Energy Security 2026: Hormuz & Critical Minerals Race

The 2026 global energy agenda has shifted decisively from affordability to geopolitics. According to the Atlantic Council's sixth Global Energy Agenda, roughly half of survey respondents now identify conflict as the single largest driver of energy disruption—overtaking cost for the first time in years. The Strait of Hormuz crisis and the intensifying critical minerals race have turned energy policy into a front line of the broader superpower contest, forcing nations from Japan to Greece and Ukraine to rewire their security postures.

Why Conflict Overtook Cost as the Top Energy Risk

Even before the February 2026 closure of the Strait of Hormuz, Atlantic Council survey data showed conflict as the primary energy risk, with geopolitical rivalry and underinvestment in infrastructure expected to define risks through 2030. Enverus's 2026 Global Energy Outlook similarly highlights geopolitical shifts in oil markets and increasing strain on power systems as core themes. The convergence of the Iran war, a US intervention in Venezuela, and chronic grid underinvestment has made energy security inseparable from national security.

The Strait of Hormuz: A Chokepoint Becomes a Flashpoint

On February 28, 2026, after US-Israeli airstrikes killed Iran's Supreme Leader, Iran's IRGC closed the Strait of Hormuz. The 21-mile-wide waterway normally carries about 20 million barrels per day—roughly 20% of global oil and 20% of LNG trade. Tanker traffic collapsed by over 90%, oil prices surged from $71 to more than $126 per barrel, and over 150 ships were stranded. Energy security has returned to the top of the global agenda, said analysts at the Atlantic Council's Global Energy Forum, the largest-ever convening of its kind with 1,500 participants from 90 countries. Japan, which relies on the Middle East for 94.7% of its crude imports, has begun backing alternative oil pipelines bypassing Hormuz and accelerating nuclear buildouts.

Critical Minerals: The New Strategic Leverage

Parallel to the Hormuz crisis, control over critical minerals—lithium, cobalt, rare earths, copper—has become a weapon. China controls over 90% of rare-earth processing and more than 60% of refined lithium and cobalt capacity. Export controls imposed in 2025-2026 caused rare-earth prices outside China to surge sixfold, exposing Western vulnerabilities in defense, green energy, and technology supply chains. In response, the US launched FORGE, a 55-country coalition chaired by South Korea, and Project Vault, a $10 billion strategic minerals reserve. The EU's Critical Raw Materials Act targets 10% domestic extraction and 40% processing by 2030. Analysts warn of a narrow 12-18 month window before Western dependencies become structurally entrenched, according to UNCTAD projections of lithium demand rising 353% by 2040.

From Japan to Greece and Ukraine: Rewiring National Strategies

The geopolitical shock is forcing concrete policy shifts. Japan's Cabinet Office has proposed supporting pipelines that bypass Hormuz while maximizing nuclear and renewable energy. Ukraine, which has lost 70% of pre-war generation capacity, signed a strategic LNG corridor with Greece to receive US gas through Alexandroupolis, Bulgaria, and Romania for Winter 2025-2026. Greece is positioning itself as a regional energy hub, while Ukraine targets 14.6 bcm of gas storage against a 13.2 bcm minimum. Underinvestment in grid infrastructure resilience remains a common vulnerability, with Enverus warning of renewable portfolio distress and AI-driven load growth straining power systems.

Impact: Nuclear Buildouts and Fusion Research

The crisis has accelerated long-term investments in nuclear energy and fusion research. The Atlantic Council's 2026 agenda includes dedicated essays on US fusion research and nuclear energy, reflecting a shift toward sovereign, low-carbon baseload power. Japan's revised energy plan explicitly prioritizes nuclear alongside renewables, while the EU pushes for 2,450 MW of import capacity for Ukraine. These moves signal that energy security is no longer about cheap fuel but about strategic energy independence in an era of weaponized interdependence.

FAQ: Energy Security in 2026

What is the Strait of Hormuz and why does it matter?

The Strait of Hormuz is a 21-mile-wide chokepoint between the Persian Gulf and the Gulf of Oman. It normally carries about 20 million barrels of oil per day, or 20-25% of global seaborne petroleum and 20% of LNG. Its closure in February 2026 triggered the largest energy supply disruption since the 1970s.

How did conflict overtake cost as the top energy risk?

Atlantic Council survey data from late 2025 showed roughly half of respondents citing conflict as the greatest driver of energy disruption, surpassing affordability concerns. The Iran war and US intervention in Venezuela confirmed this shift in early 2026.

Which critical minerals are most strategic in 2026?

Lithium, cobalt, rare earths, and copper are critical for batteries, EVs, defense systems, and grid technologies. China dominates processing, controlling over 90% of rare earths and 60%+ of lithium/cobalt refining.

How are Japan and Ukraine responding to the energy crisis?

Japan is backing bypass pipelines and expanding nuclear power. Ukraine has secured US LNG through a Greece-Bulgaria-Romania corridor and is rebuilding storage, though it still faces a 6.3 GW generation deficit.

What role does fusion research play in energy security?

Fusion offers a potentially limitless, geopolitically neutral energy source. The US and other nations are increasing fusion research funding as a hedge against fossil fuel chokepoints and critical mineral dependencies.