The recent framework agreement between the United States and Iran has raised hopes for a reduction in regional violence and a stabilization of energy supplies in the Persian Gulf. However, experts caution that the global economic landscape will not simply revert to its pre-conflict state following the onset of hostilities between the U.S. and Israel and Iran on February 28.

The conflict has initiated profound shifts that are expected to have lasting effects on global energy markets and geopolitical dynamics. Disruptions in oil and gas deliveries from the Middle East, coupled with surging prices, are reshaping the balance of energy power. Producers across the Gulf region and the Americas are actively competing to either maintain or expand their market influence, while consumers worldwide seek to diversify their energy sources and strengthen supply resilience.

This evolving energy landscape is marked by changes in the energy mix and the key players involved. Countries heavily reliant on imported energy, particularly in Asia and Europe, face heightened vulnerabilities. As a result, some, including South Korea and Japan, have temporarily increased their use of coal—a move seen as a short-term response to the current instability.

In the longer term, analysts say the current energy disruption is likely to accelerate the global transition toward renewable energy sources such as solar and wind, alongside expanded use of nuclear power. Advances in battery technology and improvements in energy efficiency are playing critical roles in making this shift more attainable than during the previous energy shock triggered by Russia’s invasion of Ukraine in 2022.

Electric vehicles, for example, are becoming more affordable and widespread, supporting this transition. Notably, in April, global electricity generation from wind and solar sources surpassed that from natural gas for the first time, marking a significant milestone in the energy sector’s transformation.

“These dynamics reflect a major turnaround,” said Daan Walter of Amber, a London-based energy research group. “What was barely competitive five years ago is now visibly more cost-effective.” Investments in renewable technologies have also shown improved financial viability, with returns expected within two years instead of decades.

Meanwhile, producer relations in the Middle East are also undergoing change. The conflict has exacerbated tensions between the United Arab Emirates and Saudi Arabia, leading the UAE to withdraw from the OPEC Plus oil cartel. The full consequences of this exit are yet to be realized but could contribute to increased volatility in global oil markets if regional production does not meet demand.

Overall, the developments signal a permanent shift in the global energy order, with implications for economic strategies and geopolitical alignments worldwide.