Iran war disrupts global energy markets and shifts energy demand

The ongoing conflict involving the United States, Israel, and Iran is significantly disrupting the global energy system. Following the launch of the war in February, the strangling of the Strait of Hormuz—a waterway carrying approximately one-fifth of the world’s oil and gas—triggered a massive oil shock, driving prices above $100 per barrel.

Despite the initial expectation of a short conflict, the war has entered its eighth month. Persistent high shipping costs and attacks by Iran-backed Houthis on Saudi oil facilities and tankers continue to impact the market. This geopolitical instability is highlighting the vulnerability of fossil fuels, potentially accelerating a global shift toward clean energy as countries seek to mitigate the risks of energy insecurity.

Experts suggest that while President Donald Trump has historically pushed for fossil fuel use and criticized clean energy, the prolonged conflict may inadvertently accelerate the phase-down of oil and gas demand globally.