After the Energy Shock

The 2026 energy shock triggered by conflict in the Middle East is accelerating the global transition toward electrification as countries prioritize energy security over environmental goals. While short-term fixes rely on fossil fuel reserves, the long-term trend favors renewables and efficiency to reduce import dependence.

Key Takeaways

• 1.The Iran war has created an unprecedented energy shock, severely disrupting LNG and oil flows through the Strait of Hormuz, disproportionately affecting Asia.
• 2.Energy transition is shifting from an environmental objective to a core strategy for energy security and economic competitiveness.
• 3.Clean energy technologies like solar, batteries, and EVs are now significantly cheaper and more scalable than in previous energy crises (1970s or 2022).

Table of Contents

• Introduction
• Energy shock
• Short term impact – more fossil fuels?
• Longer term – energy security through energy transition
• Removing the risk, rather than just hedging it
• Experience from other energy shocks
• Case study: South African reaction to energy black outs
• Infrastructure and policy - ready for energy transition
• Potential headwinds
• Impacts for investors
• Strong performance from companies linked to the energy transition

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