Across multiple countries and most regions of the world, a largely consistent response to the global energy shock is quickly taking shape, with businesses, consumers, and governments doing everything they can to speed up the shift off fossil fuels.
Before the first American/Israeli strikes on Iran Feb. 28, an avalanche of analysis showed that renewable energy, battery storage, and energy efficiency were already less expensive, quicker to deploy, and more reliable than fossil fuels. Clean energy was surging compared to fossil fuels, while oil and gas faced a looming supply glut that threatened the business case for new infrastructure.
Now the oil and gas glut is on hold, with the loss of 11 to 12 million barrels per day of oil transiting the Strait of Hormuz and serious damage to Middle East gas fields and oil refineries. But with energy security added to the mix, interest in clean energy is finding renewed momentum, and analysts expect many of the changes in supply chains and habits will be permanent—just as they’ve been in past energy shocks dating back to the 1970s.
Responding to the biggest energy supply disruption in history, consumers are “embracing low-carbon technologies that promise to lower gas and power bills,” Bloomberg News reports. “For many, the conflicts in Iran and Ukraine have driven home a harsh reality: the only path to energy security is going electric.”
“We are in the middle of the second energy shock in the 2020s,” Ember energy strategist Kingsmill Bond told the news agency, after Russian dictator Vladimir Putin’s invasion of Ukraine in 2022. “It will flow into people’s decisions on what energy-hungry devices they buy.”
The shift is by no means unanimous—some countries in Asia are accepting a short-term return to dirty fuels like coal, with India preparing for a searing-hot summer by pushing its existing coal plants to maximum capacity. Japan is responding to the crisis by doubling down on its position as a re-exporter of liquefied natural gas (LNG) that it imports from multiple sources.
But the Financial Times cites a swath of less wealthy, import-dependent countries, from Bangladesh and the Philippines to Thailand and Zambia, that are already turning to rationing to cut fuel demand. While a wealthy city-state like Singapore “should be able to buy its way out of a crisis using the spot market” for oil and gas purchases, “countries such as Morocco rely heavily on imports but are unlikely to have the financial muscle to compete for limited supplies.”
Overall, “middle-income and developing economies have been hit first and worst because of the higher energy intensity of their economies. In Asia in particular, they also lack domestic oil and gas production and have relied heavily on supplies from the Middle East.”
A Powerful Impetus
That means the Iran war “will put a powerful impetus behind green alternatives just as policies meant to spur decarbonizing technologies are on the retreat,” Bloomberg writes.
“The main driver will not be climate change, the main driver will be energy security,” International Energy Agency Executive Director Fatih Birol told media last month.
Those considerations have a number of countries either announcing or speeding up plans to deploy clean energy.
• As the world’s first electrostate, China stands to benefit the most from a faster shift to renewables, the Washington Post reports, “producing the vast majority of the world’s solar panels, wind turbines, batteries, and electric vehicles. Exports of these technologies were already climbing to new heights in the first two months of 2026. Now volatility in the supply of fossil fuels is set to give sales another big boost.”
Since the war began, the Post says, Chinese electric vehicle giant BYD has increased its exports and overseas sales by 65%, while battery maker CATL has seen its share prices rise 29.5% in Hong Kong and 13.6% in Shenzhen. Recently, China had been over-supplied with solar panels, batteries, and EVs. “Rising overseas demand could now absorb much of this production,” the Post writes, “though in parts of the world, particularly in the West, dealmaking could be impeded by national security concerns.”
Lauri Myllyvirta, co-founder of the Centre for Research on Energy and Clean Air, says those exports were already up 44% in January and February, to $41 billion—equivalent to one-third of China’s record trade surplus. “Increases took place across the board, except for North America, with Europe and Asia the biggest growth markets,” he writes on LinkedIn. “EV and battery exports were the main drivers of growth in value as solar prices continued to fall. Also significant growth in wind and power grid technologies, although from a lower base.”
Meanwhile, China has responded to the LNG price spike by cutting imports to their lowest level since 2018. “The potential drop in deliveries to the world’s biggest buyer points to another year of soft demand,” Bloomberg reports.
Morgan Solar Executive Chairman Mike Andrade says China is gaining now because it foresaw a faster energy transition. “Those of us who have worked with China saw it coming,” he writes on LinkedIn. “We have tried to warn Western governments about the risks and opportunities this presents. Unfortunately, Canada’s fossil fuel-government industrial complex is still not ready to listen.”
A ‘Rapid, Unanticipated Transition’
• In Pakistan, a “perfect storm” of market forces was already producing “one of the most rapid and unanticipated transitions to clean energy, driven largely by homes and businesses installing rooftop solar panels,” the World Resources Institute reported last fall. “In just a few years, the country’s electric grid transformed from negligible solar power to an expected 20% of all its electricity coming from solar by 2026.” The shift began when LNG prices “surged to record highs after Russia’s full-scale invasion of Ukraine in 2022,” the Guardian writes, repeatedly leaving millions of people without electricity amid an intense heatwave, record prices, and power cuts.
Fast forward to today, and “the Strait of Hormuz is a fossil fuel tinderbox, but Pakistan is busy winning the real war,” Gurin Energy CEO Assaad Razzouk writes on LinkedIn. “50 GW of solar imported so far by the people—not the bureaucrats. That’s $120 billion in fuel costs saved over the panels’ life,” amounting to “energy independence from the bottom up: By spending $7.4 billion on solar, Pakistanis have created a 25-year wealth generator on their own soil.”
• In Vietnam, the Vingroup industrial conglomerate has sought permission to replace a 4.8-gigawatt liquefied natural gas plant, the country’s biggest, with renewable energy, Reuters reported exclusively March 31. The news landed just a couple of weeks after equipment manufacturer GE Vernova announced it had been contracted to supply gas turbines and generators for the LNG plant.
“In addition to cost factors, dependence on imported fuel also poses considerable challenges to energy security, supply autonomy, and Vietnam’s ability to control electricity generation costs,” Vingroup said. On April 1, analysts at Wood Mackenzie reported that the “supply-demand crisis” had driven up gas turbine prices by 195%.
• Indonesia President Prabowo Subianto pledged to increase his country’s solar+storage capacity from 11 to 100 GW in just two years. “This is a wake-up call,” he said. “We will convert all motorcycles into electric motorcycles. All cars, all trucks, all tractors must (also) be electric.”
Until now, the Institute for Energy Economics and Financial Analysis (IEEFA) says, Indonesia’s use of diesel for remote electrification “has locked the country into a cycle of expensive imports, volatile fuel prices, and heavy subsidies,” while “exposing it to global oil market fluctuations and supply risks.” Solar+battery storage would translate into annual savings of $1.5 to $2 billion on energy subsidies and another $2 billion on avoided fuel imports.
• South Korea, the world’s third-biggest importer of liquefied natural gas (LNG), was downplaying the risk after attacks on a major Qatari gas field cut off about 14% of its supply, Reuters reported. The country was working on replacement supplies, but also considering measures ranging from driving restrictions to shorter showers. Gas Outlook says the country has comfortable levels of gas storage, but is also accelerating an already ambitious plan to install 100 new gigawatts of renewable energy capacity by 2030.
Vulnerable Countries Respond
• Countries in Africa import most of their energy, making them vulnerable to supply disruptions and surging prices, Reuters reports. Fuel prices were up last week in Ghana, Tanzania, Malawi, and Mauritania, with Mauritania raising the minimum wage to help cushion the impact and South Africa reducing its fuel levy for this month.
In Nigeria, more households and businesses are fed up with outages and rising prices and have been switching to solar, writes Climate Home News, with installations surging since the war. “There’s too much work,” said solar retailer Samuel Okechukwu. “I’m even having to outsource some services to keep up with the work rate.” Ethiopia has been accelerating electric vehicle adoption by expanding its charging network.
• Renewable energy development is moving swiftly across the 74 member nations of the Climate Vulnerable Forum (CVF)—home to more than one-fifth of the world’s population, including three-quarters of the people living on less than one megawatt-hour of electricity per capita, while accounting for just 5% of the world’s GDP and electricity demand and a tiny fraction of its climate pollution.
“The conventional fossil-based development model has failed to reach them at scale,” Ember analysts Daan Walter, Sam Butler-Sloss, Antoine Isaac, and Kingsmill Bond write on The Electrotech Revolution. “For countries with limited state capacity and high borrowing costs, this lumpy, centralized, capital-intensive fossil path has always been a tall order.”
But now, “falling electrotech costs create a new path to reach the billion people left behind by fossils,” with adoption rising fast across much of the CVF. With solar now requiring less up-front capital than fossil fuels, and off-grid solar+storage serving better than grid extensions for communities beyond a few dozen kilometres, electrotech “reduces dependence on imported fossil fuels” for countries that mostly haven’t locked in to large-scale fossil infrastructure.
