As the U.S.-Israel war on Iran enters its third week and the Strait of Hormuz remains effectively closed, analysts and energy experts are making a pointed argument: the region most exposed to this crisis is also the region with the most to gain from a decisive pivot to clean energy — and for some Asian nations, that pivot is already paying off.
Asia’s Extraordinary Exposure
The scale of Asia’s vulnerability to the Hormuz closure is staggering. Around 80 percent of Asia’s oil imports pass through the Strait of Hormuz, which has been effectively closed since February 28, with Iran threatening to attack vessels that attempt to transit the route. In 2025, Pakistan, India, and Bangladesh sourced the largest share of their LNG from Qatar and the United Arab Emirates, while Pakistan, Japan, and the Philippines each sourced over 90 percent of their crude oil supplies from the Persian Gulf.
The financial consequences have been swift and severe. Crude oil and liquefied natural gas prices rose 51 percent and 77 percent respectively between February 27 and March 9, 2026. Emerging markets are especially exposed to the wider impacts on inflation, exchange rates, and import costs — and low-income countries are among the most vulnerable everywhere, as many rely heavily on Middle Eastern fertilizers and fuels and have limited buffers to absorb higher import costs.
The Countries Already Benefiting from the Transition
But here is the critical distinction: not every Asian country is equally exposed — and the gap is largely explained by how aggressively each nation has invested in domestic clean energy.
Energy experts say some countries are better positioned to weather this energy crisis than they would have been just a few years ago, because of the rapid growth of renewable energy, battery systems, and electric vehicles. In China, more than half of new car sales are now electric. In Nepal, it is more than 70 percent.
Pakistan — long derided for its energy instability — has emerged as a surprising case study. Because of the unprecedented growth of solar in Pakistan, the country’s electricity sector has more of a cushion in this crisis. Nabiya Imran of the Pakistani think tank Renewables First described the country’s energy transition story as not just a story about climate, but a story about risk management for energy security.
The Economics Now Strongly Favour Renewables
The Iran war has dramatically sharpened the financial argument for the energy transition. Current LNG prices make gas-fired power uncompetitive with firm solar plus storage, even after accounting for inflation-driven increases in capital costs for renewable projects. If LNG prices remain 50 percent above 2025 averages, the cost of gas-fired power could increase by an estimated 32 to 37 percent — while solar power costs are expected to rise by just 3 percent, even after assuming a 100 basis point increase in the cost of capital.
Kingsmill Bond, analyst at energy think tank Ember, framed the shift bluntly: “Once you’ve got your solar panel, there’s no cost for the sun. But once you’ve got your gas-fired power station, you have to pay every day for the gas that you burn in it. With a stroke, this war has dramatically increased the power and influence of those who want to go down the solar route.”
The Voices Calling for Action
The crisis has drawn pointed commentary from global leaders and institutions. UN Secretary-General António Guterres said in a statement: “The turmoil we are witnessing today in the Middle East makes it evident that we are facing a global energy system largely tied to fossil fuels — where supply is concentrated in a few regions and every conflict risks sending shock waves through the global economy. In past oil shocks, countries had little choice but to absorb the pain. Now they have an exit ramp. Homegrown renewable energy has never been cheaper, more accessible, or more scalable. The resources of the clean energy era cannot be blockaded or weaponized.”
The UN’s climate chief, Simon Stiell, was similarly direct, saying the conflict “shows yet again that fossil fuel dependence leaves economies, businesses, markets and people at the mercy of each new conflict or trade policy lurch,” and adding that renewables are now cheaper, safer, and faster to deploy.
Caroline Baxter, director of the Converging Risks Lab at the Council on Strategic Risks, said she “wouldn’t be surprised” if some countries shift to green energy because of the conflict, if only because renewable energy offers more stability than fossil fuels — adding that there is now a real opportunity for countries to turn inward and try to power themselves in a way that cuts off their dependence on other nations.
The Tension: Transition vs. Fragmentation
The picture is not entirely optimistic. The Iran conflict will bring two contradictory impulses to a head — many countries will want to deploy clean energy at home faster, but fragmented supply chains may make it harder and more expensive to do so. A 2023 IMF report found that trade disruption of critical minerals could cut renewables and electric vehicle investment by as much as 30 percent.
Countries like India, whose economies are deeply exposed to Gulf energy supplies, face a particular dilemma: the fastest and most cost-effective path to renewable energy currently involves heavy reliance on China, which dominates global solar technology and supply chains. For nations wary of trading one dependency for another, the path forward is politically and strategically complex.
What It Means for Africa
For African nations — many of which are still deciding between investing in traditional fossil fuel infrastructure or domestic renewables — the stakes of this moment are especially high. Some countries in Latin America and Africa are still at this crossroads, and the growing energy crisis fuelled by the war makes the choice starker than ever. The Iran war has not created the argument for energy sovereignty — but it has made it impossible to dismiss.
