BRUSSELS: The energy shock triggered by the Iran war is forcing governments worldwide to rethink their long-term dependence on fossil fuels, accelerating plans to expand nuclear power, renewables, and diversified supply chains.
Iran’s closure of the critical Strait of Hormuz following U.S. and Israeli strikes on February 28 has effectively disrupted nearly 20% of global oil and LNG flows, marking one of the most severe energy supply crises in modern history. According to the International Energy Agency, this could represent the largest disruption to global energy markets to date, with crude prices already surging past $100 per barrel.
This is the third major energy shock of the decade, following the COVID-19 pandemic and Russia’s invasion of Ukraine each exposing the fragility of global energy systems built on concentrated supply routes.
“The issue of energy security has never been as acute as now. Until recently, markets took Gulf resources for granted. That will not be the case going forward,” Geoffrey Pyatt, former U.S. Assistant Secretary of State for Energy Resources and now a senior executive at McLarty Associates, told WorldAffairs.
In response, major economies are rapidly recalibrating. Europe has announced fresh financial guarantees to revive nuclear energy, reversing decades of policy that saw reactors phased out. European Commission President Ursula von der Leyen acknowledged that reducing nuclear capacity over the past 25 years “was a strategic mistake,” as the continent faces soaring energy costs, already up by €6 billion since the crisis began.
China, the world’s largest energy consumer, is accelerating its transition toward renewables while expanding emergency reserves and diversifying supply sources. A policy note from a key state planning body emphasized the urgency of reducing reliance on vulnerable trade routes. Already, China appears relatively insulated due to its vast reserves and high electrification levels, with electric vehicles accounting for over half of new car sales and renewables supplying more than 50% of its power.
Across Asia, the shock is even more pronounced. Countries heavily dependent on Middle Eastern imports such as Japan, Taiwan, Pakistan, and Bangladesh are now scrambling to diversify suppliers and increase spot LNG purchases. Taiwan is reconsidering nuclear power, including the potential restart of recently shut reactors, while Japan faces renewed political pressure to revive its nuclear fleet.
In the short term, governments have coordinated record releases from strategic reserves and urged energy conservation, particularly across Asia. Meanwhile, China has cut refinery output and restricted fuel exports to protect domestic supply.
The United States, with its strong domestic production, is relatively shielded from supply disruptions but remains focused on stabilizing global prices. The Trump administration has eased sanctions on Russia to boost global supply, a move that could reshape existing geopolitical alignments. Analysts suggest that the crisis may also prompt a reassessment of Western restrictions on Russian LNG, especially as Europe and Asia face tightening supplies.
At the same time, the crisis is reigniting debate over the future of energy transition. While many policymakers see this as a moment to accelerate the shift toward clean energy, others argue it underscores the need for increased fossil fuel production to ensure stability.
What is clear is that the Iran war has become a decisive turning point. It is not only disrupting supply chains but also reshaping how nations think about energy security pushing the world toward a more diversified, resilient, and potentially less fossil fuel-dependent future.
-Angeliki Abnett
