As tensions in the Middle East escalate, energy experts say countries that generate a larger share of power from wind, solar and other renewables are better insulated from global fuel shocks. Attacks on infrastructure or a closure of the Strait of Hormuz — the route that carries about 20% of the world’s oil and gas — could disrupt supplies, push up prices and worsen cost-of-living pressures.
The global economy remains heavily dependent on fossil fuels, which supply roughly 80% of primary energy. That reliance makes countries vulnerable to geopolitical events that tighten supply and drive price spikes. Renewable generation isn’t a perfect shield — manufacturing of turbines, panels and batteries depends on global supply chains and critical minerals that can be affected by trade disputes — but electricity from wind, sun and local hydro uses no imported fuel once assets are in place.
Rana Adib, executive secretary of REN21, sums it up: when countries install the technology, their ongoing “fuel” is local — the sun, the wind, or local heat — which reduces exposure to global fossil-fuel market shocks and enhances resilience.
Uruguay offers a practical example. After the 2008 financial crisis the country prioritized energy independence and rapidly built wind farms alongside hydro and solar. Today more than 90% of Uruguay’s electricity is from renewables, and in especially favorable years that has reached about 98%. The transition helped stabilize domestic energy costs during past international crises, limited exposure to price spikes after the war in Ukraine, created roughly 50,000 jobs, and is estimated to save about $500 million a year in imported fuel costs. Uruguay’s experience shows a near-100% renewable electricity system is achievable without massive storage deployments, although transport, industry and heating in the country remain largely fossil-fuel based and will take decades to fully electrify.
Denmark demonstrates the benefits of long-term planning. After the oil shocks of the 1970s it invested steadily in renewables and energy efficiency. Today more than 80% of Danish electricity comes from green sources, with wind supplying nearly 60% of generation. Denmark has halved greenhouse gas emissions since 1990 and aims for a fossil-free electricity system by 2030. Extensive district heating networks have helped phase out coal in many homes and are moving toward renewable biomethane.
Analysts point to clear economic advantages from higher renewable shares. An IMF study cited by experts finds that, on average, each 1 percentage point increase in renewables’ share of power generation reduces wholesale electricity prices by about 0.6%. That price-suppressing effect grows when gas prices spike, making renewables a stronger hedge in volatile markets. However, consumers gain full protection only when services such as transport and heating are electrified — electric vehicles and heat pumps are needed to convert cheaper renewable electricity into lower costs at the pump and for home heating. Until transport and heavy industry shift away from oil and gas, households remain partly exposed to fuel-price swings.
Accelerating the transition faces practical barriers. Although renewables are often cheaper than fossil fuels on a generation-cost basis, scaling up requires large investments and system changes: grid upgrades, more storage, electrification of heating and transport, and industrial decarbonization. Oil and gas still benefit from substantial subsidies, and critical mineral and manufacturing supply chains can be disrupted. Still, once renewable assets are installed the “fuel” is free and locally generated, offering long-term insulation from international market shocks.
The current geopolitical crisis has pushed energy security back up political agendas, creating an opening for policies that marry affordability with resilience. Boosting domestic renewable electricity reduces emissions and weakens the economic impact of oil and gas price spikes — but achieving that resilience requires policy commitment, investment in grids and storage, and programs to electrify transport and heating over the coming decades.