The Strait of Hormuz and Global Energy Security

The Iranian presence in the Strait of Hormuz has underscored a critical vulnerability in the global energy system: its heavy dependence on a few key maritime routes, many located in politically unstable regions. This narrow passage, along Iran’s coastline, carries approximately a fifth of the world’s oil and gas.

Impacts of Disruption

Effective closure of the Strait has already led to soaring energy prices, fuel shortages, and fears of a global recession. The situation raises a crucial question: would a similar conflict have the same impact in a world powered primarily by renewable energy sources?

Fossil Fuels vs. Clean Energy Supply Chains

A Matter of Dependence

Experts argue a key difference lies in the nature of the supply chains. Fossil fuels require continuous shipments, meaning any disruption immediately halts energy supply. Clean energy, however, relies on the transportation of equipment – solar panels, wind turbines – rather than the energy itself.

“Importing oil is like relying on a drug dealer — you have to keep going back again and again,” said Li Shuo, director of the China climate hub at the Asia Society Policy Institute. “Importing solar panels is more like relying on a car dealer: once you’ve made the purchase, you’re set for the next two decades.”

Fragile Lifelines

The Strait of Hormuz isn’t the only vulnerable point. The Bab el-Mandeb Strait, linking the Suez Canal and Red Sea, transports around 6% of the world’s seaborne oil and has faced instability due to attacks by Houthi militants. The Strait of Malacca, the largest maritime oil transport chokepoint, also experiences high levels of piracy.

Rystad Energy identified five key chokepoints – including the Turkish Straits and the Cape of Good Hope – as “fragile lifelines” of the global energy system. Disruption to any of these poses a significant risk.

The Resilience of Renewable Energy

Domestic Energy Production

Once renewable energy infrastructure is in place – solar farms and wind turbines – the primary requirement is sunlight or wind, resources that are largely domestic. This provides a level of energy independence not possible with fossil fuels.

“An electrified grid is inherently more resilient,” said Antoine Vagneur-Jones, head of trade and supply chains at BloombergNEF. Electric vehicles, heat pumps, and electric stoves would be less susceptible to price spikes and supply disruptions.

New Chokepoints: Critical Minerals

However, clean energy isn’t entirely free of vulnerabilities. The production of solar panels, wind turbines, and batteries relies on critical minerals like cobalt, lithium, graphite, and rare earth elements.

While these minerals are sourced globally, China currently dominates their processing. Over 70% of lithium processing and 80% of cobalt processing occurs in China. China also produces over 90% of the world’s polysilicon, wafers, and photovoltaic cells – essential components for solar panels.

China's Dominance and Potential Disruptions

China has demonstrated its willingness to leverage this dominance, implementing export restrictions on rare earths in response to US tariffs in 2025. While such restrictions wouldn’t cause the same immediate shock as disrupting oil and gas supplies, they could hinder the expansion of renewable energy infrastructure.

“There will be a point where supply will be disrupted,” said Clement Sefa-Nyarko, a lecturer at the African Leadership Centre at King’s College London, “even if you can absorb that, maybe for a year, two years, you can’t go far beyond that.”

Building Resilience and Diversifying Supply

Efforts are underway to build more resilient supply chains for critical materials, including developing domestic manufacturing in countries like the US and India, recycling existing minerals, and exploring alternative technologies like sodium batteries. However, Chinese products currently remain the most cost-effective.

While renewable energy isn’t a perfect solution, the current crisis highlights the fragility of a system reliant on the uninterrupted flow of oil. Experts anticipate increased investment in renewables and electrification in the wake of recent events.