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Hormuz Crisis Impact on Electricity Sector
A report by the International Energy Agency predicts that global electricity demand will increase by 3.6% in 2026 and 3.8% in the following year, with China’s consumption growing by 5.5%, and the United States and the European Union each seeing a 2% rise. This growth is driven by industrial expansion, increased use of electrical appliances, data centers, and electric vehicles. Studies indicate that the expansion of reliance on artificial intelligence—which requires between 40 and 100 kilowatts per operation—significantly boosts energy consumption. Meanwhile, dependence on fossil fuels remains ongoing, despite their limited share of renewable energy sources at around 30%, and is threatened by tensions in the Strait of Hormuz, which have led to a more than 55% reduction in oil supplies. Additionally, electricity consumption increases by 2-5% for each degree Celsius rise in temperature, posing risks to global energy security. Therefore, experts are calling for an increased focus on renewable energy sources, storage technologies, and efficiency measures to reduce dependence on vulnerable shipping routes, especially after the closure of the Strait of Hormuz due to heightened tensions and the resumption of U.S.-Iranian military activities.
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