The war with Iran, now in its eighth month, has created a major shock to the world’s energy system. Iran’s blockage of the Strait of Hormuz – a route that moves roughly one‑fifth of global oil and gas – sent barrel prices above $100 and has kept shipping costs high.
Global oil demand declines
In January, the International Energy Agency (IEA) projected a rise of 930,000 barrels per day in 2026. By September, the agency revised its outlook, forecasting a drop of 2.5 million barrels per day because of the “impasse” in U.S.–Iran negotiations. Less oil means lower greenhouse‑gas emissions, with Carbon Brief estimating a 0.5 % decline in 2026 – the first fall since the pandemic‑driven dip in 2020.
Electric‑vehicle market reacts
Higher fuel costs have spurred electric‑vehicle (EV) purchases in many regions. The IEA reported a 4 % increase in global EV sales in the second quarter of 2026, noting the Middle East crisis reinforced the case for EVs as a hedge against energy‑price volatility. Australia, parts of Asia, and Europe have all seen record EV sales, driven by soaring diesel prices – up 38 % since the war began.
In contrast, U.S. EV sales have slumped more than 30 % this year, according to Motor Intelligence, after the Trump administration reduced incentives and effectively barred cheaper Chinese models.
Natural‑gas and coal trends
The conflict also hit natural‑gas markets, with the IEA projecting a 0.5 % shrinkage in global demand for 2026. Some nations are turning to coal, the dirtiest fossil fuel, with global coal demand now expected to rise 1.2 % this year.
Expert perspectives
Samantha Gross, director of the Energy Security and Climate Initiative at the Brookings Institution, warned that while President Trump’s policies encourage fossil‑fuel use, the war could unintentionally accelerate a long‑term decline in oil demand. “If the war lasts for four years, our analysis shows oil demand may never return to 2025 levels,” said DNV’s Sverre Alvik.
Rob Jackson, a climate scientist at Stanford University, called the notion of President Trump becoming an accidental climate president “ridiculous,” noting the administration’s rollback of green‑energy programs has set the United States back decades.
What lies ahead
Analysts caution that the shift toward clean energy may be temporary. The IEA still projects a recovery in oil demand for 2027, and some countries have increased coal use to fill the gap. Nonetheless, the war has underscored the vulnerability of fossil‑fuel supply chains and may influence future energy‑security policies.
Original reporting: KEYT (Ventura/Santa Barbara) — read the source article.
