Climate founders used to lead with decarbonization. Now the pitch is resilience.
I’ve spent 20 years making the economic case for clean energy. I never imagined the geopolitical case would be made for me — in real time, and at the cost of thousands of lives, like we’re seeing in the Strait of Hormuz.
Roughly 20 million barrels per day of oil moved through Hormuz in 2024, equivalent to about one-fifth of global petroleum liquids consumption. When that waterway closed, oil prices spiked to $126 per barrel in what the U.S. Energy Information Administration has described as the largest supply disruption in global oil market history.
A modern economy that depends on tankers clearing a military chokepoint is grossly exposed. This is what happens when an entire economic system runs on fuels that must pass through contested corridors.
The Frame Shift
Oil shocks are macroeconomic and geopolitical risks, plain and simple. Grid software, battery storage, distributed energy, industrial electrification: these are infrastructure investments that also happen to decarbonize. The winners will be companies that help economies burn less oil, absorb commodity shocks, and keep running when the geopolitics get ugly.
The Hormuz closure confirmed this shift loudly, expensively, and irreversibly.
The Capital Was Already Moving
The evidence is in the capital flows. BloombergNEF reports that global energy transition investment reached $2.3 trillion in 2025, with grid investment alone at $483 billion. But the public markets tell an even sharper story. Since that closure, the Invesco WilderHill Clean Energy ETF is up 118% in a single month. The iShares Global Clean Energy and Invesco Solar ETFs have gained 54% and 75% year over year, respectively. Bloom Energy surged 24% on a 2.8-gigawatt fuel cell deal with Oracle.
Beyond returns, what’s even more striking is the pipeline itself. Pre-revenue clean energy companies are entering public markets at a pace that would have been unthinkable two years ago. X-Energy filed for its IPO in March 2026, bringing advanced nuclear technology to public investors. Fervo Energy filed confidentially in January for a geothermal IPO. SPAC issuance hit 62 deals in Q1 2026, raising $11.8 billion — nearly four times the volume of Q1 2025 — with energy transition cited as a priority sector. Venture has been betting on this for years. Public markets have now joined in, pricing energy independence as core infrastructure.
Why This Exposure Is Undeniable
The repricing reflects a structural vulnerability that can no longer be ignored. Oil dependence is a national security liability because it amplifies the impact of a single regional conflict across the entire global economy. The EIA describes the Strait of Hormuz as a critical chokepoint and notes that most volumes moving through it have no practical alternative route out of the Persian Gulf, even with some pipeline bypass capacity in place. This one narrow passage influences fuel prices, insurance costs, shipping schedules, inflation expectations, and diplomatic posture across multiple continents.
About one-fifth of global liquefied natural gas trade also passes through Hormuz, primarily from Qatar. So does a significant share of the fertilizer precursors and agricultural imports that Gulf states rely on to feed their populations. Higher oil and LNG risk pushes up shipping and fertilizer costs, which flow into food prices, logistics, and broader inflation pressure. The World Bank flagged the speed at which commodity conditions can shift in its March 2026 food security update, and the evidence on the ground confirms it.
In conversations with investors and partners across the Gulf, the picture is stark. Food prices in Dubai have risen to 3x their pre-conflict levels for certain goods where Iran is an important supplier. The UAE imports roughly 90% of its food. We saw this dynamic during the Ukraine conflict, and we are seeing it again now with compounding severity.
The most immediate policy response to energy disruption is always the same: release reserves, expand production, subsidize fuel prices to stabilize the short term. These measures may be necessary during acute crises, but they are treatments, not cures. Producing more oil does not eliminate volatility if economies remain tied to global pricing mechanisms and physical bottlenecks that constrain supply movement. The EIA’s own analysis supports this: the problem is structural dependence on globally traded fossil fuels that move through fragile infrastructure. Expanding supply within this system reinforces the same network of shipping routes, insurance markets, and geopolitical dynamics that create instability in the first place. So nothing changes, and the next disruption hits just as hard — if not worse.
The alternative is to build energy systems that can’t be shut down by war. Electrification, grid expansion, energy storage, and efficiency investments shift economies away from fuel-based volatility toward more stable, domestically anchored infrastructure. Electric vehicles displace oil for transport. Heat pumps reduce dependence on fuel-based heating. Grid-connected renewable generation can run an economy without imported fuels at all — the International Energy Agency has been emphatic on this point specifically.
For two decades, decarbonization was a moral and economic argument. Instability wrote that case for us.
The clean energy transition was already the right investment thesis. The Strait of Hormuz just made it the only one.
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