Energy security trumps climate as fossil fuels surge

The policy response to disruption has been to secure supply first, even when that means slowing the transition. FreightWaves describes how “the Biden administration in the first two years” was “attacking… all forms of fossil fuel,” but after “massive inflation and this sort of shock happen in energy,” there was a “change in… a pivot in conversation” toward lowering prices and ensuring energy availability; Radio Davos similarly says shocks are likely in the short term to increase oil and gas use, and in parts of Asia, coal, as policymakers prioritize diversification and reliability.

That security-first logic is even clearer where price spikes threaten basic economic stability, making decarbonization timelines politically harder to defend. Columbia Energy Exchange warns that “a continued closure of the Strait of Hormuz” could mean “2030% increases in the price of imported fertilizer” and “2030 plus percent increases in the price of grain,” while Europe is “currently living through our third energy price shock in four years”; for poorer importers, the pressure is acute enough that Zambia is seeking help “to be less dependent on global fossil fuel markets in the future” because it will otherwise spend 30 times an electrified-mobility strategy’s cost on fuel imports.

The stall works through timing and infrastructure: when supply is threatened, governments and companies back fuels that can arrive fastest, even if they are dirtier. Nick Wagner said that “Presuming that the Middle East, the Strait of Hormuz goes back to normal operation… you have a lot of additional supply… So, we could be in a place in 2 years, 5 years where the world actually has a lot more oil and gas,” and he warned that without “continued policy support around transition readiness,” “the market will likely… continue with lower cost oil and gas,” weakening the cost case for alternatives. Wagner also said, “Currently oil and gas… is at $90 a barrel,” implying “many” projects remain commercially attractive if policy does not keep pushing the transition.

The same logic slows cleaner substitutes when they are harder to scale or politically easier to displace than incumbent supply. François Paquet noted that “most of our energy consumption still relies on molecules… with electricity representing only 23% of our final energy consumption,” while a tariff study using “roughly 165 million day-ahead market bidding records from 2015 through 2024” showed that because “Hydro-Quebec’s generation portfolio is approximately 99 percent renewable” and Ontario is also low-carbon while New York is gas-heavy, tariffs above “roughly 55 percent” can price out cleaner imports and shift dispatch back to fossil generation.

This is no longer behaving like a contained regional outage because it is showing up simultaneously in consumer prices, shipping bills, and policy planning. In analysis on the 2026 shocks, the EU is cited as evidence that governments are revising long-horizon plans in response to repeated volatility, with 2040 electrification targets and a push to get off fossil fuel price swings, which shows the disruption is large enough to alter expectations beyond the immediate battlefield.

The price effects are also measurable across borders and over time, which is what separates a structural shock from a brief local spike. Fuel price increases in the first six months of the Iran conflict are costing U.S. drivers more than the comparable stretch after Ukraine, and the same analysis tracked what 100 gallons of gas cost each week during the first six months of the Iran and Ukraine conflicts, while CREA estimates importers paid an additional $330 billion for seaborne oil, petroleum products, and LNG during the war’s first six months. Trade and inventory behavior in Asia points in the same direction: China’s ability to reduce imports by 5 million barrels a day and its reserve strategy show a major buyer reshaping demand, stockpiling, and regional supply expectations rather than absorbing a temporary shock.

The shock has clarified that fossil-fuel dependence is structural, not just a matter of keeping lights on. At the Center for Strategic & International Studies, one speaker said the Russian invasion “was a reality check and uh wakeup call,” adding that “we kind of become um uh 100% sure that we need fossil fuels” and that “many countries are still dependent on the fossil fuels”; they tied that dependence directly to climate limits, saying “we realize that we are not on track towards the carbon neutrality by 2050” and may reach 2 degrees “but not 1.5.”

That difficulty persists because hydrocarbons sit inside industrial systems and primary energy use, not only electricity generation. David Blackmon’s Energy Additions argued hydrocarbons remain feedstocks for “fertilizers, pharmaceuticals, plastics, and the renewable energy equipment itself,” while a Center for Strategic & International Studies interview used Denmark to puncture the idea of an easy post-carbon model: “75% of the energy in Denmark” still comes from biomass, oil, and natural gas, while “Only 17% of primary energy” is electricity; in the Philippines discussion, one speaker recalled a shift from 75% oil dependence to 52% indigenous and renewable energy only alongside “48% on a combination of poverty.”