The global push to move away from oil and gas has long been framed as a response to the effects of climate change and the need to take care of the planet. But a widening group of strategists, analysts, and industry participants argue that the transition is being reshaped by a different, more immediate driver: energy security.
The disruption to global energy markets tied to the war in Iran and escalating attacks on infrastructure in the Middle East has sharpened concerns about the vulnerability of fossil fuel supply chains, prompting renewed debate about how countries can reduce reliance on imported hydrocarbons.
“One of the predictions you can make out of what’s happening is that it’s going to turbocharge the energy transition,” Jeff Currie, chief strategy officer of energy pathways at Carlyle, said at CERAWeek by S&P Global, a major energy industry conference, last week.
“The energy transition never had anything to do with climate change … Security was always paramount.”
In the past four weeks, since the US and Israel launched a major barrage of airstrikes against the Iranian regime, the ensuing conflict has engulfed the Middle East and wracked global supply chains in what has become the largest energy disruption on record.
The Strait of Hormuz, the world’s most critical chokepoint for oil shipments, has been effectively closed by threats of violence from the Iranian regime, cutting off roughly 16 million barrels per day of oil from the global market. Futures prices on Brent crude (BZ=F), the international oil pricing benchmark, and US benchmark West Texas Intermediate (WTI) crude (CL=F) have gained more than 40% since the conflict began.
“You import a solar panel or an electric car only once,” Roger Diwan, vice president of financial services at S&P Global Commodity Insights, said at CERAWeek. “You import oil every day.”
That distinction is becoming more salient as governments confront a world in which globalization — and the security guarantees that support a globalized system — appears less certain. Energy supply chains built around open sea lanes and stable trading relationships are increasingly being tested by war, sanctions, and political fragmentation.
Russia’s invasion of Ukraine in 2022 exposed the fragilities of Europe’s energy system after years of deepening dependence on Russian pipeline gas. Before the war, Russia supplied roughly 40% of the European Union’s natural gas, much of it flowing through the Nord Stream pipeline system into Germany.
When flows began to drop — first through political pressure, then through outright disruptions — the shock cascaded across the continent. Power prices surged to record highs, industrial users curtailed production, and governments were forced into emergency measures to secure supply ahead of winter.
A ‘very painful’ energy transition
Currie pointed to historical precedents such as the 1973 oil embargo, when global demand fell sharply because supply was cut off. “It didn’t happen because people wanted it to,” he said. “It was forced on them.”
Today’s shock could have similar consequences, analysts say — not only in the form of short-term demand destruction driven by high prices, but also through longer-term shifts in investment and consumption patterns.
Frederic Lasserre, head of market intelligence at trading firm Gunvor, said sustained price increases could alter consumer behavior in ways that prove difficult to reverse.
“If price remains high for long enough, you change habits,” Lasserre said at CERAWeek. “You decide to go for an EV. That type of demand destruction is less reversible.”
Karim Fawaz, a director in the energy and natural resources group at S&P Global Energy, estimated electric vehicles alone are already reducing global oil demand by roughly 1.3 million barrels per day — a figure that could rise if governments respond to geopolitical shocks with stronger incentives for electrification.
The shift toward energy security is also influencing investment decisions. Pablo Hernandez Schmidt-Tophoff, global head of infrastructure at Lazard, said asset valuations have begun to reflect a renewed emphasis on resilience rather than purely financial returns.
