One-Fifth of Global Oil Trade Is Blocked, But Solar Is Softening the Blow
Haley Zaremba

The effective blockage of the Strait of Hormuz has thrown the world’s continued dependence on fossil fuels into sharp relief. The interruption to the waterway, which accommodates one-fifth of the world’s oil and gas, has thrown global energy markets into turmoil. The blockage represents the single-largest interruption to global oil trade in history. But it’s not causing nearly as much pain as past oil crises thanks to a much more diverse global energy mix.

“There is little sign that the war with Iran will cause the kind of economic pain experienced about a half-century ago, when oil met almost half of the world’s energy needs,” the New York Times wrote in a report earlier this month.

To a large degree, you can thank solar energy for the fact that you’re not in a 1970s-style gas line. Globally, solar power capacity has seen an exponential rise over the last decade thanks to plummeting costs of the installation and maintenance of photovoltaic energy systems. In 2015, solar power provided just 1 percent of the world’s electricity as 228 total gigawatts. In 2025, that figure has skyrocketed to 2,919 gigawatts, providing about 9 percent of the world’s electricity, overtaking nuclear power.

“The energy source is still growing exponentially, and if it continues at current rates, global capacity could hit 9,000 GW by 2030 — enough to meet more than 20% of the world’s energy demand,” Deutsche Welle recently reported.

Solar has simply become too cheap to fail. In fact, researchers at the Lappeenranta-Lahti University of Technology in Finland calculated what the world’s most cost-effective energy system would look like, and solar takes center stage in such a scenario. Their modelling shows that a whopping 76 percent of the world’s energy would come from solar, with another 20 percent from wind and the remainder from hydropower, biomass and geothermal.

China is leading the charge in solar power deployment both domestically and abroad, and cheap Chinese solar panels have emerged as a primary driver of the global solar boom. At present, more than 80 percent of all solar panels on the planet are made in China. Europe and the United States have also installed enormous amounts of solar energy in recent years, despite a cool-off under the Trump administration. And now the developing world is deploying solar panels at a breakneck pace as well.

A recent Oxford study finds that low- and middle-income countries stand to benefit the most from adopting renewable energies, with potential GDP gains of around 10 percent and low barriers to entry. Accordingly, emerging economies are adding renewable capacities at a breakneck pace, and Brazil, Chile, El Salvador, Morocco, Kenya, and Namibia have already overtaken the United States in their clean energy transitions. All told, 63 percent of emerging markets in Africa, Asia, and Latin America now source more of their power generation from solar power than the United States.

“Some countries are pulling off stunningly fast energy transitions, adding solar so rapidly, it’s become a major source of electricity over the course of years — not decades,” reports CNN. Pakistan, for example, has quickly become “one of the world’s largest new adopters” as small-scale solar battery systems have become both cheaper and more reliable than sourcing power from the national grid.

Indeed, renewables, and especially solar power, have quickly become a critical component of energy security, independence, and autonomy around the world. “Wind and solar cannot be embargoed, blockaded, or shut off by a foreign power,” David Frykman, General Partner at Stockholm-based venture capital group Norrsken, recently wrote in an op-ed about the latest European energy affordability crisis for Fortune. “Every terawatt-hour of domestic renewable generation is a terawatt-hour that no adversary can weaponize.”

By Haley Zaremba for Oilprice.com

Haley Zaremba is a writer and journalist based in Mexico City. She has extensive experience writing and editing environmental features, travel pieces, local news in the Bay Area, and music/culture reviews.

oilprice.com