The War on Iran Has Made the Green Transition Non-Optional

Fatih Birol, Director of the International Energy Agency in an interview today with the Financial Times warned the "Iran war is the greatest threat to global energy in history"

Twenty million barrels of oil passed through the Strait of Hormuz every day until the end of February. Since the United States and Israel struck Iran on 28 February 2026, that flow has been reduced to a trickle. Brent crude has surged from around $65 per barrel before tensions began to escalate to above $100, and some markets are now pricing towards $120 as the conflict deepens. The International Energy Agency has described this as the largest supply disruption in the history of the global oil market. The case for accelerating the green transition was already well established. The past three weeks have removed any residual excuse for delay.

The scale of the disruption is structural rather than merely cyclical. Iran's effective closure of the strait has knocked roughly a fifth of global oil and natural gas supplies offline. Qatar, the world's second-largest LNG exporter, declared force majeure after Iranian drone strikes hit its Ras Laffan processing hub, removing approximately 20% of global LNG exports from the market almost overnight. Saudi Aramco's Ras Tanura refinery and export terminal has shut. Even if hostilities ceased today, analysts are clear that damaged infrastructure, elevated insurance costs, and disrupted logistics mean that energy markets will absorb this shock for months. Global supplies are running approximately 20 million barrels per day short of demand, against IEA emergency reserve releases that can realistically deliver two to three million barrels per day. The arithmetic leaves a very large gap.

For Europe, and for Ireland in particular, this is not an abstraction. We import the overwhelming majority of our energy. Renewable generation has grown and grid capacity is improving, but our heating, our transport, and significant portions of our industrial base remain fossil-fuel dependent. A 50% rise in the price of a barrel transmits directly into the cost base of every organisation in the country, including those already navigating the emissions reduction and disclosure requirements of the Corporate Sustainability Reporting Directive (CSRD). The two pressures do not offset each other; they compound.

The vulnerability that this conflict has exposed is not a new one, and the argument for addressing it has been available for decades. Fossil fuel systems carry a fragility that risk registers rarely capture accurately: a single maritime chokepoint can remove a fifth of global energy supply within days, and the actors capable of closing it are not reliably deterred by economic consequence alone. It was the 1973 oil embargo, not the 1979 Iranian Revolution as is sometimes suggested, that prompted Japan to begin one of the most sustained energy-efficiency and supply-diversification programmes of the twentieth century. The 1979 crisis reinforced that direction. The question today is whether this crisis produces an equivalent policy response in Europe and whether it does so before the next disruption arrives, rather than after it.

The three arguments for renewable energy (climate obligation, economic opportunity, and energy security) have always co-existed, but they were rarely weighted equally. Climate obligation drove regulatory intervention. Economic opportunity attracted investment where the numbers supported it. Energy security featured in strategy documents but rarely drove capital decisions. The war in the Gulf has recalibrated that balance. Wind turbines and solar installations are not subject to the politics of the Strait of Hormuz. An organisation that has materially reduced its dependence on oil and gas is not immune to global price pressures, but it carries a structurally different risk profile from one that has deferred the transition indefinitely. The investment case that was already sound has become considerably more urgent.

There is one conclusion from this crisis worth resisting. An oil price spike does not, by itself, produce a structural energy transition. It can produce demand destruction, short-term efficiency measures, and a rush to alternative fossil fuel sources that defer rather than resolve the underlying problem. Several analysts have already pointed to growing appetite for US LNG contracts as buyers seek to diversify away from Gulf supply risk. Substituting one concentration risk for another (swapping Gulf LNG for Atlantic LNG under long-term contracts) is a procurement decision, not an energy strategy.

The organisations best placed when this crisis passes will be those that treated energy transition as a commercial and operational priority before geopolitics forced the issue. On-site renewable generation, reduced heating loads, science-based emissions targets: these were already the right decisions on their own terms. They are now also a material hedge against the next conflict, the next chokepoint, and the next price spike that arrives without warning. The Strait of Hormuz will not be the last one.