Global energy transition and geopolitical market volatility

Global energy markets are facing a dual challenge involving the transition to renewable energy and volatility caused by geopolitical instability. An Ipsos survey of 23,000 adults across 31 countries indicates that while there is massive support for renewable energy due to climate change concerns, public anxiety regarding energy costs and grid stability has reached record levels. Approximately 76% of respondents expressed concern over increasing prices, with 49% reporting they have reduced other essential expenditures to pay energy bills.

These cost concerns are linked to geopolitical tensions in the Middle East, specifically military actions involving the United States, Israel, and Iran, which have threatened the Strait of Hormuz. Such instabilities contribute to ‘fossilflation,’ where rising oil and gas costs drive higher inflation.

In contrast to these inflationary pressures, the transition to renewables has shown potential for price mitigation. In the EU, solar and wind energy contributed to a 24.2% decrease in wholesale electricity prices between 2023 and 2025, suggesting that renewables may reduce structural dependence on concentrated global fossil fuel supplies.