The Middle East War Could Accelerate Global Energy Transition—Who Will Benefit? An In-Depth Analysis

The military strikes by the United States and Israel against Iran have now lasted over three weeks, but the war shows no signs of cooling down.

According to reports from CCTV News and other media outlets, U.S. President Donald Trump posted on social media on the 21st, stating that if Iran does not fully open the Strait of Hormuz without threats within 48 hours, the U.S. will strike and destroy all of its power plants. An Iranian military spokesperson responded that if Iran’s fuel and energy infrastructure are attacked, all energy, information technology, and freshwater facilities belonging to the U.S. and Israel in the Middle East will become targets.

As geopolitical tensions in the Middle East re-emerge and energy prices soar, the world seems to suddenly realize: over-reliance on a single channel and region for fossil fuel supply always carries significant risks.

Some analysts point out that the volatility of the Middle East geopolitical situation and increasing uncertainty in global traditional energy supplies will further push countries to accelerate energy transition efforts, vigorously developing renewable energy sources such as solar and wind. Just as the structural shift triggered by the Russia-Ukraine conflict in 2022, this war is also becoming a powerful catalyst for Europe’s green energy transition.

Jefferies Financial Group Inc. released a recent report indicating that ongoing conflict with Iran has once again exposed Europe’s deep vulnerability to the turbulent global fossil fuel market and the strategic risks associated with the Strait of Hormuz.

“The debate shifts”

Analysts note that the current conflict has reignited concerns about inflation and worsened the plight of energy-intensive industries, while Europe’s expanding wind and solar power capacity is providing critical buffers. Unlike previous energy shocks, larger renewable energy installations are increasingly alleviating wholesale electricity prices during peak periods, even though natural gas still remains profitable.

Experts believe that as political debates rapidly shift from reducing carbon emissions to regional affordability and energy independence, this “security-driven” investment cycle could benefit mature OEMs and large utilities.

Accelerated transition is also expected to trigger a new round of policy interventions in electricity markets. To protect consumers from potentially “sustained surges” in energy costs, governments across Europe are prioritizing the construction of resilient grid infrastructure and energy storage solutions.

This shift marks a fundamental reallocation of capital toward companies capable of providing large-scale, decentralized power solutions. With the risk premium on imported oil and gas remaining high, the link between renewable deployment and economic stability has never been more apparent.

Beneficiaries

The report also emphasizes that while current market reactions are mainly defensive, the long-term winners will be those who can leverage “transformational changes” in energy policy. Jefferies predicts that over the next decade, this transition will bring sustained tailwinds to the industry, provided that supply chain bottlenecks in wind and solar sectors are effectively addressed.

Energy storage will face unprecedented development opportunities. According to the latest data from Wood Mackenzie, global new energy storage capacity is expected to reach 106 GW in 2025, a 46% year-over-year increase, surpassing 100 GW for the first time, with total global storage capacity approaching 270 GW/630 GWh.

In overseas markets, in Q3 2025, the U.S. added 5.3 GW/14.5 GWh of energy storage capacity, with an estimated total addition of 19 GW/52.5 GWh for the year—power and capacity growth of +53%/+45% year-over-year. Europe’s energy storage additions are projected to reach 27.1 GW in 2025, a 45% increase. The residential storage market, which had slowed down due to falling electricity prices and channel inventory reduction in the past two years, is gradually recovering and is expected to bottom out and rebound in 2026.

For China, this presents both challenges and opportunities. China accounts for over 80% of the global photovoltaic module market, has been the world’s largest wind power capacity for consecutive years, and boasts a complete new energy industry chain with advanced technology. Driven by energy security strategies, China is accelerating the construction of a new power system centered on renewable energy, moving from top-level design to practical implementation involving grid upgrades, energy storage support, and absorption mechanisms.