How could ongoing conflicts in the Middle East affect global oil supplies, and what are the implications that this might have on the pace of green energy transition regionally and globally? The Israel-Hamas war is bad news for the energy market. Oil supply is already tight, driven by Saudi, Russia, and Iraq recent supply cuts. In part these cuts were done to keep prices high as these countries have geopolitics ambitions that require high oil and gas prices. The conflict will lead to more oil price volatility with potential medium-term trend bring the prices back towards 100-110$ a barrel. High oil prices will continue to keep inflation high eroding family purchasing powers particularly in lower income households in the MENA region. On the positive front, unless there is a regional conflict escalation resulting in a military strike against Iran (the 9th largest oil producer) there will not be a severe spike in crude oil.

On the other hand, the war will affect some of the global climate negotiations, as national priorities take the center stage during times of crisis, and country may shelve ambitious decarbonization targets. Some positive momentum will be lost, and climate investment towards MENA vulnerable countries will be delayed but the overall transition towards “green-growth” cannot be stopped nor slowed significantly. In fact, conflict may accelerate the Net-Zero transition, as countries shift to renewable energy in order to become more energy secure and less dependent on unstable energy supply actors. Europe is the perfect example that has embarked in a dramatic renewable energy transition since Russia (which supplied over 30% of natural gas to Europe) was embargoed to supply to Europe following its invasion of Ukraine in February 2022.

Is the war likely to accelerate or decelerate global efforts towards achieving climate change goals due to changes in oil prices? An expansion of the Israel/Palestine conflict would affect both oil prices and economic growth. However, since the Levant is not a large oil producing region, the war is unlikely to impact oil supply in the short term. If a regionalization of the conflict takes place, we will see more oil price volatility and upward pressure towards the 100$ a barrel or higher.

If this happens, high prices will drive more drilling of oil and gas around the globe, as fossil fuel companies rush to cash in. That will make oil abundant and affordable again increasing demand for oil, which could result in a deceleration of “the Net-Zero” movement. In my view though, the biggest threat to the “green transition” is oil price volatility, as the swing in pricing deter many investor to take to market renewable energy projects.

How might geopolitical tensions in the region influence international collaborations on green energy projects and climate initiatives? While the short-term debate has shifted towards geopolitics and regional security, the energy transition and broader green growth will continue strong. The IMF and World Bank Annual Meetings that ended in Morocco on October 15, sent a strong message to showcase the great Green Growth Momentum. The forum was however anchored on the understanding that ‘crisis’ — economic, climatic and conflict-related — are the new normal and global financial architecture transformations need to adjust to this. The new President of the World Bank (who is from the Global South having been born in India) highlighted the WB’s climate finance has tripled from $11 billion to $39 billion. Participants at the event acknowledged that to address climate risk, $4-6 trillion dollars a year need to be invested going forward.

In terms of investments, Climate tech investments from venture-capital and private equity fell 40% in 2023 as economic uncertainty and geopolitical conflict affects investor confidence (PWC). However, the overall climate partnership and climate tech investment is performing better than other sectors, which slowed by 50 and 60% from last year.

How could climate disruption accelerate decarbonization for greater energy security? Increased climate variability, heat waves, and heavy precipitation will increase the intensity and frequency of natural hazards such as floods, wildfire, sea-level increase, and droughts, thus interrupting oil and gas supplies with greater impacts on livelihoods. According to Verisk Maplecroft, (a risk modeling firm) 30% of global oil and gas reserves are at “high risk” to climate disruption. This risk is increasingly catalyzing the establishment of a more renewable and localized energy system. These systems would be less dependent on a few energy “barons” producers from unstable countries.

Could the ongoing war disrupt supply chains for renewable energy technologies, given the region’s significant role in the global energy sector? The conflict in Palestine/Israel, similarly to the war in Ukraine, is likely to speed up rather than slow down the global transition away from fossil fuels and toward cleaner technologies like solar, green hydrogen and electric vehicles. Having said that, in order to meet the Paris Climate Accords, and limit temperature increase below 2C by the end of the century, we need to reach $4 trillion in clean energy investment by 2030 instead of the projected $2 trillion.

Please provide some comments regarding COP28 and its timing amid the war. The ongoing conflict between Hamas and Israel is overshadowing global cooperation and with that CEO28 President Al-Jaber’s ambitions. The potential for a regional war is real and hostilities by Hezbollah and other Iranian-backed groups will likely increase.  This is shifting global attention away from NET zero, and towards regional stability and security of energy supply to global markets. At the end of September, every major newspaper had climate tech, green growth and green hydrogen in the first few pages of the newspaper. Now you need to scroll to the end of the paper to find anything related to COP28. Also, having participated in 5 COP over the last 20 years, I expect assertive civil society protests at COP to draw attention to how an escalating Israeli invasion, and its destruction to energy and water systems, is making the Palestinian even more exposed to climate change.

Do you feel USA is currently more focused on the 2 wars in Palestine and Ukraine, where by this my switch and decelerate its focus on its climate change goals? The US will continue to leverage “maximum diplomacy” to de-escalate the Israel/Palestine conflict, using economic tools to bring regional actors to the negotiating table. The climate investments in the United States will not slow down. Congress approved more than $370 billion in spending in 2022 for such technologies through the Inflation Reduction Act. This massive investment created a domino effect in the EU, Japan, India, China and South Korea which are all prioritizing a similar investment approach. Clean energy investment rose from $1.5 trillion in 2022 (IEA) and it is expected to pass the $2 trillion annually by 2030. Essentially the ongoing conflicts are pushing countries towards greater energy independence and security, prioritizing investment in innovation and decarbonization in order to be self-sufficient and more competitive.