Half a year into the war between the United States, Israel and Iran, the consequences for global energy markets are no longer a matter of projection. The Strait of Hormuz, the narrow shipping lane between the Persian Gulf and the Gulf of Oman, has been effectively closed. Roughly a fifth of the world's oil and liquefied natural gas shipments normally pass through it. They are not passing through it now. The disruption is forcing governments across Europe and Asia to treat renewable energy investment less as a long-term ambition and more as an immediate necessity.
A chokepoint that shaped the modern energy order
The Strait of Hormuz is roughly 33 kilometres wide at its narrowest point, with shipping lanes that pass close to the Iranian coast. For decades, it has been the single most important artery in the global oil trade. Tankers carrying crude from Saudi Arabia, the United Arab Emirates, Kuwait, Iraq and Iran itself all transit the strait. So do LNG carriers loaded at Qatar's vast export terminals, which supply gas to countries from Japan to the United Kingdom. The International Energy Agency has long identified Hormuz as the world's most critical energy chokepoint. Previous crises, including the Iran-Iraq war of the 1980s and various flare-ups involving Iran and Western navies, caused brief disruptions and insurance spikes but never a sustained closure. This time is different.
The current war, which began in early 2026, has made the strait functionally impassable for commercial shipping. Insurance rates have become prohibitive, several major shipping companies have rerouted or suspended sailings, and the risk of military engagement in the Gulf remains constant. The effective closure means that crude and LNG volumes equivalent to roughly 20 per cent of global supply are either stranded, forced onto much longer routes, or simply not being produced at previous levels. For energy-importing nations, the arithmetic is brutal.
Europe's scramble for alternatives
The Hormuz closure changes the calculation again. The EU still imports significant volumes of LNG from Qatar and other Gulf producers. Those shipments have either stopped or become far more expensive, arriving via longer routes if they arrive at all. Natural gas prices in Europe, which had stabilised after the acute crisis of 2022 and 2023, have risen sharply. Industrial consumers in Germany and Italy are reporting margin pressure. Governments that might have been content to let the energy transition proceed at its existing pace are now under political and economic pressure to accelerate.
The EU has pledged to increase funding for renewables, though the specifics of how much additional money, through which instruments, and on what timetable remain subject to the usual Brussels negotiations. The European Commission has signalled that the current crisis justifies faster permitting and more coordinated procurement. Whether member states will follow through with the necessary grid investments and planning reforms is an open question.
Asia's import dependence exposed
If Europe is vulnerable, parts of Asia are more vulnerable still. South Korea imports virtually all of its oil and gas. Japan is in a similar position. Thailand, the Philippines and other Southeast Asian economies rely heavily on Middle Eastern crude. The Hormuz closure hits them directly and, in many cases, with fewer alternative supply options than European countries possess.
South Korea and Thailand are among the governments that have pledged to increase renewable energy funding in response to the crisis. South Korea had already been expanding its renewable generation capacity, but its energy mix remains dominated by fossil fuel imports. The country has limited land for large-scale solar and wind, and its nuclear fleet, while substantial, takes years to expand. Thailand has more solar potential but has been slow to build out grid infrastructure and regulatory frameworks that would allow distributed generation to scale.
The broader pattern across Asia is one of governments that previously treated the energy transition as important but not urgent, now confronting a supply shock that makes urgency unavoidable. Countries with access to domestic coal, such as India and Indonesia, face a different set of trade-offs: ramping up coal use to fill the gap, which undermines climate commitments, or pushing harder into renewables and accepting short-term economic pain.
What crisis-driven acceleration actually looks like
There is a well-established pattern in energy policy: supply crises concentrate minds. The 1973 oil embargo prompted decades of investment in energy efficiency, nuclear power and alternative fuel sources in the West. The 2022 Russia shock drove European countries to build LNG import terminals in months rather than years and to accelerate heat pump deployment. Each crisis produces a burst of activity, some of which sticks and some of which fades when prices come down.
The difference this time is scale. The Hormuz disruption affects not just gas but oil, and not just Europe but Asia simultaneously. The combined import dependence of the affected regions means that demand for renewable energy equipment, grid components and storage systems will surge in multiple markets at once. Supply chains for solar panels, wind turbines, batteries and the critical minerals that go into them are already tight. A sudden increase in orders from governments with newly enlarged budgets will test whether manufacturing capacity can expand fast enough to meet it.
There is also the question of whether the funding pledges translate into installed capacity. Announcing money is not the same as building projects. Permitting, land acquisition, grid connection and local opposition all remain constraints. In many European countries, the average time from permit application to operational wind farm is still measured in years. Unless governments are willing to override those processes, the money will sit in budgets while fossil fuel imports remain expensive or unavailable.
The geopolitics of the new energy race
One consequence of the Hormuz closure that has received less attention is how it reshapes the geopolitics of energy supply. Europe's effort to reduce dependence on Russian gas was partly an effort to reduce reliance on a single supplier whose interests were hostile. The Hormuz crisis reveals a different vulnerability: dependence on a single shipping route that can be closed by military action. Diversifying away from Russian pipeline gas towards Qatari LNG did not solve the concentration problem; it moved it from one chokepoint to another.
Renewable energy, by contrast, is generated domestically. Wind and solar resources are distributed across countries, and once the infrastructure is built, the fuel is free and not subject to blockade. This is the strategic case for acceleration that is now being made in capitals from Brussels to Seoul. It is not only about emissions targets or industrial policy. It is about ensuring that the lights stay on and the factories keep running when a critical shipping lane becomes a war zone.
The limits of crisis as catalyst
Crisis can accelerate investment, but it can also distort it. Governments under pressure tend to favour speed over cost-effectiveness. The risk is that money flows into whatever can be built fastest, which often means solar panels imported from China, rather than into the slower, more complex work of grid reinforcement, demand-side management and industrial transformation. Europe's experience after 2022 is instructive: LNG terminals were built quickly, but the deeper structural changes to energy markets, including long-term power purchase agreements, carbon pricing reform and building retrofits, have proceeded more slowly.
There is also the question of what happens to the oil and gas markets themselves. If the Hormuz closure persists, some Middle Eastern producers will seek alternative export routes, perhaps via pipelines that bypass the strait, such as the East-West pipeline in Saudi Arabia or the Abu Dhabi pipeline, though their capacity is limited compared with tanker shipments. Prices will adjust. Some demand destruction will occur as high prices reduce consumption. The market will partially rebalance, even if the strait never fully reopens. The question for renewable energy policy is whether governments maintain their commitment once the acute phase of the crisis passes and fossil fuels become somewhat cheaper again, even if not as cheap as before.
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