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The Energy Transitions Commission warns that crisis-driven responses are exacerbating dependence on fossil fuels, risking locking economies into higher costs and long-term vulnerability. Accelerating clean energy deployment could replace all flows through the Strait of Hormuz within a few years, offering the most enduring path to economic resilience and energy security.
Key Findings
- Fossil fuel systems transmit shocks; clean energy systems absorb them. Fossil systems rely on continuous commodity flows through concentrated chokepoints, with disruptions instantly transmitted via global prices. In contrast, 70–90% of clean energy costs are upfront capital. Solar, wind, batteries, and grids, once built, deliver energy for years regardless of market disruptions.
- If sustained, fossil fuel price increases could raise total annual oil and gas expenditures by $1–2 trillion. This is comparable to the annual $1.5 trillion gap in clean energy investment, with current investment levels at $2 trillion versus the $3.5 trillion needed by 2050 to build a net-zero and more resilient energy system.
- New fossil infrastructure now would lock in the next shock. New oil and gas fields typically take 5–10 years to reach production. Rooftop solar and heat pumps can be scaled in months. Electric vehicles are already structurally reducing oil demand. By 2030, EV deployment alone will replace about 5 million barrels per day, and by 2035, about 9–10 million barrels per day, roughly equivalent to half of pre-crisis Hormuz oil flows. Beyond already surging clean technology demand, a coordinated clean energy response could replace 20% of global oil demand and over 30% of gas demand by 2035, permanently reducing exposure to future shocks.
LondonMay 15, 2026 /PRNewswire/ — The Energy Transitions Commission (ETC) today released Lessons on Energy Security after the Hormuz Crisis, warning that political responses expanding fossil fuel infrastructure could exacerbate the very vulnerabilities that led to the crisis. The report calls on governments to accelerate the clean energy transition as the most effective countermeasure against fossil fuel price volatility, import dependence, and geopolitical disruptions.
The Scale of the Shock
The closure of the Strait of Hormuz caused a disruption of 18.4 million barrels per day of oil supply—the largest supply shock in history, surpassing the 1973 Arab oil embargo—and affected 20% of global LNG trade and one-third of all global fertilizer trade. Emerging economies and import-dependent economies were hit hardest. Approximately 84% of crude oil and over 80% of LNG transiting Hormuz go to Asian markets.
In March, Asian benchmark oil prices rose from about $70/barrel to $90–120/barrel, while LNG prices surged from pre-crisis levels of about $10–12/MMBtu to over $25/MMBtu. Rising oil and gas prices directly impact transportation, food, household energy, and industrial costs, hitting low-income households and small businesses first. The disruption is costing Europe nearly €500 million per day.
Damage to Qatar’s Ras Laffan LNG facility, reducing capacity by 17% with estimated repair times of 3–5 years, shows that disruptions can structurally reshape global LNG markets.
The ETC estimates that if current prices persist, the crisis could add $1–2 trillion to global total fuel expenditures in 2026 alone: not for more energy, but for the same energy at higher cost.
Countries with Clean Energy Are Better Protected
This is the first major fossil fuel shock where scalable alternatives exist in key sources of energy demand. Spain, with 57% renewable electricity, recorded the lowest energy price increases in the EU after the Hormuz incident, at $50/MWh. Singapore, which relied on natural gas for 95% of its power generation in April, saw prices above $200/MWh. The difference lies in system design, not geography.
“The current crisis shows that dependence on fossil fuels is not just a climate risk but an economic and strategic vulnerability. Clean energy systems are more decentralized, more efficient, and less exposed to the price shocks that come from relying on continuously traded fuels.” — Adair Turner, Co-Chair, Energy Transitions Commission
Five Win-Win Government Responses
Although the pace and mix of deployment will vary by country context, a coordinated response across renewables, electrification, green fuels, fertilizers, and efficiency could fully replace oil and gas exports through the Strait of Hormuz by 2035.
“For decades, we have built a wasteful, insecure, and unstable energy system. Three-quarters of the world’s population depends on fuels they cannot control, priced in markets they do not influence, and vulnerable to shocks they cannot prevent. The defining question now is whether governments act to build a more resilient system or maintain one already prone to disruption.” — Jules Kortenhorst, Co-Chair, Energy Transitions Commission
The ETC identifies five actions to reduce the risk of fossil fuel volatility while enhancing energy security.
- Accelerate renewable electricity deployment. Utility-scale and distributed renewables can replace natural gas in power systems, especially when paired with batteries, grids, and flexibility.
- Electrify road transport. EV deployment is one of the largest levers to reduce oil dependence, potentially cutting over $600 billion annually in global oil import expenditures.
- Electrify heating and cooking. Heat pumps and electric cooking can reduce reliance on natural gas and LPG while improving household affordability.
- Scale up green fuels and fertilizers. Cleaner fertilizer production, better nutrient management, and low-emission fuels can reduce exposure in food, shipping, and aviation systems.
- Improve energy efficiency across the economy. Building retrofits, smart energy systems, stronger appliance standards, material efficiency, and operational efficiency can immediately reduce exposure at low cost.
Short-term trade-offs must still be managed. Targeted support for vulnerable households may be needed, and some countries may temporarily increase use of existing coal or LNG infrastructure. But governments should avoid blanket fossil fuel subsidies, new coal capacity, large-scale upstream oil and gas expansion, long-term LNG lock-in, and weakening carbon pricing signals.
Markets Are Already Responding
Consumers and businesses are already moving away from expensive and unreliable fossil fuels. China’s solar exports doubled in March compared to February; solar PV imports hit record highs in 50 countries—India at about +140%, Ethiopia at about +390%. EU electric vehicle registrations rose nearly 50% year-on-year in March. In India, LPG shortages led to a surge in induction stove sales of 3×–30×.
Download Lessons on Energy Security after the Hormuz Crisis.
About the ETC: The Energy Transitions Commission (ETC) is a global coalition of leaders from the energy sector committed to achieving net-zero emissions by mid-century, in line with the Paris climate goal of limiting global warming to below 2°C. This document was prepared by the ETC Secretariat and should not be taken as agreement by every Commission member on every conclusion or recommendation. The Energy Transitions Commission is hosted by SYSTEMIQ Ltd.
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