LONDON/HOUSTON/SINGAPORE, April 08, 2026 (GLOBE NEWSWIRE) -- INSIGHT FOR IMMEDIATE RELEASE
Wood Mackenzie | www.woodmac.com
LONDON/HOUSTON/SINGAPORE, April 8, 2026 – Prolonged disruption to Middle East energy supplies could accelerate a structural shift in global energy systems, halving oil and gas import dependence by 2050 and reducing oil demand by 20% and gas demand by 10% relative to the base case. As countries prioritise energy security, demand is increasingly met through electrification, renewables, coal and nuclear, while reliance on globally traded fuels declines, according to Wood Mackenzie.
However, this shift comes with trade-offs. Energy systems become more domestic and diversified, but also more costly, while near-term emissions rise due to increased coal use before converging with the base case over the longer term. These findings are based on a new conflict scenario from Wood Mackenzie, part of its Lens Energy Transition Scenarios, which explores how sustained geopolitical instability could reshape global energy demand, supply and investment through 2050.
Crisis-driven disruption, long-term transformation
The scenario assumes a major geopolitical escalation beginning in early 2026, disrupting 15–20% of global oil and LNG supply. In the near term, oil demand falls by around 9% due to supply outages before recovering to pre-crisis levels by 2030, Wood Mackenzie noted.
Beyond 2030, structural shifts take hold as countries accelerate efforts to reduce reliance on imported fuels. Oil and gas demand declines more rapidly than in the base case, as governments prioritise domestic and diversified energy systems.
“Geopolitical crises can act as powerful catalysts for long-term system change,” said Prakash Sharma, Vice President, Scenarios & Technologies at Wood Mackenzie. “In this scenario, the world moves decisively towards energy independence, with lasting implications for global fuel demand and trade.”
Electrification and efficiency at the core
Electrification and efficiency emerge as the primary pathways to energy independence. Overall power demand remains broadly in line with the base case, as lower demand from electrolytic hydrogen production is offset by wider electrification across transport, buildings and industry.
This shift reduces reliance on imported fuels while maintaining overall energy service demand.
A rebalanced energy mix
By 2050, the global energy mix shifts significantly under the conflict scenario:
- Oil demand falls 20% and gas 10%, while coal rises 20% as countries diversify supply and prioritise domestic resources
- Nuclear generation increases 40% above the base case, with both conventional and next-generation technologies scaling from the 2030s
- Renewables continue rapid expansion, forming the backbone of domestic power systems
- Hydrogen and carbon capture adoption declines, as policymakers favour more efficient and secure energy pathways
“Energy systems become more local, more diversified and less reliant on complex international trade,” said Jom Madan, Principal Analyst, Scenarios & Technologies. “Electrification and nuclear take priority, while hydrogen and carbon capture are deprioritised due to cost, efficiency and security considerations.”
Near-term coal, long-term nuclear
Coal plays a larger role in the near term as countries respond to supply shocks by maximising domestic energy sources and delaying plant retirements. Over the longer term, nuclear expands significantly, providing stable, fuel-secure baseload power as new capacity comes online from the 2030s.
Gas-fired power and hydrogen-based abatement pathways are scaled back as energy systems favour more secure and proven alternatives.
Security comes at a cost
The shift towards energy independence comes with higher system costs, as countries move away from globally optimised supply chains towards domestic production and diversified sourcing.
“Energy independence reduces exposure to external shocks, but it comes at a structural cost premium,” said Lindsey Entwistle, Principal Analyst, Scenarios & Technologies. “This creates new competitiveness challenges for energy-intensive industries, while advantaging more self-sufficient regions.”
Climate outcomes converge
Despite diverging pathways, cumulative emissions under the conflict scenario remain broadly aligned with Wood Mackenzie’s base case, tracking a 2.6°C warming trajectory. While emissions rise in the near term due to increased coal use, these are offset over time by stronger electrification and nuclear deployment.
“The scenario reaches a similar emissions outcome through a different route,” Sharma concluded. “It reflects a trade-off between near-term energy security and long-term decarbonisation, with countries ultimately relying on proven, domestically controlled technologies.”
-ENDS-
For further information please contact Wood Mackenzie’s media relations team:
Chris Boba
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Chris.Boba@woodmac.com
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Mark.thomton@woodmac.com
Hla Myat Mon
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hla.myatmon@woodmac.com
Angelica Juarez
angelica.juarez@woodmac.com
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