Don't Run Back To Coal Again, Says Energy Body In Hormuz Crisis Report

As the world grapples with the largest oil supply shock in history from the closure of the Strait of Hormuz, a new report warns that rushing back to coal or expanding fossil infrastructure would be a costly mistake. Instead, accelerating the shift to renewables and electrification offers the fastest, cheapest route to genuine energy security.

The Energy Transitions Commission (ETC) released Lessons on Energy Security after the Hormuz Crisis today, arguing that the disruption, which halted 18.4 million barrels per day of oil, 20 per cent of global LNG, and a third of traded fertilisers, has exposed the deep vulnerabilities baked into the old energy system. Yet it also highlights a silver lining: scalable clean technologies now exist to absorb such shocks rather than amplify them.

Fossil Fuels Transmit Shocks, Clean Energy Absorbs Them

Fossil fuel systems rely on continuous flows through narrow chokepoints like Hormuz, instantly transmitting global price spikes. In contrast, 70–90 per cent of the cost of solar, wind, and batteries is paid up front. Once installed, they generate energy for decades with minimal exposure to volatile commodity markets.

“Clean energy systems are more distributed, more efficient, and less exposed to the price shocks created by continuous dependence on traded fuels,” said Adair Turner, Co-Chair of the ETC.

Asian markets have borne the brunt, with 84 per cent of the disrupted crude and over 80 per cent of LNG headed for the region. Benchmark oil prices jumped from around $70 to $90–120 per barrel, while LNG soared above $25/MMBtu. The crisis is already triggering physical shortages of diesel, jet fuel, and LPG in countries including India, Pakistan, Sri Lanka, Bangladesh, and the Philippines.

India's Vulnerabilities In Sharp Focus

India's strategic petroleum reserves cover just around 10 days of demand, far below levels needed for a sustained disruption. While aggregate numbers can look reassuring, product-specific gaps are biting hard, especially in LPG for cooking and diesel for transport and agriculture.

Price spikes are quickly eroding purchasing power among lower-income households. Previous shocks have led to fuel shortages, power outages, and heavy fiscal strain from subsidies, patterns already re-emerging. Dependence on imported fuels leaves millions vulnerable to events far beyond national control.

Yet India is responding with urgency. Authorities are fast-tracking clearances for wind power and battery storage projects amid gas supply worries. Online platforms report induction cooktop sales surging 3x to 30x in cities facing LPG shortages, with quick-commerce stocks running dry as households shift to electric cooking.

Market Already Voting With Its Feet

Even without fresh policy pushes, the private sector is accelerating the transition. Chinese solar PV exports in March doubled from February, and hit a 49 per cent jump over the previous record. Battery storage exports rose 44% month-on-month. Fifty countries saw record solar PV imports, with dramatic surges in Hormuz-exposed nations: India (+141 per cent year-on-year), Ethiopia (+391 per cent), and Kenya (+207 per cent).

Globally, EV registrations in the EU rose nearly 50 per cent year-on-year in March. The ETC projects that EV deployment alone could displace around 5 million barrels per day of oil by 2030 and 9-10 mb/d by 2035, roughly half of pre-crisis Hormuz flows.

A $1-2 Trillion Warning, And A Better Path

If elevated prices persist through 2026, the world could face an extra $1-2 trillion in gross fuel expenditure for the same amount of energy. That figure rivals the entire annual clean energy investment gap needed to reach net zero.

The report stresses that new coal plants would take years to come online and lock in future vulnerabilities, while renewables and storage can be deployed far faster and at lower cost. Countries with high renewable shares, such as Spain (57 per cent renewable electricity), saw far smaller price spikes than gas-heavy systems like Singapore's.

Jules Kortenhorst, ETC Co-Chair, put it bluntly: “For decades, we have built an energy system that is wasteful, insecure, and volatile. Three-quarters of the world's population depends on fuels they do not control… The defining question now is whether governments act to build a more resilient system.”

Five Win-Win Moves For Governments

The ETC outlines practical steps that simultaneously cut emissions, strengthen security, and improve affordability:

• Accelerate renewables paired with batteries and grid flexibility to displace gas in power.
• Electrify road transport, the single biggest lever against oil dependence, potentially saving over $600 billion yearly in imports.
• Electrify heating and cooking with heat pumps and induction stoves.
• Scale green fuels and fertilisers to protect food and transport systems.
• Improve energy efficiency across buildings, industry, and equipment, the quickest, lowest-cost wins.
• Targeted support for vulnerable households remains essential in the short term, but the report cautions against blanket fossil subsidies, new coal builds, or long-term LNG lock-ins that would repeat today's mistakes.

Turning Crisis Into Opportunity

The Hormuz shock may reshape global energy markets for years, with damage to Qatar's Ras Laffan LNG facility alone expected to take 3–5 years to repair. Yet the ETC sees a chance to break the cycle.

A coordinated clean energy push could displace the equivalent of all Hormuz flows within years and cut global oil demand by 20 per cent and gas by over 30 per cent by 2035, delivering permanent resilience.

As households switch to induction cooktops in Indian cities and solar imports surge across vulnerable nations, the market is already moving. The question is whether governments will match that momentum, or risk locking in the next crisis.