The war with Iran and the closing of the Strait of Hormuz, through which about 20 percent of the world's oil and liquefied natural gas passes, could lead to an unexpected drop in global greenhouse gas emissions from fossil fuels this year because of higher fuel prices, according to a recent report by a UK-based climate news organization.

Although disruptive to the global economy and painful for consumers, the chaos in the energy markets underscores the need to transition toward cleaner and more stable forms of fuel, advocates argue.

The report by Climate Brief, a news website funded by the nonpartisan European Climate Foundation, suggested the reduction this year would be very small: about 0.5 percent of global carbon dioxide emissions.

But the shift is significant because it was unexpected.  The International Energy Agency (IEA), in January forecasted a 2 percent increase in global natural gas consumption this year. But then after the fighting started, in July IEA revised its prediction to a 0.6 percent drop in global gas consumption this year.

Before the U.S. and Israel attacked Iran in February, global oil demand was expected to rise about 9 percent this year. But instead, with war in both Iran and the Ukraine disrupting international oil supplies and raising prices, oil demand has been steadily revised downward by the IEA throughout the year. The agency forecasted in September that demand for oil may now fall 2.4 percent in 2026, compared to last year.

As the conflict around Hormuz has spread and become more prolonged, IEA now looks to the future and expects global oil demand to remain flat for at least two years, rather than to rebound in 2027. 

“While there are many short-term factors at play in the shifting forecasts for 2026, it is clear that the latest energy crisis will also affect fossil-fuel demand in the next year and beyond,” wrote Dr. Simon Evans, senior policy editor at Climate Brief, who has a Ph.D. in biochemistry.

The change in trajectory could mean that peak oil and gas demand could come sooner than previous EIA predictions of 2030 or 2035, as countries and power providers search for alternative, less politically risky sources of energy, according to Carbon Brief.

A forecasted rise of 1.2 percent in global coal demand this year will be more than offset, when it comes to greenhouse gas emissions, by declines in oil and gas consumption this year. 

Daniel Esty, a professor at the Yale School of the Environment and Yale Law School, said he wouldn’t be surprised to see a drop in greenhouse gas emissions in 2026 due to high energy prices and the closing of the Strait of Hormuz. He thinks the predicted 2026 reduction in emissions reflects a longer-term trend toward greater energy efficiency and more renewable power.

“The lesson here is that government regulation is important but market forces are more important,” said Esty. “When people see the price of gas spike, some number go out to buy electric vehicles (EV’s), no matter how hostile the president might be to EVs.”

Since the Trump Administration and Israel launched the Iran war at the end of February, average U.S. gas prices have risen 45 percent, from $2.98 to $4.33. Average diesel prices have soared 72 percent, from $3.67 to $6.37.

California Gov. Gavin Newsom, who has been engaged with President Trump in a debate over climate policy centering on his state, recently said that the fallout from the war with Iran has made Trump – unintentionally – the “greatest gift” to the environmental movement. 

“This war has completely gutted any sort of romantic notions of energy security and it’s compelled folks to think differently,” Newsom said during Climate Week in New York. “It’s accelerating investments and clean energy and renewables.”

Solar and wind investments across Europe and the U.K. helped save countries billions of dollars as oil and gas prices surged earlier this year at the start of the war. In May, solar power surpassed coal generation in the U.S. electricity mix for the first month on record, supplying a record 12.8 percent of U.S. electricity.

Dargan Frierson, a climate scientist at the University of Washington, said that a major cause in the reduction in emissions is the rapid decrease in the prices of solar and wind, which has led to significant expansions in the use of this clean energy.

“If governments want to prepare for the future, fossil fuels are a bad bet, both in terms of affordability and lasting, severe environmental damages,” said Frierson. “Renewables and EVs are the ticket to a cleaner, more affordable future.”

Nick Wayth, global director of the World Resources Institute’s Polsky Energy Center, said the energy crisis has highlighted an important distinction. Some of nations that have been clean energy frontrunners are faring better than fossil-fuel dependent countries because investments in clean energy have given them a combination of more stable costs and a more secure supply.

“The message is clear, clean energy puts countries in control,” said Wayth. “Governments now face a choice in how to respond, optimally taking steps to speed the shift to cleaner, more resilient energy systems.”

Even former Vice President Al Gore, whose documentary An Inconvenient Truth made the case for climate action 20 years ago, is warming to the notion that 2026 could be a turning point for climate change. 

“Now that we have the second massive global disruption of fossil fuel availability and price in just four years, many nations around the world have awakened to the fact that this is a time to accelerate the transition,” Gore recently told Scientific American, referring to both the Iran War and the Covid pandemic. “We have all the technologies we need right now to reduce emissions by half in ten years. We know how to do it. We’re gaining momentum, but we’re not moving fast enough.”

Amanda Levin, NRDC's director of policy analysis, cautioned that the global picture is more complex and nuanced and that not all countries are heading straight toward a clean energy transition. 

“Countries like China, Brazil, Argentina, and Canada are not only investing in renewable production, but also expanding domestic fossil production in a bid to reduce imports or export more to other countries,” said Levin. “This could result in more, longer-lived, fossil fuel infrastructure.”

While crude oil flowing through the Strait of Hormuz has recently approached pre-war levels, extreme uncertainty regarding the future reliability of the strait remains, especially as refined petrochemical shipments through the Strait continue to be severely restricted. 

At the same time, the global fuel supply shortfall has pushed diesel prices in the U.S. to record highs, causing major economic headaches for consumers and policymakers. How President Trump will address the situation remains unclear, with news reports suggesting that he could escalate bombing in Iran after the midterms elections.

Global carbon dioxide emissions from fossil fuels have previously fallen twice since 2000, in 2009 and 2020, as a result of the global financial crisis and the Covid pandemic. Both drops were temporary and emissions rebounded the following years as economic activity resumed. The lingering uncertainty and increased viability of alternative energy options could make this year’s decrease more than a blip. Still, in order to put a dent in rising temperatures, the transition to a low-carbon economy will need to continue to accelerate, experts say. 

While oil and gas supply has taken a hit this year, oil and gas companies continue to profit greatly. A combination of surging prices and rising demand for electricity during one of the hottest summers on record allowed the multinational companies to collect  billions in profits.

A recent United Nations report emphasized the urgency of reducing carbon emissions before critical thresholds are crossed. According to the report, global temperature rise is set to cross 1.5° Celsius, likely within the next few years. Any additional rise in temperature will exacerbate heatwaves and other climate-driven natural disasters, creating more disruption and costing more lives.