Hormuz Crisis shows Clean Energy is Key to Reducing Fossil Fuel Dependence - Energy Transitions Commission
Photo - Strait of Hormuz (Source)
The Energy Transitions Commission warns crisis-driven responses that reinforce fossil fuel dependence risk locking economies into higher costs and long-term vulnerability. Accelerating clean energy deployment can displace the equivalent of all Hormuz flows over the next few years and is the most durable route to economic resilience and energy security.
The Energy Transitions Commission today published Lessons on Energy Security after the Hormuz Crisis, warning the political reflex to expand fossil fuel infrastructure risks reinforcing the same vulnerabilities that caused this crisis. The report calls on governments to accelerate the clean energy transition as the most effective response to fossil fuel price volatility, import dependence and geopolitical disruption.
The scale of the shock
The Hormuz closure has disrupted 18.4 million barrels per day of oil — the largest supply shock on record, exceeding the 1973 Arab oil embargo — alongside 20% of global LNG trade and one-third of all globally traded fertilisers. The effects are most acute in emerging and import-dependent economies. Around 84% of crude oil and more than 80% of LNG transiting Hormuz is destined for Asian markets.
Asian benchmark oil prices rose from around USD 70/bbl to USD 90-120/bbl in March, while LNG prices rose from around USD 10-12/MMBtu before the crisis to above USD 25/MMBtu. Higher oil and gas prices feed directly into transport, food, household energy and industrial costs, hitting lower-income households and small businesses first. The disruption is costing Europe almost €500mil per day.
Damage to Qatar's Ras Laffan LNG facility, with capacity down 17% and repairs estimated at 3–5 years, indicate that disruption may structurally reshape global LNG markets.
ETC estimates the crisis could add USD 1–2trn in additional gross fuel expenditure to the global economy in 2026 alone, if current prices are sustained: not for more energy, but for the same energy at higher cost.
Countries with clean power are better protected
This is the first major fossil fuel shock in which scalable alternatives exist across the main sources of energy demand. Spain, with 57% renewable electricity, recorded the EU's lowest energy price increases post-Hormuz, with prices at $50/MWh. Singapore, with 95% gas-dependent power generation, faced prices above USD 200/MWh in April. The difference is system design, not geography.
"The current crisis shows that fossil fuel dependence is not only a climate risk but also an economic and strategic vulnerability. Clean energy systems are more distributed, more efficient and less exposed to the price shocks created by continuous dependence on traded fuels." Adair Turner, Co-Chair, Energy Transitions Commission.
