Six months after the outbreak of the Iran war, the world’s major oil companies have reported record profits. Supply disruptions and surging global energy prices following the conflict and the closure of the Strait of Hormuz have delivered a windfall: in the second quarter of 2026, ExxonMobil reported earnings of $14.53 billion, Chevron $12.07 billion, and Shell $10.82 billion, while Saudi Aramco announced a net profit of roughly $32.69 billion. The fossil fuel business is thriving; and while the prospects of reopening the strait and ending the war remain uncertain, there is little sign that this windfall will fade soon.

Simon Stiell, Executive Secretary of the UN Climate Secretariat, argued on 30 April that the war with Iran could “supercharge” the global shift towards renewable energy. His reasoning is straightforward: wind and solar are less vulnerable to geopolitical shocks and economic disruption than fossil fuels, and a crisis of this magnitude should sharpen the appetite for energy sources that no blockade can interrupt. The appeal of renewables is indeed real and rising. But it is worth examining what the war has actually done to the short-term prospects of the green transition and the full picture is far less encouraging.

Since the crisis erupted, countries that depended on Arabian Gulf oil and gas supplies have struggled to secure imports, and many have drawn down their strategic reserves. In much of the world, the cheapest and fastest answer to the shortfall has not been green at all. India, Thailand, and Vietnam, no longer able to rely on liquefied natural gas from the Gulf, are ramping up coal-fired power in its place. Elsewhere, households and industries are turning to wood and charcoal, with serious consequences for public health. Mexico is returning to fracking, European countries are expanding drilling in the North Sea, and Greece has approved offshore exploration for the first time in decades. The emergency response to the loss of Gulf energy has been a retreat to older, less environmentally-friendly alternatives, not a leap towards cleaner ones.

The economics of the moment compound the problem. Renewable energy requires substantial upfront investment, and the war has made capital more expensive precisely when it is most needed. In the second quarter of 2026, global inflation came under renewed upward pressure, driven largely by energy price shocks and supply chain friction tied to the conflict in the Middle East. Forecasts for annual global inflation were revised upward into the 4.4–4.6 percent range, according to Euromonitor, even though end-of-quarter data showed early signs of cooling in headline figures. Higher inflation meant higher interest rates and costlier financing; a direct headwind for capital-intensive wind, solar, and grid projects.

There is one genuinely constructive development. The global energy shock is pushing nations across the Middle East, Asia, and Africa to expand nuclear power generation and accelerate long-dormant atomic energy plans. Nuclear offers the exact kind of supply security the crisis has exposed as lacking. Yet reactors take a decade or more to build, and in the meantime these same countries must still fill today’s oil and gas shortfall with whatever is available now.

The Iran war has produced a paradox. It has made the strategic case for renewable energy more compelling than at any point in recent memory, while simultaneously weakening the practical means of acting on it. Fossil fuel producers are flush with profits; import-dependent economies are reaching for coal, wood, and new drilling; and inflation is raising the cost of the very investments a green transition demands. The real danger is lock-in: coal plants have been revived, wells are being drilled, and fracking has been resumed in the name of crisis response, and they will continue to operate even after the strait reopens. Whether this war supercharges the green energy transition or sets it back a decade will be decided not by the shock itself, but by the choices governments make as it subsides.

Ali Ebrahim Faqeeh – Senior Analyst in the Economic Studies Program