From Chokepoints to Choice: Rethinking Energy Security After Iran

Fire and smoke rise in the Fujairah oil industry zone, in the United Arab Emirates, caused by debris after interception of a drone by air defenses (Via: CFR)

Amid vast, far-reaching security implications, the war in Iran has caused one of the largest oil supply disruptions in decades as Iranian attacks block the Strait of Hormuz. The conflict exposes vulnerabilities in global energy markets, as approximately 20 percent of the world’s oil and natural gas travels through the Strait, a waterway with shipping lanes that measure just two miles wide in each direction.

The shocks have been profoundly felt by global markets. International oil prices jumped by as much as one-third following Iranian attacks on tankers in the strait. U.S. average retail gasoline prices saw prices rise by as much as 30 percent in just two weeks and currently sit at $3.72 per gallon, the highest since 2023. Natural gas prices have spiked by over 75 percent in Europe since the war began. Qatar, which supplies one-fifth of the world’s liquid natural gas (LNG) exports, halted gas production, leading to price spikes in nations reliant on its supply, such as India, South Korea, and Taiwan. Pakistan and Sri Lanka have imposed four-day workweeks to save energy, while Hungary and Croatia have imposed strict price controls on domestic fuels. Qatar claims it may take months to return to normal production levels following Iranian drone attacks on its refineries and terminals. These repeated shocks reveal broader patterns of security liability resulting from an energy system built on geographically concentrated fossil fuels.

This current system’s insecurity can be attributed to structural vulnerabilities, such as the centrality of the Strait of Hormuz. The current shutdown of the strait means that the world’s oil giants, like Saudi Arabia, Iraq, and Kuwait, have suspended shipments equivalent to several days of global demand to global refiners. In response to these attacks, governments have relied on expensive and fragile solutions aimed at restoring security in the Strait for shipping. Trump, for example, has offered naval escorts, relaxed energy sanctions on Russian oil imports, and backing from the U.S. International Development Finance Corporation insurance products to support vessels. However, true safety in these waters may become tenuous due to Iran’s capacity to continue its drone attacks on shipping for months to come, according to U.S. intelligence.

The war has reinforced the importance of energy security with vastly different responses. Asia sources 60 percent of its crude oil from the Middle East. This disruption in energy shipments has prompted immediate responses from many Asian countries scrambling for energy supplies. Fossil fuels, including oil, gas, and coal, still provide 80 percent of the world’s energy. For example, in Thailand and many other Southeast Asian nations, where much of their natural gas comes from Qatar, officials have ordered domestic coal, oil, and gas plants to run at full capacity. Taiwanese officials have begun processes to reopen a closed coal plant. These actions aim to increase local production to account for the shortfall. This demonstrates a radical shift in the global energy landscape.

The multilateral conversation around addressing global warming and the clean energy transition is increasingly complicated by concerns over geopolitical and trade risks. Emerging economies, such as Pakistan and Bangladesh, are being outbid by European nations to access U.S. LNG since the war began. They are increasingly choosing to seek out ‘homegrown’ energy sources of any type, from solar and nuclear to coal.

For decades, energy security has meant controlling supply routes, maintaining strategic reserves, and securing ‘friendly’ trading partners, effectively tying security policy to the stability of authoritarian petrostates and sea lanes. The US Strategic Petroleum Reserve retains 400 million barrels of oil available to domestic refineries. While it provides a 60-day import cover under normal conditions, it does not account for contemporary prolonged conflicts and extreme price volatility. Further, a one-month stop in supply from Qatar and the United Arab Emirates would remove 7 million tons of LNG from the market, which is likely to erase global oversupply.

An alternative best suited to coping with the uncertainty caused by such wars and military access reduces the dependence of nations reliant on energy imports from the Middle East. Investment in renewable energy sources like wind and solar does not require fuel and provides insulation from swings in gas and oil markets, favoring domestic infrastructures and populations. A successful precedent for this security-driven transition occurred after Russia’s invasion of Ukraine in 2022. In response to cuts in gas supplies, Europe expanded its investment in solar power by 25 gigawatts per year, enough electricity to power hundreds of thousands of homes.

In a world where cheap renewable sources are becoming cheaper and more efficient, security should center on resilient domestic systems. These are no longer simply climate-friendly tools, but infrastructure that is difficult to disrupt through drone strikes or trade blockades. The Iran war has exposed the fragility of the oil-based system that is reliant on geographic chokepoints. A new energy system is one that distributes generation across fields, rooftops, and grids—a system in which one drone strike will not jeopardize the entire grid.

The view of fossil fuel as secure and cheap, as in the case of Qatari LNG, has been undermined. Reducing dependence on energy imports represents a vital security strategy. The Iran conflict may very well boost solar power and batteries. The domestic-facing energy strategies in South Korea, Japan, and the EU have reflected this national security imperative. China’s investment in renewables has allowed it to build more wind and solar than the rest of the world combined, showing that even a government that is unyielding to climate change targets prioritizes the security logic of domestic energy supply.

National security policies that advocate for the deployment of renewables, encourage grid resilience, and promote regional interconnection will allow for robust, flexible grids that can absorb shocks amid a transforming global order and conflict environment. Efficiency standards, increased public transit, and wider electrification all directly reduce the amount of fossil fuels that cross conflict zones—using ‘less’ is not only a virtuous goal, but a strategic security strategy.