Greenhouse gas emissions from burning fossil fuels are on track to fall this year due to the massive disruption of global oil and gas supplies brought on by the continuing conflict in the Strait of Hormuz, UK-based Carbon Brief reported Sept. 16.

Emissions will fall 0.5% in 2026, Carbon Brief analysis concludes.

Fossil fuels contribute about two-thirds to three-quarters of the carbon dioxide and other emissions that have triggered a spiralling global climate emergency.

Carbon Brief bases its estimates on the latest International Energy Agency projections of the impact of the “ongoing global energy crisis” on oil, gas, and coal consumption, the analysis states.

“The U.S.-Iran war has severely disrupted trade through the Strait of Hormuz, causing a spike in oil and gas prices that continues to ripple around the global economy,” writes Carbon Brief deputy editor and senior policy editor, Dr. Simon Evans. “Each month of disruption—and each new flashpoint, such as in Yemen—is increasing the incentive to switch to alternatives.”

One of those alternatives is coal, Evans says. “Yet Carbon Brief’s analysis shows the rise in emissions associated with this increased coal use, much of which is unrelated to Hormuz, is set to be more than offset by declines for oil and gas.”

Those same disruptions have brought high oil and gas prices that are prompting energy-consuming countries, particularly outside North America, to speed up their adoption of renewable energy options that will cost them less than fossil fuels, deploy faster and more reliably—and along the way, produce further emission reductions.

Oil Hits a ‘Turning Point’

In a separate analysis last week, the London, UK-based E3G think tank concluded that global oil markets are reaching a “turning point”, and that exporting countries aren’t ready for the impacts on their revenues.

“Energy markets are already being reshaped by changing demand, geopolitical conflict, and supply disruptions,” E3G wrote in a capsule summary of the report. “The major risks arise from the disorder in the transition, rather than the rate at which demand declines. The choices importers and financial institutions make now will shape how producers respond—and whether the oil endgame is orderly or destabilizing.”

But ready or not, the disruptions are coming. In the last couple of days, oil prices in China hit record highs after Houthi rebels successfully shut down a key pipeline in Saudi Arabia, the Financial Times reports. By then, Chinese state-owned fossil Sinopec, the largest oil refiner in the world, had already predicted the country’s oil demand will fall by 3.9% this year, or 600,000 barrels per day, the third year in a row when oil has declined, Reuters reports.

“Oil demand destruction, or a long-term drop in consumption, at the world’s largest oil importer has been a key factor in capping China’s crude imports and global oil prices, despite severe disruption in supplies via the Strait of Hormuz due to the Iran war,” Reuters writes.

The U.S. Energy Information Administration (EIA) is predicting an oil glut beginning next year, industry newsletter Rigzone reports. In 2026, the EIA data indicate, global consumption of petroleum and other liquid fuels will exceed production by about two million barrels per day. But that will reverse in 2027, with fossil companies producing nearly five million more barrels per day than consumers can use.

With renewable energy, storage, energy efficiency, and heat pumps available as more affordable, reliable alternatives, shifting oil prices can undercut producers both ways. When prices are high, as they’ve been for most of the year due to the American/Israeli war on Iran, the energy-consuming countries that are home to 74% of the world’s population accelerate their shift to energy sources they can control. When prices are down, fossil companies’ profits take a hit. But to whatever extent a consuming country has heeded veteran analyst Michael Liebreich’s advice to “build the asset, don’t burn the commodity”—build renewables, rather than burning fuels—that part of their energy consumption won’t likely return to fossil fuels at any price.

In a LinkedIn post last week, E3G analyst Maria Pastukova said no one can say for sure what will happen when oil demand stops growing and begins to decline “because we have never been there before.” But “the first signs of trouble may appear in sovereign debt and public finances before oil production,” she wrote, as one part of a deeper analysis. “A producer can still be pumping plenty of oil while its borrowing costs rise, its currency weakens, and its fiscal room starts to disappear.”

Gas Glut Delayed, Not Cancelled

In its monthly Market Signals newsletter on LinkedIn, the Institute for Energy Economics and Financial Analysis reports that the disruption of gas supplies in the Middle East has delayed the long-expected oversupply of liquid natural gas (LNG)—but it’s still coming soon.

“Market analysts were expecting the glut to start hitting this year, causing prices to drop materially,” the U.S.-based research shop writes. “However, the Middle East conflict has sharply disrupted LNG flows through the Strait of Hormuz, and IEEFA estimates that it would take well over half a year for flows to return to pre-conflict levels, even if hostilities ended today.”

But supply risk is still building, with more than 220 million tonnes of new liquefaction capacity coming online between 2025 and 2030 while demand weakens across much of Asia. With the International Energy Agency estimating that the war will take a cumulative 140 billion cubic metres of gas out of the market between 2026 and 2030, tight markets may well be profitable for exporters over the short term. But high and volatile gas prices are already weakening demand in key LNG-consuming countries like China, the Philippines, Vietnam, South Korea, and Thailand.

The long-term trend hasn’t stopped companies from signing tentative deals—though not firm and final ones—to buy gas from the proposed Ksi Lisims LNG project in British Columbia and the Kino Aski project in Quebec. And Reuters reported exclusively Thursday that the second phase of the LNG Canada project in B.C. could receive a final investment decision next month.

But that doesn’t necessarily mean there will be demand for new gas supply by the time those projects are approved, built, and ready to go into service.

“In Asia, weaker imports, scaled-back infrastructure, and higher renewables commitments are challenging the demand growth exporters have been counting on,” IEEFA writes. And policy-makers in those countries “are rewriting long-term energy development plans to reduce their exposure to LNG imports.”