South Korean President Lee Jae Myung is losing sleep. That’s what he told a crowd on Juju Island earlier this week while discussing the consequences, for his economy, of the U.S. and Israel’s attacks on Iran. “This latest war in the Middle East has made it clear that the energy transition—that is, the major shift to renewable energy—is no longer a national and historical task that can be postponed,” he said. Continuing to rely on imported fossil fuels, he warned, “makes the future very dangerous.”
It’s not uncommon for climate advocates to pitch renewables as a boon for national security: No one controls the sun and the wind, after all, and, once solar and wind farms are installed, the electricity they provide does not rely on volatile global energy markets. America’s and Israel’s disastrous war of choice against Iran and neighboring countries is helping prove the point. Iran has kept the Strait of Hormuz—the world’s most important passageway for oil, gas, and a host of other vital commodities—closed for the last month. Prices at the pump have climbed to more than $4 a gallon in the U.S. Life here otherwise, however, although pricier, has so far continued more or less as normal. That’s partially because we’re a net exporter of oil and a major gas producer. Asian countries, many of which are net importers of both oil and gas, face a much deeper crisis. Some 90 percent of the oil and gas that usually flows through the Strait is bound for the region. South Korea, for instance, imports 94 percent of its energy; nearly two-thirds of its crude oil comes from the Persian Gulf. While policies to boost renewables and cut oil and gas use have rapidly fallen out of favor in the U.S., some of the world’s largest and most dynamic economies are increasingly treating them as necessities for economic stability and national security.
A series of recent energy deals helps illustrate that divergence. Onstage at an oil and gas conference last week, U.S. Interior Secretary Doug Burgum announced that the U.S. government would pay TotalEnergies $1 billion to cancel a pair of wind farms the company had planned to build off the East Coast. In exchange, the French company—which has made another $1 billion betting on the last month’s turmoil—agreed to build more gas-fired power plants here, produce more oil in the Gulf of Mexico, and construct a liquefied natural gas export facility in Texas.
In Vietnam, by contrast, the energy conglomerate Vingroup JSC this week proposed scrapping its planned LNG-to-power facility and replacing it with one that would use solar and wind power paired with battery storage. “In addition to cost factors,” Vingroup wrote in a letter to the Vietnamese government, “dependence on imported fuel also poses considerable challenges to energy security, supply autonomy, and Vietnam’s ability to control electricity generation costs.”
For energy analysts, these sorts of announcements are a sign of things to come. Sam Reynolds, a research lead with the Institute for Energy Economics and Financial Analysis, or IEEFA, calls the news “probably the most tangible sign yet that LNG has lost ground as a viable transition fuel for Asian economies.”
Prospects for just such a gas-heavy transition raised high hopes among gas-exporting countries. Vietnam’s energy demand has grown by more than 7 percent a year over the last decade, with gross domestic product growing by 8 percent annually over the same period. Gas exporters in the Gulf and the United States both saw a prospective payday in that country’s attempts to transition away from coal, which meets around half of primary energy demand for its 102 million people. Despite ambitious plans to build out a fleet of LNG-to-power projects as part of that transition, though, just a single plant has been built amid struggles to court investors and negotiate power-purchasing agreements.
Moves like this raise a scary prospect for fuel exporters: “demand destruction.” Since the crisis started, several countries have instituted creative measures to slash demand for imported oil and gas. Thailand generates roughly two-thirds of its power from gas. Prices for Thailand to secure shipments of LNG—which accounts for 27 percent of the country’s total gas supply—have surged by an estimated 125 percent. As temperatures hover around 100 degrees in Bangkok, the government has accordingly urged people there to keep their air conditioning set at 79 degrees and ordered civil servants to work from home. Sri Lanka has designated all Wednesdays public holidays. The government of the Philippines—where petrol prices have jumped more than 50 percent over the last month—has declared a national energy emergency.
As the crisis grinds on, countries could make more permanent shifts. The Philippines is looking to fast-track grid entry for 12 solar projects, collectively bringing nearly 1.3 gigawatts of additional power online this month. The country’s state-owned pension fund is also offering $8,300 solar loans for its members to buy and install solar power. The Asian Infrastructure Investment Bank announced it will look to accelerate cleaner energy adoption in the name of increasing self-sufficiency.
On the face of it, these efforts to reduce oil and gas demand would seem like good news for the climate. But the reality is a little more complex. Many countries have paired conservation measures and announced renewables build-outs with rapidly increasing coal usage. Thailand’s national electric utility, the Electricity Generating Authority of Thailand, or EGAT, has ordered the restart of 0.6 GW of coal power. South Korea, which is looking to subsidize public transit to curb gasoline demand, lifted caps on generating electricity from coal. Japan is now allowing less-efficient coal plants to feed power into the grid so as to offset demand for gas, which supplies about a third of the country’s energy demand. India, where electricity usage is surging to record highs, could see coal usage meet a record 283 GW of demand as temperatures continue to rise. As China continues to expand its renewables generation capacity at a rapid clip, the country is likewise firing up its enormous fleet of coal plants, which have been operating well below capacity.
Shelling out to keep aging coal plants online isn’t exactly a long-term solution, though. Coal prices are rising as demand spikes too, and big regional producers like Indonesia are looking to prioritize domestic customers over foreign buyers. Despite relatively high up-front costs for bigger projects, renewables build-outs have become a more attractive option thanks to the plummeting cost of solar panels produced by China. Pakistan faces a dire energy crisis like its neighbors, but has been somewhat insulated thanks to the fact that it now generates roughly 30 percent of its energy from renewables, up from just 3 percent in 2020. Since 2023, the country has imported a whopping 41 GW worth of solar panels from China. A recent report found that Pakistan had avoided more than $12 billion worth of oil and gas imports between 2021 and February 2026.
As even longtime U.S. allies scramble to secure deals with Iran to allow tankers to pass through the Strait of Hormuz, more countries could sour on the idea that relying on fuel imports from either the U.S. or the Gulf is a realistic way to meet their growing economies’ energy needs. The war in Iran is accelerating some kind of energy transition. It probably isn’t the one that climate activists had in mind.
