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By closing the Strait of Hormuz and attacking oil and gas facilities in Gulf countries, Tehran is driving up hydrocarbon prices. But renewable energy – largely dominated by China – is not immune to the effects of geopolitical tensions either.
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Since the United States and Israel launched attacks on Iran on 28 February, prompting retaliation by Tehran, the price of crude oil has risen by around 13 percent.
Iran has made the Strait of Hormuz a cornerstone of its counter-offensive, blocking maritime traffic along the world’s most vital oil export route.
Around 20 percent of the world’s daily oil consumption passes through the strait, which connects the biggest Gulf oil producers – Saudi Arabia, Iran, Iraq and the United Arab Emirates – with the Gulf of Oman and the Arabian Sea.
The use of oil as a weapon of war is by no means new.
Following the 1973 Arab-Israeli War between Israel and neighbouring Arab countries, the Organization of the Petroleum Exporting Countries (OPEC) imposed an embargo on Israel’s allies. This triggered a sharp rise in oil prices, known as the first oil shock.
“Oil now appears to play an important role in the evolution of international relations, because it sheds a completely new light on the Middle East question,” said Abdelaziz Bouteflika, then foreign minister of OPEC member Algeria.
According to André Giraud, France’s industry minister at the time of the second oil shock – caused by the Islamic Revolution in Iran in 1979 – “oil is a raw material with strong diplomatic and military content”.
Iran also previously blocked the Strait of Hormuz during the Iran-Iraq war in the 1980s, when dozens of ships were sunk in the strait.
In September 2019, the Houthis in Yemen – supported and armed by Iran – also bombed a major Saudi oil installation.
OPEC+ hikes oil production by more than expected following outbreak of Iran war
‘Peaceful’ energy
“For Iran, the Strait of Hormuz is a strategic issue,” says Olivier Appert, an adviser at the Energy-Climate Centre of the French Institute of International Relations (IFRI). “It may be the weapon of the weak against the strong. It is not unprecedented, but it is still worrying.”
In response to Israeli-American bombings, Iran has struck Saudi Arabia’s largest refinery as well as gas facilities in Qatar, pushing up the price of liquefied natural gas (LNG).
While there’s a pattern to targeting fossil energy infrastructure, renewables appear more sheltered from geopolitical tensions. Green energies such as solar and wind power have a more peaceful image. Once installed, solar panels are largely protected from geopolitical upheaval and sudden price spikes.
“Renewable energy is the guarantor of peace in the 21st century” wrote UN Secretary-General Antonio Guterres in an op-ed published in Le Monde after Russia’s full-scale invasion of Ukraine in February 2022.
Mideast war exposes fragile oil, gas dependency
Yet renewables are not immune to conflict – albeit of the commercial variety.
China holds many of the rare earth elements whose magnetic, optical and catalytic properties make key clean‑energy technologies more efficient and compact.
“The players are not the same, but as early as 2011 China decided to control rare earth exports to Japan,” Appert says. “China is very clearly using its monopolistic capacity to impose its views. Unfortunately, renewable energies also respond to highly significant geopolitical challenges.”
So could this latest surge in oil prices accelerate the energy transition?
In 1973, during the first oil shock, then French president Georges Pompidou said: “Let us save petrol, save electricity, save heating and my God, we will manage, I hope, to overcome the difficulties.”
France had no oil at that time, but it did have ideas, and went on to launch a vast programme of nuclear power stations to produce low-carbon energy.
Fifty years later, Appert says the context is different, but the current crisis “justifies the need to reduce dependence on fossil fuels”.
He warns, however, that “we must be careful not to fall back into dependence on China” – a far less visible and less spectacular conflict but an energy war nonetheless.
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This article was adapted from the original version in French by Florent Guignard.
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