Relative energy stability has defined the past 80 years. Following WWII, countries could confidently assume a steady supply of cheap energy, whether that was from regional neighbours or the Middle East. 

Things are beginning to change. The Ukraine War was the first shock, decreasing the supply of Russian natural gas and oil to Western nations. That shortfall was met through a combination of US shale and increased imports from the Middle East. 

Now, with the Iran War, three-quarters of the world's population living in fossil fuel-importing countries are facing a further struggle. Approximately a fifth of the world’s oil exports are being impacted by closures of the Strait of Hormuz.

Such repeated shocks necessitate a strategic rethink about energy.

Energy price shocks are the new normal

Global energy markets were already under pressure after the invasion of Ukraine. The Iran conflict has made the structural vulnerability of fossil fuel dependency impossible to ignore.

Japan, for example, receives 94% of its oil imports from four Middle Eastern countries (the United Arab Emirates, Saudi Arabia, Kuwait, and Qatar), with most of these imports passing through the Strait of Hormuz.

Finding a replacement for such large volumes of fossil fuels simply isn’t possible. Not when every other nation is facing the same problem. The vulnerabilities in long transport chains, global extraction, and politically sensitive supply routes are now very difficult to ignore.

Can renewable technology solve the problem?

Until recently, shifting to renewable technology seemed like a luxury. Oil and natural gas flowed freely at relatively low prices, and much of the energy infrastructure was built around these inputs. This is no longer the case.

Countries that have already invested in renewables are reaping the rewards. According to Ember, the global electric vehicle fleet avoided oil consumption equivalent to 70% of Iran's total oil exports in 2025, meaning reduced demand is already partly absorbing the supply shock.

Scaling technologies like heat pumps, electric vehicles (EVs), and renewable capacity are practical tools available for reducing fossil fuel dependence, and deployment is accelerating. This shift is already visible in East Asia and Europe, where clean technology industries are developing and the lessons of Ukraine, and now Iran, have sharpened political will. Whether they scale fast enough to maintian social cohesion will depend on policy, investment, and industrial capacity.

Change begins at the organisational level

Organisations were more than happy to rely on readily abundant fossil fuels, confident that stable geopolitical conditions and open global trade routes would keep supply flowing indefinitely.

The response cannot simply be finding alternative suppliers. The more durable solution is reducing dependence on imported energy altogether, which requires treating energy sourcing as a strategic decision rather than a procurement one.

At a leadership level, this requires a shift in thinking. Decisions around energy sourcing, capital allocation, and infrastructure must be made together. Investing in on-site generation, electrification, or long-term energy contracts is not just an environmental choice. It is a way of stabilising costs and protecting operations against external shocks. 

At the functional level, organisations will need:

• Operations teams to reduce dependence on volatile inputs by reworking supply chains, adopting electrified processes, and integrating renewable energy into day-to-day operations.
• Finance and commercial teams to treat energy as a variable risk, adapting pricing, materials, and supply strategies accordingly. 
• Advisors to support implementation in practice, helping organisations design, deploy, and scale new energy systems.

Renewable technology is already price-competitive

There is some good news. Despite the global volatility, electrotechnology, including EVs, heat pumps, and renewables, have become much cheaper and more readily available. Solar panels have halved in price since 2022, battery prices have fallen by 36%, and EVs have hit price parity with combustion cars.

For organisations with the right teams in place, there’s a strong opportunity to reorient energy production, increase profitability, and avoid the next price spike.