As tensions in the Middle East begin to wind down after the signing of a memorandum of understanding between the US and Iran, leading energy sector think tank Institute for Energy Economics and Financial Analysis believes this unprecedented disruption may leave a lasting impact on global energy markets.
Speaking with, Alasdair Docherty, sustainable finance and data analyst at IEEFA, said the prolonged closure of the strategically crucial waterway had "done its damage" for the broader fossil fuel agenda.
Docherty noted that clean energy ETFs were outperforming traditional fossil fuel funds during this period, which he said was unheard of during periods of "geopolitical crisis."
He added that governments are becoming less convinced that simply diversifying fossil fuel supplies is sufficient protection against future disruptions. Countries such as France, Spain and large parts of Asia are now turning towards electrification.
"What the latest crisis has taught us is that diversifying supply does not protect you from these shocks," he said. The strategic long-term agenda is now about bringing "ownership of your own energy supply within domestic borders," in order to reduce reliance on imports, while minimizing the impact of global shocks.
So, as the global energy markets emerge from this crisis, the big winners, according to Docherty, are going to be clean energy investments and renewable technologies, "particularly batteries."
He acknowledged that governments will continue to rely on natural gas to support power systems and manage renewable intermittency, but for the long-term solution, countries will be looking at the electrification agenda.
"There is going to be a role for gas for the foreseeable future," he said. The cost reductions in battery technology has been phenomenal in recent years, paving the way for centralized storage, which according to Docherty, is where money should be going. There is a very real possibility of a "long-term future without gas."