Summary

The US-Israel War With Iran Has Precipitated the Biggest Energy Crisis Since the 1970s But this time, countries are plotting a course away from oil, gas, and coal to renewable energy The US and Israeli war against Iran has triggered a global fossil fuel energy crisis with little precedent in modern history. Iran’s closure of the Strait of Hormuz—the narrow shipping channel through which roughly 20 percent of the world’s crude oil and LNG passes through—and the subsequent US blockade have created a fossil fuel supply crunch that is driving prices up on everything from gasoline and jet fuel to food and fossil fertilizers. The International Energy Agency has called the current war-driven fuel shock “the largest supply disruption in the history of the global oil market.” The crisis comes at a time when renewable energy deployment has been surging and the costs of solar, wind, and batteries have fallen dramatically. That trend brought nearly 60 countries gathered in Santa Marta, Colombia, at the end of April to discuss for the first time how to chart a course away from reliance on oil, gas, and coal. “Clearly the Santa Marta conference is coming at a critical moment,” Natalie Jones, senior policy adviser at the International Institute for Sustainable Development, said during a media briefing ahead of the First Conference on Transitioning Away From Fossil Fuels, which concluded on April 29. A second conference is planned for 2027, hosted by the small Pacific Island nation of Tuvalu. “Governments have the opportunity to accelerate the transition away from fossil fuels and towards clean energy and electrification and greater energy security.” From high-ranking UN officials to climate and clean energy advocates, calls to speed the transition to renewable energy as a matter of security have proliferated amidst the war-driven upheaval of global oil markets. “War in the Middle East has exposed a brutal truth: Fossil fuel dependency rips away countries’ sovereignty and security, putting food prices, household budgets, business bottom lines, and entire economies at the mercy of geopolitical shocks,” UNFCCC executive secretary Simon Stiell wrote in a recent op-ed. “The good news is there is a clear solution to both the climate crisis and the fossil fuel cost crisis: accelerating the shift to clean energy systems.” Renewables on standby According to analysts at the energy think tank Ember, the current war-driven fossil fuel shock, along with the energy crisis stemming from Russia’s invasion of Ukraine in 2022, is reminiscent of the twin oil shocks during the 1970s. The difference this time, they contend, is that renewables are cheaper and more promising than ever before. “For the first time, there are scalable, cost-competitive alternatives. Solar, wind, batteries, EVs, and other electrotech offer a permanent route out of fossil dependence.” Rising renewable energy deployment has already reduced dependence on fossil fuel imports in countries like Spain, Portugal, India, and Pakistan. Since 2010, costs for solar have declined by 87 percent, offshore wind by 55 percent, and battery storage by 93 percent. More than 85 percent of new renewable energy is now cheaper than fossil fuel alternatives. “The current crisis clearly demonstrates the strategic case for renewables as a national security imperative,” said IRENA director-general Francesco La Camera. “Governments must urgently consider targeted interventions to steer investment and emergency responses towards accelerating the deployment of renewable power and the electrification of energy-consuming processes and sectors.” Even IEA director Fatih Birol acknowledges that fossil fuel alternatives are likely to come out on top. He said the world is currently facing the “biggest energy security threat in history” and that the crisis has permanently damaged the fossil fuel industry. “There will be a significant boost to renewables and nuclear power and a further shift towards a more electrified future. And this will cut into the main markets for oil,” Birol told The Guardian. Recent reports from the IEA and Ember show that renewable energy led by solar is outcompeting fossil fuels in supplying new energy. In 2025, for the first time, solar became the largest contributor to growth in global energy supply. In adding more than 600 terawatt-hours of electricity last year, solar PV alone met 75 percent of the increase in global electricity demand. “Clean energy is now scaling fast enough to absorb rising global electricity demand, keeping fossil generation flat before its inevitable decline,” Aditya Lolla, Ember’s managing director, said in a statement. “The momentum we are seeing is no longer just an ambition, it is becoming a structural reality.” War is amplifying an affordability crisis Still, with fossil fuels powering much of the world economy, the war-driven price spikes have deepened an ongoing affordability crisis. An analysis from climate action group 350.org estimates that rising oil and gas prices have cost consumers and businesses over $100 billion during the first month of the war. And even with a temporary ceasefire in effect, 350.org warns that “fossilflation—or inflation caused by volatile and rising prices of oil and gas—is still likely to continue, due to the fragility of the ceasefire arrangement and extensively damaged fossil fuel infrastructure.” Lorne Stockman, research co-director at Oil Change International, told Sierra that fuel prices are likely to stay inflated even after the Strait of Hormuz re-opens. “We’re looking at structurally high oil prices,” he said. “The disruption does not get resolved quickly after the Strait is opened.” The US, as the world’s top oil and gas producer, has so far not seen quite the level of price shocks compared to other regions of the world. “Here in the US, we have secured a position of dominance as far as oil and gas production. That means we’re a little more insulated [to oil price shocks] relative to the rest of the world,” Trey Cowan, an analyst at the Institute for Energy Economics and Financial Analysis, told Sierra. But with US oil and gas exports rising and new production remaining flat since the start of the war , Stockman warns that our relative insulation from severe price spikes “is about to change dramatically.” “I don’t think we’ve actually seen the worst of it yet,” Stockman said. US consumers have already been feeling squeezed by higher prices. A Pew Research Center survey in early April found that higher gas and fuel prices were the top concern among Americans about the war in Iran, with 69 percent reporting feeling “extremely” or “very” concerned. The average gas price in the US is now above $4 a gallon, up more than a dollar since late February when the war began. Overall, Americans are now paying about 35 percent more at the pump, according to a recent analysis from the Center for American Progress (CAP). “The president’s war is costing Americans at the pump in every corner of the country,” said Emily Ghee, senior vice president for economic policy at CAP and lead author of the analysis. “Gas prices are up in all 50 states, and with global oil markets still in turmoil, families are unlikely to see relief anytime soon.” Cascading impacts The war-driven price spikes extend beyond prices at the pump. According to estimates, over 3,000 people have died in Iran, including hundreds of schoolchildren, and over 26,000 have been injured. The United States has reported 13 personnel killed. The economic costs have been severe. A significant chunk of global fertilizer supply comes from the Middle East. And nitrogen fertilizer is typically derived from fossil fuels, so a disruption in fertilizer and oil and gas supplies means that food prices are likely to rise. “Food will become more expensive and will be harder to get,” Holly Bender, chief program officer at the Sierra Club, told Sierra. “Goods and services that move around the world and our country, on planes, on ships, on trucks, all rely on fossil fuels. Those will become harder to find and will become more expensive.” Bender said the war-driven fuel crisis further illustrates the stakes of the battle currently unfolding between two very different visions of the future. “There’s the vision that is rooted in the status quo,” she said, “where fossil fuels power our economy, where the corporations behind them benefit at the expense of our air, our water, our land, the wildlife. And then there’s the alternative vision where we can do all of the things that fossil fuels do with clean electricity powered by the sun, the wind, stored in ever more efficient battery technology, and we will no longer have to rely on fossil fuels. And with that we will have the benefits of clean air, clean water, public lands, things are actually deeply popular in this country.” The Trump administration has embraced the status quo vision, doubling down on fossil fuels while making unprecedented, oftentimes unlawful moves to try to thwart clean energy. These moves include canceling funding for clean energy and electric vehicle charging; attempting to stymie permitting of clean energy projects on federal lands; issuing stop work orders on fully permitted, under construction offshore wind farms—even agreeing to pay developers to abandon offshore wind leases. A recent Climate Power analysis found that 365 clean energy projects have been canceled or stalled since Trump took office at the beginning of last year, contributing to rising utility bills for consumers. The report notes that during this time household electric bills have risen by up to 13 percent nationwide and residential natural gas prices have climbed by 12 percent. “Americans are facing skyrocketing energy costs and fewer jobs thanks to Trump’s war on clean energy,” Representative Sean Casten (IL-06) said in a statement. “With new loads pushing grids to the breaking point, these projects would have added energy supply and kept utility bills down, but instead, Trump and congressional Republicans are taking energy options offline at the worst possible time. On top of that, Americans who are already struggling to make ends meet will be paying the price for Trump’s reckless war in Iran for months to come.” Stockman said that the clean energy transition “has definitely been set back” in the US under the Trump administration’s hostile policies. “But Trump is not destroying the renewable energy industry completely,” he added. “It’s still going to grow.” Bender noted there are many encouraging signs of clean energy advancement. “Renewable energy outperformed gas in the power sector for the month of March. That is huge,” she said. “And more than 90 percent of new energy added to the grid has been renewable energy. That’s globally, but really importantly it’s also happening in the US.” “In 2026, America is getting more power from the sun and wind than ever,” Johanna Neumann, senior director of the campaign for 100 percent renewable energy at Environment America, told Sierra. “Renewable energy is reliable, resilient, and shows up for free every day. And this is happening across most of the country, in red, blue, and purple states.”