The Strait Of Hormuz And The Case For Faster Energy Transition | Prof Fang Zhao (CEO)

The Middle East conflict is once again exposing a structural weakness in the global energy system: too much of the world still depends on a small number of highly concentrated fossil fuel supply routes.
The Strait of Hormuz remains one of the most critical chokepoints in the global economy. In 2025, nearly 15 million barrels of crude oil per day — around 34% of global crude oil trade — passed through the Strait, with most exports destined for Asia [1].

Recent disruptions have shown how quickly markets react. Oil prices surged above US$110 per barrel when shipping through Hormuz was threatened, only to fall sharply when passage reopened. This pattern is not new. From the oil shocks of the 1970s to the Russia–Ukraine war and now the Middle East conflict, the same lesson keeps repeating: fossil fuel dependence creates systemic exposure to geopolitical risk.

Three evidence-based observations stand out:

• Fossil Fuels = Volatility
Oil, gas and coal are globally traded commodities vulnerable to conflict, sanctions, supply disruptions and transport bottlenecks. The Strait of Hormuz alone carries around one quarter of global seaborne oil trade, as well as major volumes of LNG and fertilisers [2].

• Renewables = Resilience
Solar and wind are not exposed to global fuel price spikes. Once infrastructure is built, there is no imported fuel cost. The IMF has found that greater renewable energy adoption can reduce the sensitivity of economies to fossil fuel price shocks and inflation volatility [3].

• Energy Transition = Risk Management
The International Energy Agency increasingly frames clean energy not only as a climate solution, but as a core energy security strategy. The transition to a more electrified, efficient and renewables-rich system can reduce exposure to fossil fuel price volatility and supply shocks [4].

This is why energy transition should no longer be viewed only through a decarbonisation lens. It is also about resilience, competitiveness and stability.

For businesses, governments and communities, the question is no longer whether to transition, but how quickly they can reduce their exposure to concentrated fossil fuel risks while building more secure, local and diversified energy systems.

At Strategy&Ops, we increasingly support organisations to approach energy transition as a resilience and risk management strategy, not just a decarbonisation pathway.

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