As the Middle East conflict sends fuel costs skyrocketing and threatens to put a dent in the global economy, the argument for reducing the world’s dependence on oil and gas and moving towards renewables has grown louder.
Ships have been blocked – and in some cases burning – at the Strait of Hormuz, a narrow passage near Iran through which a fifth of the world’s oil and gas passes. The key supply route has been effectively closed, stopping oil, gas and other essential exports from the Gulf region and sending commodities on a rollercoaster ride.
Skyrocketing oil and gas prices are leaving many countries rationing fuel and staring at rising food prices. The International Energy Agency is calling it the largest supply disruption in the history of the global oil market.
With no sign the conflict will end imminently, bodies including the UN have called for the world to reduce its dependence on oil and gas, with renewables cited as the most obvious alternative. “The resources of the clean energy era cannot be blockaded or weaponised,” UN secretary-general António Guterres said last week.
The European Union’s energy commissioner Dan Jørgensen has announced a €75 billion clean energy investment strategy, calling for the EU to take its energy future into its own hands. In India, which along with the rest of South Asia is particularly reliant on Middle East energy imports, prime minister Narendra Modi has described the crisis as a lesson for the world’s most populous nation on the need to be self-reliant.
But experts are divided over whether renewable energy can actually offer that off-ramp anytime soon, in a way that reduces dependence on oil and gas disruptions.
The growth of renewable energy in the last few years has been rapid — it now accounts for roughly a third of the world’s electricity generation, and solar power costs have fallen by more than 90 per cent since 2010, making it the cheapest source of new electricity in most countries. But that achievement addresses only one part of an energy system that runs on fossil fuels, as experts say the harder challenges are still ahead.
“Utilising renewables for electrification is a critical first step,” said Chris Wright, principal analyst at Carbon Bridge, “but replacing fossil fuels across the economy — including industry, transport and agriculture — is not feasible in the medium term for any country I am aware of.”
Outside electricity, the global economy still runs on fossil fuels in ways renewables have barely begun to address — gas powers industrial heat, oil moves freight, ships and planes, and across much of the developing world, cooking cylinders still run on petroleum.
Calls to move away from volatile oil and gas supplies also came following Russia’s invasion of Ukraine in 2022, noted Julie Jolly, programme director for oil and gas at Global Energy Monitor.
“The Ukraine war taught us very similar lessons, but it didn’t lead many countries to move away LNG (liquefied natural gas),” she notes.
While renewable electricity has expanded rapidly in the four years since the war began, it hasn’t done so at the expense of dependence on oil and gas in those harder-to-change sectors.
“The fossil fuels problem is really two problems: transportation, and everything else,” said Rosemary Kelanic, director of the Middle East Program at Defence Priorities.
For decades, transport was the sector where oil had no genuine substitute, given its energy density and its suitability for powering vehicles on the move, but price-competitive EVs have changed that calculus, she said.
