The shock of the high oil price due to the Gulf War has made decision-makers around the world rethink how they can escape their long-term dependence on energy from the troubled region.
After the US and Israel attacked Iran on February 28, the oil market has suddenly changed completely. Iran is blocking the Strait of Hormuz in and out of the Gulf, where 20 percent of the world's oil consumption is produced. Now only a few tankers are passing through the strait, and this has caused the price of oil to rise noticeably.
As the price rises, so too are considerations and discussions about other forms of energy. Whether one should invest in nuclear energy, wind or solar energy or other green forms of energy to once and for all escape dependence on oil from the Middle East or elsewhere.
In recent years, the green transition has taken a back seat internationally, even though climate change is still a concern. But that could change now, as it is the second time this decade that an energy shock has forced governments around the world to acknowledge the risks of being dependent on oil and gas.
- The issue of energy security has never been more acute than now. Until a few weeks ago, the market took the resources from the Gulf for granted. That is no longer the case, says Geoffrey Pyatt, director of the American consultancy McLarty Associates.
Looking towards green energy and nuclear power
The leaders of the world's largest energy-consuming countries are now back in the meeting rooms to figure out what to do.
Last week, the EU announced that it would introduce financial guarantees for investments in nuclear energy. This comes after nuclear power has been phased out in recent years in several EU countries.
In China, one of the state planning ministries says that China should accelerate its transition to renewable energy. At the same time, China should expand energy reserves and find more suppliers so that it is not so dependent on the Gulf.
- It is not only in China, but around the world that people are considering supply lines and production systems. Perhaps they will pay more attention to nuclear energy and clean energy, says Wang Jin of the Beijing Club for International Dialogue, a think tank affiliated with China's Foreign Ministry.
China is already the world's largest country when it comes to clean energy.
Expensive transition
The world's immediate solution to the ongoing crisis has been for the major nations to release a large part of the oil they have in their reserves. At the same time, governments, mainly in Asia, are asking their citizens to save energy.
The current crisis comes after energy prices also suddenly rose in 2022 when Russia, a giant oil and gas producer, invaded Ukraine. This led to sanctions against Russia, and Europe discovered that there are consequences to being dependent on Russian energy.
Europe began to restructure its energy in order not to be dependent on Russia, and such things are expensive. Before that, there was a crisis in 2020 in connection with the corona pandemic. Corona and the Ukraine war jointly contributed to the specter of inflation starting to rage. Now inflation is threatening again due to expensive oil.
Since the outbreak of war, the price of the EU's fossil energy imports has increased by six billion euros - 45 billion kroner - and this is putting great pressure on energy prices in Europe.
In a speech on March 10, Ursula von der Leyen, President of the European Commission, said that it is a huge disadvantage for the EU to be dependent on such expensive and uncertain imports.
It was here that she also said that it has been a "strategic mistake" for the EU to have reduced energy from nuclear power over the past 25 years.
/ritzau/
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