People queue to refuel at a fuel station in Ahmedabad, India, on March 23, 2026, following import disruptions caused by the U.S.-Israel war on Iran. (Photo: CFP)
The U.S.-Israel-Iran conflict has entered its fourth week, with tensions around the Strait of Hormuz—a vital artery for global energy flows—leaving multiple economies exposed to the risk of an energy crisis.
Shahid Hussain, founder and CEO of Green Proposition Consulting Firm, said in a recent interview with South from Dubai that the crisis serves as a stark warning for countries to reduce their reliance on single energy sources and diversify supply routes.
He pointed to China's expanding investment in clean energy as an example of how economies can build greater resilience against future shocks.
A chokepoint with global consequences
At the center of the risk lies the Strait of Hormuz, a narrow waterway that carries roughly one-fifth of the world's oil supply.
"In past crises, disruptions affected less than 10% of global energy flows," Hussain said. "Here, we are talking about 20%. That is a completely different level of risk."
Energy prices have been soaring since the conflict began. Benchmark Brent crude rose above $116 a barrel in early trading on March 30, marking a surge of more than 50% since the U.S.-Israeli war on Iran erupted on February 28.
"The countries most affected are not in the Gulf," he said. "They are in Asia and Europe, which depend heavily on the oil supplies through the Strait of Hormuz."
Signs of strain are already emerging. Hussain pointed to early indications of energy rationing and reduced capacity in parts of Europe and Asia, as governments and businesses begin adjusting to uncertainty.
"When energy is affected, everything is affected," he said.
Rising fuel costs would feed into transportation and manufacturing, while disruptions to fertilizer shipments and logistics could push up food prices. Financial markets, he added, would also face increased volatility.
"If prices move toward $200 a barrel," he said, "you would see inflation, financial instability, and potentially recession."
A crisis reshaping long-term choices
Even if tensions ease, Hussain does not expect a quick return to normal.
In his view, the crisis is accelerating a shift already underway: countries and businesses are reassessing their dependence on single energy sources and supply routes.
"You cannot rely entirely on one source anymore," he said.
He pointed to increased investment in renewable energy, electric vehicles, and, in some cases, renewed interest in nuclear power as countries seek to hedge against future shocks.
"China is a strong example in expanding clean energy," he said. "It is not only about sustainability—it is also about resilience."
In China, the world's largest electricity consumer, one in every three kilowatt-hours comes from green energy, according to the National Energy Administration. The country has led the world in installed wind power capacity for 15 consecutive years, as well as in new energy vehicle production and sales for 11 straight years.
Yet the transition is uneven. Hussain noted that some countries, including Japan, are turning back to traditional energy sources such as coal in the short term, highlighting the tension between immediate needs and long-term transformation.
Ultimately, he argued, the roots of the crisis lie beyond markets.
"The economic impact is global, but the solution has to be political," he said.
Without meaningful dialogue among the parties to the war, he warned, similar disruptions could recur—with even greater consequences.
"All conflicts end through negotiation," he said. "There is no alternative."
Reporter | Liu Xiaodi
Cover Designer | Lai Meiya
