This story was first featured in the Aftermath newsletter, a series from David Dayen exploring the economic consequences of the war in Iran. To have these stories delivered to your in-box as soon as they are published, sign up for the newsletter here.

Welcome back to Aftermath! We appreciate your comments on our inaugural edition; if you’d like to give us feedback or suggest a topic, please email us at aftermath@prospect.org.

In today’s edition: the future of renewables amid the fossil fuel supply shock.

Are We Still at War?

Yes. Israel and Lebanon met face-to-face on Tuesday even as new attacks persist. The blockade appears to have not stopped some ships from crossing the Strait of Hormuz, which is the opposite of what a blockade should do. But most ships don’t want to sail the strait, owing to the risks involved, and the blockade was more successful on Tuesday. That means the supply shock continues.

At the weekend talks, Iran apparently proposed suspending uranium enrichment for five years, while the U.S. asked for 20. Nuclear weapons, as seen with North Korea, are a point of geopolitical leverage that prevents attack; but Iran has found another leverage point with the Strait of Hormuz, allowing them to maneuver on nuclear capabilities. There are discussions for more talks, but until then we’re in a holding pattern. —David Dayen

The Green New Steal

During the 2024 campaign, the core of Donald Trump’s energy platform was an all-out attack on President Biden’s climate policies. After taking office, Trump was as good as his word, signing a repeal of the Inflation Reduction Act and abolishing subsidies for the manufacture and purchase of solar panels, wind turbines, and EVs.

Trump only slowed the march of American renewables, however. The price of solar in 2025 was cheaper than any other form of electricity in most of the world, even without subsidies. And now with his unprovoked war of aggression on Iran, Trump has caused the price of renewables’ competition—fossil fuels—to soar. With the Strait of Hormuz closed for going on seven weeks, the global price of oil is over $100 in much of the world, while liquefied natural gas prices in Asia have roughly doubled.

The price crunch is already so bad that poorer nations in Asia that are heavily dependent on Gulf energy supplies are being forced to ration energy. The Philippines, Sri Lanka, and Pakistan have moved to four-day workweeks to cut commuting, while Myanmar has restricted private driving to alternate days based on license plate numbers. And with no end to the conflict in sight, prices are likely to go much higher, and soon.

All this is sparking a stampede toward renewable energy and EVs around the world. In Britain, solar panel sales were up 78 percent last month, while heat pump sales were up 51 percent. In Germany, orders for heat pumps are surging. Chinese exports of EVs more than doubled last quarter. The French used-car seller Aramisauto reports its EV sales doubled in a month.

Nations that have invested in renewables are seeing them pay off. Germany has increased its solar installations by about 31 percent over the last year alone, according to Bloomberg, and that will reduce its gas consumption this summer by about 29 percent, or nine full-size LNG tankers. Spain is doing even better, with so much solar production that it has largely insulated itself from electricity price spikes afflicting much of the rest of Europe (where gas often determines the market price).

Aftermath

This story first appeared in The American Prospect’s free Aftermath newsletter, a series on the economic consequences of the war in Iran.

While China is suffering as the world’s largest oil importer (for the moment), it is benefiting greatly from its immense investment in renewables, and its position as the unquestioned leader in green technology is more valuable than ever. The global economy of this century will be led by China.

Even in backward, benighted America, market dynamics are turning away from fossil energy. Solar investment has ticked back up, and even five large offshore wind projects got back on track when Interior Secretary Doug Burgum quietly let a deadline lapse in a legal attempt to stop them. Auto traders report a marked increase in inquiries about buying or leasing an EV, particularly in the used market, where EV sales were up 12 percent last quarter. That will undoubtedly increase as gas prices cruise past $5 or more.

I should emphasize that while Trump has sped up the energy transition relative to what was happening before the invasion, it will be immensely painful, disruptive, and even deadly over the short term. To use one example, my colleague David Dayen wrote on Tuesday that plastic is in nearly every consumer product, and almost all of it comes from petrochemical feedstocks.

Worse still, about a third of the global seaborne supply of fertilizer comes through the strait, and the planting season in the Northern Hemisphere has already started. Even if the strait were opened tomorrow, it is already too late in many places; a lot of food is not going to be produced over the next year. Food shortages or even famines may be hitting next fall and spring.

The blocking of the strait will even harm renewable production. Gulf nations also produce a lot of aluminum and steel, which are used in solar panel frames, wind turbines, and EVs. All these new green-energy projects will be quite a bit more expensive than they otherwise would have been.

And in the short term, with oil and gas in short supply, many nations in Europe and Asia are turning back toward coal—the worst fossil fuel in terms of both particulate pollution and climate change—to keep the lights on.

It’s quite the ironic development. Many prior attempts from centrist and liberal governments around the world to reduce carbon emissions by increasing the price of fossil fuels, like with a carbon tax, ended up rolled back in large part because conservatives like Donald Trump screamed bloody murder about raised costs. That’s why the Biden administration settled on a strategy of “all carrot, no stick”—it didn’t jack up the gas tax, for instance, only subsidized EVs. Now Trump, through his signature combination of deliberate malice and murderously stupid incompetence, has created a de facto climate policy of “no carrot, only stick.”

That could end up better than the current trajectory of hurtling toward a fiery future. Governments may recoil from volatility and build an energy system that’s not as reliant on geopolitics and shipping bottlenecks. But in 20 years, America and the world might be in a similar place climate-wise had Kamala Harris been elected, it will just have cost twice as much and caused untold death and suffering along the way. —Ryan Cooper

Links

Saudi Arabia doesn’t like the blockade, for obvious reasons. (WSJ)

The IMF paints a grim picture for global growth as a result of the war. (NYT)

The International Energy Agency calls this the “largest disruption in history.” (Seatrade Maritime)

Iran was able to mostly get all of its oil exports out throughout this war, and with no sanctions as well. (Bloomberg)

The war is leading to a fluoride shortage, because one of the major exporters of fluorosilicic acid is Israel. (Associated Press)

Ryan Cooper is a senior editor at The American Prospect, and author of How Are You Going to Pay for That?: Smart Answers to the Dumbest Question in Politics. He was previously a national correspondent for The Week. His work has also appeared in The Nation, The New Republic, and Current Affairs.

David Dayen is the executive editor of The American Prospect. He is the author of Monopolized: Life in the Age of Corporate Power and Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud. He co-hosts the podcast Organized Money with Matt Stoller. He can be reached on Signal at ddayen.90.