indian restaurants have cut menus due to cooking gas shortages. Butler-Sloss dubbed it 'Asia’s Ukraine moment.' Responses include Seoul fast-tracking wind and solar, and India's Narendra Modi stating on 11 March that solar and EVs will cut foreign fuel reliance. Pavel Molchanov at Raymond James & Associates sees it as a wake-up call for Asian renewables. Short-term, Japan and South Korea are boosting coal and nuclear, but long-term shifts to EVs and renewables are expected, with Michael Liebreich declaring the era of growing gas demand over.
