How the Iran conflict has reshaped energy resilience

This article was originally published on RSM US.

The conflict in Iran—and the resulting disruption of oil, liquefied natural gas (LNG) and other refined products moving through the Strait of Hormuz—has had implications that go well beyond short-term commodity price swings and logistical bottlenecks. The strait is a critical global energy choke point; in 2024, roughly 20 million barrels of oil per day flowed through it on average, about 20% of global consumption.

We anticipate long-term, structural impacts on countries’ and companies’ strategies around energy supply, resilience and supply chains.

Energy source priorities are shifting

Significant growth in power demand, from data centers and elsewhere, was already shifting priorities for the energy generation mix and decarbonization. The North American Electric Reliability Corp.’s 10-year outlook projects North America’s summer peak demand will rise by over 15% (more than 122 gigawatts) over the next decade.

Data center hot spots like Texas may see peak demand quadruple by 2032, driving power growth across all available sources. This supply shock will intensify questions about energy availability, which regions to depend on for supply, and which fuels and technologies best balance cost, carbon intensity and reliability.

Energy independence increasingly correlates with energy security and national security, and over the last decade, investments in oil and gas have made the U.S. the largest producer of oil and natural gas in the world. Recent energy risks in North America are more closely tied to growing electricity demand and the ability to quickly bring new power generation online. In this environment, access to reliable power is increasingly becoming a gating factor for growth.

Energy cost, availability and carbon intensity remain central priorities for energy companies and large-load customers alike, but supply chain resilience and a broader energy source mix have also become more important in recent years. Now, in light of the conflict in Iran, the issue of energy security has shot to the top of the list, and different parts of the world will have varying approaches to tackling that issue. Regions like North America that are rich in fossil fuels may lean harder on domestic oil, gas or coal. Regions like Europe, which imported 58% of its energy in 2023, and some emerging countries may accelerate their adoption of renewables, revisit natural gas contracts or extend the use of coal, depending on what they see as reliable, financeable and politically durable.

The LNG disruption from the recent shutdown at the Ras Laffan plant in Qatar and the closure of the Strait of Hormuz is a clear example of how the conflict is affecting the flow of resources. In 2024, approximately 19% of global LNG export capacity came from Ras Laffan, with about 83% of that volume going to Asian markets, according to the U.S. Energy Information Administration. As regional supply is constrained, Asian and European customers have bid for U.S. cargoes and may continue to shift purchases toward U.S. producers. Some buyers may also accelerate alternatives (renewables, nuclear, coal or demand reduction) to reduce exposure to imported LNG.

Energy-intensive companies will evaluate not just low-carbon power preferences, but what backup fuel and on-site flexibility they can secure. Industrial firms will revisit whether to electrify processes or continue using direct fuel where reliability and cost matter most. Utilities are already balancing energy reliability, affordability and emissions, and the growing importance of resilience will add another factor to those trade-offs. Oil and gas companies across the value chain will face divergent investment choices for new production, midstream operations, storage and export capacity.

Increased awareness of concentration risk

Although North America has been somewhat insulated from the direct effects of the Iran conflict, its supply chains have still been disrupted, and companies can’t reverse the impacts. As a result, many will reexamine critical inputs—energy, raw materials and key vendors—for concentration risk and assess where they may be able to mitigate the effects or choose to accept them.

Supply chains have grown more complex, with companies’ supplier and customer relationships growing ninefold on average between 2009 and 2024, RSM noted in a recent report on business complexity. Companies’ responses to this complexity have varied; some have expanded their supply chain teams, while others have consolidated vendors to simplify. Neither approach is inherently right or wrong, but leaders must be explicit about the risk trade-offs.

For example, the manufacturing of chips, batteries and other advanced products is vulnerable to a heavy concentration of mineral processing. The International Energy Agency’s Global Critical Minerals Outlook 2025 estimated that China refines roughly 70% of the world’s strategic minerals, including over 90% of natural graphite and rare earth elements.

That share is projected to remain near 82% in 2035 absent a decisive policy and capital response. For companies choosing electrification as a key part of their strategy, they trade one constraint for another. The choke point is no longer the wellhead or pipeline—it is the refinery, the smelter or the magnet plant.

Resilience comes with a price tag

North America has spent the better part of a decade talking about energy independence, but the conversation is now about energy resilience—a subtle but important shift in how regions frame energy-related risk. While independence is about whether a country depends on other countries for various energy sources, energy resilience is about whether a country can keep operating when other parts of the world stop cooperating in supplying those energy sources. Two major geopolitical-related energy supply shocks in the past five years—first the Russia-Ukraine conflict and now the one in Iran—have underscored this.

Diversifying fuels, contracting for flexibility and storing more energy locally will increase costs, and these costs are likely structural, not cyclical. At a time when margins are tighter and energy affordability is already top of mind, the shift from a “just-in-time” to “just-in-case” energy supply will lift baseline operating costs through higher capital expenditures, redundancy and larger inventories. Companies will absorb part of this cost burden through lower margins, and customers will bear the rest via higher prices.

Supply shock implications for middle market energy companies

The structural changes underway as North America shifts to prioritizing energy resilience—in terms of the energy source mix, concentration risk and higher costs—will outlast the recent headlines.

Middle market companies will feel this shift differently than larger companies will. Midsize organizations often have less leverage to negotiate energy pricing, sit deeper in supply chains where bottlenecks show up in non-substitutable components, feel the hit in margins sooner and have fewer mitigation levers to pull.

Results from the RSM US Middle Market Business Index survey in the second quarter of 2026 show that many companies experienced side effects of the Iran conflict. Far fewer, however, took key actions to respond, making it a potential advantage for those who do.

As companies factor these shifts into plans for the coming years, leadership teams might consider:

• Making energy procurement a strategic risk decision: Treat power and fuel buying as a strategic and risk management decision, and shift toward multiyear agreements where possible for stability. Similarly, update supplier/customer contracts with index-linked, pass-through provisions so energy price volatility doesn’t fully land in your margins.

• Budgeting explicitly for resilience: Plan for resilience-related costs by stress-testing capex and operating plans using higher-for-longer energy costs and longer lead times, and by budgeting for the few investments (backup power, storage, higher inventories) that can keep critical operations running in an energy or supply squeeze.
• Preparing to operate through disruption: Create a playbook that can guide the organization through disruptions such as likely constraints of material products, critical resources and key vendors. This playbook might identify curtailment triggers, line up alternative logistics and supplier escalation paths, and test those triggers and alternatives with periodic tabletop exercises.

The constraints and uncertainties felt by companies and countries through this conflict will not be easily forgotten. Companies deploying capital with multiyear consequences should plan now. Smart investments in resilience can become a durable advantage.