Even if the Iran war ends, the next fossil fuel shock is already on its way
To prepare, the world needs to focus on building energy independence through renewables and decentralisation. As hostilities between the United States and Iran reignite, global
To prepare, the world needs to focus on building energy independence through renewables and decentralisation. As hostilities between the United States and Iran reignite, global attention has shifted again to the immediate risks of the conflict. Across the Middle East, families have endured fear, uncertainty and violence. Communities have faced disruption, displacement and the destruction that war brings. Protecting lives must remain the immediate priority. Yet, whatever happens in the coming days and weeks, the broader lesson will remain. The conflict has exposed a structural vulnerability in the global economy: as long as countries depend on fossil fuels, instability anywhere can create economic pain everywhere. It has also highlighted something else: the transition to decentralised renewable energy is increasingly a matter of economic security and resilience. As executive director of Greenpeace International, I regularly speak with colleagues across our global network who have described to me how the impacts of the US-Israel war on Iran are felt worldwide. In East Asia and Southeast Asia, the closure of the Strait of Hormuz has driven up fuel costs, inflation and pressure on household budgets in economies heavily dependent on imported oil and gas. Across Africa and Latin America, rising fuel prices have placed an additional burden on already impoverished communities. In Europe, North America and Australia, higher energy expenditures have affected transport costs, electricity bills and ultimately the price of everyday goods.
This is fossilflation: the inflationary pressure created by an economic system that remains heavily dependent on fossil fuels. The more fossil fuel-dependent an economy is, the more exposed it is to disruptions far beyond its borders. The opposite is also true. Every increase in locally generated renewable energy reduces that exposure by weakening the connection between international crises and household costs, making countries more resilient and energy independent. The Organisation for Economic Co-operation and Development has warned that the Middle East conflict is driving rising inflation and weaker growth, with higher energy prices flowing through to transport, energy bills and consumer prices. It has also reported that governments in at least 46 countries have already introduced emergency measures to shield households and businesses from rising fuel costs. The International Monetary Fund, the World Bank and the World Food Programme (WFP) have warned that higher oil, gas and fertiliser prices are increasing food insecurity. Separately, the WFP has estimated that 45 million people could be pushed into acute hunger. What is often presented as an unfortunate consequence of geopolitics is, in reality, a feature of the fossil fuel system. The industry has become highly effective at exploiting the dynamics of conflict and energy shocks. Time and again, instability and price volatility have generated extraordinary profits for fossil fuel corporations.
The BriefWire