The escalating conflict in the Middle East and its threat to fossil fuel supply chains could serve as a major catalyst for the global transition to renewable power, according to Dr Badrinath Narayanan Gopalakrishnan, former Trade Head at Niti Aayog.
Speaking to NDTV Profit, the Boston College faculty member suggested that the sheer unpredictability of the regional oil market is fundamentally altering the financial calculus for nations previously hesitant to abandon traditional energy sources.
"I think there can be some kind of acceleration of movement away from fossil fuels," Dr. Badri stated. "Which was until now... a difficult decision for many countries given the costs involved. But given the uncertainties and volatilities you see in the oil market, it may actually be economically sensible for countries to move towards green energies."
This potential green acceleration is being driven by the looming threat of a worst-case scenario in the Strait of Hormuz. Dr. Badri warned that a wider regional war involving Israel, Iran, and the U.S. would have "catastrophic implications" for global trade.
"As we all know the oil and gas trade is completely... controlled by that region. So that's going to hugely escalate these prices," he added.
He added that the vulnerability of the region extends far beyond just fuel, threatening global supplies of petrochemicals, fertilisers, and even helium. "Entire, entire supply chain is going to be disrupted," Dr Badri added.
Consequently, major regional economic ambitions are already feeling the chill as capital retreats from the volatility.
"We already see that a lot of investment activities that were happening in countries like the UAE and Saudi Arabia are taking a back seat now," Dr. Badri noted, highlighting how current instability is forcing the world to rethink its reliance on traditional Middle Eastern energy corridors.
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