Oil crisis could trigger $4 trillion in fresh renewable energy investment

• Sustained oil prices above US$100 a barrel could unlock an additional $4 trillion in renewable energy investment
• Hydrogen trucks and battery swapping offer alternatives to diesel in Australia’s road freight sector
• Waste-to-energy, solar and battery projects could strengthen domestic energy supplies and reduce reliance on imported fuels

In the eight months since the US and Israel unleashed a barrage of airstrikes against Iran and triggered a full-blown oil crisis, the fallout has been both epic and furious.

Oil spiked from about US$70 a barrel to more than US$100, where it has hovered for months as the conflict around the Strait of Hormuz continues to disrupt energy markets.

Global supply chains for fertiliser, aluminium, helium, methanol, and sulphur have all been deeply impacted.

The breakdown in shipping through the Strait is compounding skyrocketing fuel prices with yet more inflationary pressure.

“The shock is global, yet asymmetric,” the International Monetary Fund said in a March blog post.

“Energy importers are more exposed than exporters, poorer countries more than richer ones, and those with meagre buffers more than those with ample reserves.

“Although the war could shape the global economy in different ways, all roads lead to higher prices and slower growth.

“Much depends on how long the conflict lasts, how far it spreads, and how much damage it inflicts on infrastructure and supply chains.”

Thankfully, the global economy is already responding to the damage caused by the war.

Governments have rolled out fuel subsidies and tax exemptions, intervening directly in power markets even as solar installations surge to record highs across the globe.

Demand for gasoline is easing as electric vehicle and hybrid uptake rises globally, while oil producers the world over accelerate production and refinery efforts both within and outside of the Middle East.

Other countries are rapidly reinventing their energy mixes, ramping up local sovereign production through alternative fuels, biogas generation and aggressive renewable energy investment.

$4 trillion surge in renewable investment

Petrol-only vehicles accounted for just 49% of automobiles sold in the first half of 2026, while hybrids and EVs together accounted for a full 35% of car sales. For the first time in history, petrol-only cars failed to account for a majority of sales.

Governments, institutions and consumers alike are actively decoupling from hydrocarbon-based power, electrifying at an even greater pace as high oil prices make the economic case for renewables all the stronger.

A report from global consulting and corporate advisory firm WMSJ predicts that transition will continue to accelerate if oil prices remain above US$100 a barrel – a level Brent futures have hovered above since late September.

WMSJ reckons an extended oil crisis at these levels could unlock an additional $4 trillion in renewable energy investment between 2025 and 2030.

“The global oil market is increasingly defined by the tension between immediate supply security and the long-term strategic shift toward domestic energy independence,” WMSJ founder and CEO Waseem Hoeneini said.

The report outlines a compelling cost-based argument for front-loading investment, predicting savings of up to $1.5 trillion for energy-importing economies in cumulative oil and gas bills alone by 2030.

The global economy has been given a strong new motive to pick up the pace in the race to electrify power grids, decarbonise transportation sectors and reclaim sovereignty over energy production.

Ending diesel dependence

One of the biggest knock-on effects of high oil prices isn’t just high fuel prices, but also much higher transportation and freight costs to move just about anything.

Australia is particularly exposed to high diesel prices due to its heavy reliance on long-haul road freight, with more than 75% of non-bulk domestic freight carried by road.

Road freight trucks run almost exclusively on diesel, with heavy vehicles accounting for about a quarter of Australia’s transport emissions.

The long distances required for Australia’s road freight system mean it’s not as simple as chucking an electric battery in a truck and calling it good – weight, distance and recharge times combine to make plug-in EV trucks a logistical nightmare.

Instead, multiple renewable energy-focused freight companies are turning to hydrogen and purpose-built swappable batteries as alternatives to diesel.

Swappable batteries can reduce transport delays from up to an hour and a half to just five minutes, removing the need to wait for recharging by simply replacing the battery on the spot.

Multiple paths to electrification

Australia’s road freight problem is prompting several different approaches, from battery swapping to hydrogen fuel cells.

Pure One Corporation (ASX:P1E), Janus Electric (ASX:JNS) and TSX Venture- and FSE-listed First Hydrogen are all making plays in the electrification and hydrogen freight space.

Pure One has opted for a fully integrated solution, offering a combination of heavy and light commercial and passenger vehicles alongside battery exchange and hot-swap infrastructure.

The company has already inked three agreements with Australian auto dealers in Brisbane, Sydney and Western Australia, with plans to expand to 10 by mid-2027.

P1E is also developing hydrogen fuel cell trucks, which have been deployed as part of a household kerbside waste and recycling collections test.

Waste management company Solo will evaluate the rear and side-loading hydrogen fuel cell waste trucks through its contracted services for Cessnock, Maitland, Singleton and Lake Macquarie councils.

Janus Electric is taking a slightly different tactic, converting diesel trucks to battery power and pairing them with its Charge and Change battery swap offering.

The company has already converted some 28 trucks and completed more than 4,000 battery swaps across its 11 Charge and Change stations nationally.

First Hydrogen’s horizon is a little further in the distance – the Canadian company is building out an integrated business model spanning robotics, hydrogen production, hydrogen-powered mobility stations and fuel cell vehicles.

The company plans to produce its own green hydrogen to fuel its fleet of fuel cell electric vehicles and supply its grid-based charging solutions independently.

First Hydrogen has completed about 10,000 kilometres of real-world testing for its trucks on UK roads, but it will be some time before it can establish a supply chain and fully integrated infrastructure.

Replacing diesel altogether

While electrifying long-haul and freight trucks will help reduce Australia’s dependence on foreign energy sources, some heavy transport and industrial uses will remain difficult to electrify. That leaves room for another approach: replacing diesel and other fossil fuels with lower-carbon alternatives derived from waste.

One potential solution is to generate lower-carbon alternatives to diesel and other fossil fuels using waste streams as feedstock.

Biogas has emerged as a promising solution, evolving from a niche industry into a mainstream energy market as global economies invest billions in its expansion.

Across Europe alone, €36 billion has been committed to expanding biomethane capacity. The EU aims to produce 35 billion cubic metres of biomethane by 2030.

Biomethane can be generated in several ways, but the most popular method is anaerobic digestion, where biodegradable matter is broken down by microorganisms to produce biomethane, carbon dioxide and fertiliser-rich digestate.

Companies like Optimal Renewable Gas, LGI (ASX:LGI) and Delorean Corporation (ASX:DEL) are already building out Australia’s nascent biogas industry.

Optimal Renewable Gas and Delorean are both using anaerobic digestion technology to convert organic waste into biogas.

Delorean just secured an operational licence for its SA1 Salisbury Bioenergy Project, which will process 70,000 tonnes of organic waste a year from metropolitan Adelaide’s commercial, industrial and municipal sectors.

Delorean says SA1 will produce 210 terajoules of renewable gas and 6000t of biogenic food-grade liquid carbon dioxide annually.

LGI is instead using landfill gas infrastructure to harvest the gases escaping from Australian waste sites, with the goal of capturing and harnessing harmful methane emissions.

LGI believes that, of the 1,100 operational landfills in Australia, more than 200 could be suitable for its biogas capture technology.

Cheaper, cleaner electricity

The lack of electrification infrastructure is a major stumbling block for renewable energy investment and uptake.

In Australia, the federal government has taken an active hand in encouraging the build-out of that infrastructure, seeking to underwrite 40GW of renewable generation and clean dispatchable capacity via competitive tenders and investing about $500 million in regional clean energy hubs.

One such investment is Frontier Energy’s (ASX:FHE) Waroona Renewable Energy project, which has secured both state and federal funding to support its development in Western Australia.

FHE is targeting 132 megawatts of solar energy generation, complemented by 81.5 megawatts of battery storage.

Under the Capacity Investment Scheme, the Australian federal government will guarantee the Waroona operation maintains a minimum revenue level, providing a safety net if net market revenues fall below an agreed level.

The idea is to reduce risk for investors and encourage rapid investment in renewables while also gaining upside to potential economic success – the scheme also involves a ceiling, where projects will pay a share of revenue back to the government if they exceed an agreed upper limit.

The government has selected more than 100 clean energy and storage projects across Australia to support via the scheme.

“The Capacity Investment Scheme is delivering cheaper, cleaner and more reliable electricity to power our homes and businesses for decades to come,” Assistant Minister for Climate Change and Energy Josh Wilson said.

“At a time when we’re all feeling the pinch from volatile fossil fuel markets, these investments are more important than ever, and, as demonstrated by the quality and volume of bids, the market is responding to the stability the CIS offers.”

The longer the oil crisis runs, the stronger the incentive to bring energy production closer to home.

Turning that urgency into operating projects will take sustained investment, but expanding domestic energy production and reducing diesel dependence will leave Australia better prepared when the next international conflict, global shipping disruption or catastrophic supply shortage arrives.

At Stockhead, we tell it like it is. While Pure One Corporation, Delorean Corporation and Frontier Energy are Stockhead advertisers, they did not sponsor this article.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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