Middle East Conflict Disrupts Global Renewable Supply Chains, S&P Global Reports

Middle East Conflict Disrupts Global Renewable Supply Chains, S&P Global Reports

April 28, 2026

A recent analysis by S&P Global reveals that while the ongoing conflict in the Middle East has not derailed the ambitious green energy targets of Gulf nations, it is creating significant “hidden strains” on global renewable energy supply chains. As of late April 2026, the primary impact is being felt through logistical bottlenecks, particularly involving the Strait of Hormuz. Before the conflict, approximately 140 ships passed through the strait daily; that number has plummeted, causing delays in the delivery of critical components for solar and wind projects across the region and beyond. The disruption is both direct and indirect. Directly, projects in Saudi Arabia and the UAE are facing delays in “project sequencing” due to equipment shipping bottlenecks. Indirectly, the conflict has sent freight rates and insurance premiums soaring—capesize freight rates rose nearly 25% in early 2026 alone. This “inflationary ripple” is beginning to impact the cost of new renewable installations globally. However, S&P notes that many of these projects are protected by robust contractual frameworks, including delay mitigation clauses, which help maintain project viability even during periods of armed conflict. 

Interestingly, the war is acting as a catalyst for a re-assessment of energy sovereignty. In markets like India and China, the vulnerability of fossil fuel routes—highlighted by recent surges in Brent crude to over $109 a barrel—is accelerating the transition toward domestically produced clean energy, such as green hydrogen. S&P Global highlights that while fossil fuel systems are highly sensitive to commodity price volatility during war, large-scale solar and wind projects remain largely insulated once operational, as they rely on “locally sourced spare parts” and highly automated processes that require minimal on-site personnel.