Energy: The War in Iran Threatens Europe’s Energy Transition

Luis Augusto Medeiros Rutledge

Energy Geopolitics

The consequences of the war in Iran are casting a shadow over Europe’s energy transition due to inflationary pressures that may result in increased prices for renewable energy equipment.

The war in the Middle East is occurring at a decisive moment, when the European Union faces growing internal criticism of its climate policies. This is reflected in calls from national governments and industry leaders to increase pressure on Europe’s emissions trading system, or even to reduce carbon emission targets for new vehicles. Thus, the rise in oil and gas prices since the beginning of the war against Iran on February 28, 2026 represents a significant risk to the progress of Europe’s energy transition.

The war in the Middle East is the latest warning sign for Europe, which faces the dilemma of relying on energy imports to meet growing domestic demand.

Although early signals from policymakers point to an increase in investment in the renewable energy sector this year, inflationary risks are imminent as a result of the U.S.-backed war against Iran.

The Iran crisis has highlighted the repercussions of Europe’s dependence on energy imports. Moreover, it has revealed, in many ways, the vulnerabilities of the old continent. What is happening is that Europe’s exposure to risk has shifted from Russian pipelines to LNG imports, generally coming from the United States and the Middle East.

Oil and gas prices have also risen following the military attacks by the United States and Israel against Iran. This revives the natural gas crisis that emerged after the beginning of the Ukraine war. At that time, Europe faced a major energy crisis that pushed European leaders to accelerate their efforts in energy policies aimed at deploying renewable energy, while also securing gas supplies after the disruption of Russian flows.

The urgency of continuing to improve the functioning of the energy market, attracting more investment in technological innovation, and advancing the transition to locally produced clean energy is very clear. A global coalition focused on accelerating the transition to clean energy—through renewable energy sources, combined with electricity storage, resilience, and other low-carbon energy options—represents a pathway to resilient infrastructure and protection of economies from energy price shocks.

Despite large volumes of solar and wind energy installations and the accelerating deployment of electric vehicles continuing to grow, dependence on oil remains real and immediate.

In the European Union (EU), climate targets and their respective timelines have been under strain since their implementation, at least since the beginning of the Russia-Ukraine war and its repercussions, which significantly affected energy security and the stability of European economies.

Several energy reports predict that EU emissions will not reach their net targets of around 684 million tons per year by 2050 under current policies, despite member states having agreed on the goal of achieving net emissions by 2050.

For the world to achieve carbon neutrality, the EU’s climate targets must be met by 2048 to compensate for other regions that will continue emitting over the next decade and beyond, such as China and India.

China and other countries have pledged to achieve carbon neutrality by 2060, while India has committed to reaching it by 2070, unlike Europe and the United States, which are committed to achieving it by 2050, according to the Energy Research Unit.

The EU remains a leader in the energy transition with ambitious targets, but the turbulent start to the decade—especially since the invasion of Ukraine and the current war in the Gulf—raises doubts and further increases the obstacles.

Nevertheless, the EU’s climate targets for 2050 are still achievable if investments in renewable energy and emerging technologies such as hydrogen and carbon capture increase, while political commitment strengthens and future demand is stimulated.

The current geopolitical scenario of seemingly endless wars makes it clear that smaller economies will require support for electricity through the financing of critical infrastructure, low-carbon electricity supply, and public incentives, while larger economies will be in a better position—reflecting the gap in the adoption and implementation of clean technologies among countries.

Another aggravating factor must be addressed and is directly related to a serious danger to health and the environment. The war in Iran risks generating global pollution.

Attacks by the United States and Israel have targeted refineries in Iran, which responded by attacking oil sites and ships in the Gulf—posing a serious danger to health and the environment.

Experts warn of possible deaths linked to the vapors of sulfur dioxide (SO₂) and nitrogen oxides (NOx) created by the combustion of oil, in addition to sulfur, benzene, and hydrogen sulfide. This pollution is already spreading to other countries in the Gulf.

Although oil facilities are frequently targets in wars, fires in Tehran are unusual, as it is rare for such incidents to occur in a densely populated area with the potential to directly affect the health and well-being of such a large civilian population. The war planners should have taken this into account when deciding to attack these sites.

In conclusion, we are experiencing a unique and negative moment: supply routes for raw materials facing logistical difficulties, an immediate impact on investments related to the implementation of clean energy generation technologies, and unexpected pollution that will affect Persian and Arab generations.

The war involving Iran in the Persian Gulf has the potential to provoke major distortions in the global energy market. However, saying that the world is about to “return to the coal era” is more a metaphor about energy security than a literal scenario. Even so, the risk of greater coal use in the short term is real.

Luis Augusto Medeiros Rutledge is a Petroleum Engineer and Energy Geopolitics Analyst. He holds an Executive MBA in Oil and Gas Economics from the Federal University of Rio de Janeiro (UFRJ) and a postgraduate degree in International Relations and Diplomacy from IBMEC.

He works as a researcher at UFRJ, is a Consulting Member of the Observatory of the Islamic World of Portugal, a consultant for the Center for Foreign Trade Studies Foundation (FUNCEX), a columnist for the website Mente Mundo Relações Internacionais, and the author of numerous published articles on the energy sector.