From Fossil Fuels to Nuclear: How the Iran War is Shaping Global Energy Strategies

The escalating war with Iran is battering global energy markets and sustainability.

Investors are feeling the macro fallout beyond just fossil fuels, with destroyed Middle Eastern infrastructure threatening to reignite inflation.

Global central banks are being forced to backtrack on rate cuts, and that higher cost of capital is acting as a massive headwind for capital intensive renewable energy projects.

Yet this Crisis is also accelerating a global scramble for energy security, forcing nations to choose very different paths between domestic fossil fuels, a green pivot, or even nuclear power.

Well joining me to break all of this down is Jeff Gitterman, managing director for Gitterman Asset Management.

Jeff, great to have you here.

Thank you so much for joining me.

Thanks for having me.

Well, here we are.

We are kicking off the second quarter of 2026.

And our focus has been on the Middle East.

But given the implications of this conflict both in the short term, medium term, as well as long term, what does it mean for renewable energy?

So the issue with renewable energy is that it's very cost intensive upfront, so it demands a lot of interest rate sensitivity.

Unlike oil, where there's a lot of ongoing costs with oil that are built into it, the cost of getting the fuel out of the ground and shipping. and moving it around, that's not the same case with renewables.

So those upfront interest rates when you're trying to do new projects are critical to keeping renewable energy affordable.

And as we're seeing inflation is peaking.

We're having a lot of slowing, not just pipeline through the Strait of Hormuz, but we're also having fertilizer issues.

So food prices are going to be going up.

We're looking at 3 to 3.5.

Inflation probably by the end of this year that will probably start to drive interest rate hikes.

That's all a negative for the renewable energy sector.

And when we think about costs, rates do factor into this equation when it comes to renewable energy.

So what does it actually mean for projects, especially given the fact that these higher for longer oil costs could affect inflation.

So really what people are looking at now are people in different countries is where do we put our investment dollars into that gives us the most energy security and the best cost.

So it's not just a cost issue, it's also now energy security, global security has become a huge issue.

Some countries are pivoting like India towards adding much more nuclear.

They just did a big deal with Kimiko, that $2.6 billion deal.

So you're seeing nuclear, which is again.

A lot of upfront costs, but then once those costs are sunk in, they are producing energy for much longer and at cheaper rates.

So it's going to be a battle between where interest rates go and where energy security is a priority as to where these countries start to pivot.

In the United States, we've backed off from most of our climate initiatives, so we're looking at more fossil fuel development, more oil drilling, more nuclear, very low on.

So even projects that have to get off the ground aren't going to have government backing.

Interest rates will be a huge roadblock for those projects getting off the ground in the US and you highlighted what the landscape looks like for nation states around the globe.

And when we're talking about reliable energy, I think when we get a geopolitical conflict like this, this really becomes the issue at the forefront.

So what does this mean when it comes to Well, you're seeing countries like Pakistan and other countries and China especially deploy tons of renewable energy because at the end of the day you don't have to rely on any supply chains once you've got those renewable energy in place.

So I'm not sure why we're giving up on it in the US because it is a huge defensive measure.

The Secretary of Defense in Ukraine said if you want reliable, dependable global energy security, use.

It takes a lot of missiles to take out a solar field.

It takes one to take out a nuclear reactor or a gas field.

So I think we're just going to see pivots based on where the politics is, where the interest rates are, and where global security is driving the factors.

And finally, Jeff, before I let you go, for American investors who do want to invest in green energy, how can they safely do this right now?

You're looking at projects, smaller projects where utilities are on their own trying to add solar and backup generators and renewable batteries into the utility.

Those deals are probably the safest.

They are very short term, pretty liquid investments backed by the receivables of the utilities supporting these utilities to do more.

Offsets.

That's really the place to go right now.

And finally, before I let you go, we have about 60 seconds here, so we continue to see headlines about what's happening in the Middle East in terms of the conflict.

So tell us about the environmental impact.

The environmental impacts are horrible.

If you look at Iran, we blew up all these oil fields.

We are seeing toxic.

Rain coming down over Tehran that has an impact on the global atmosphere.

Also just the overall general pushback on renewables is going to have a longer term track record on the climate, so war is never positive for the climate unfortunately, and it's just going to exacerbate the problems that we're already dealing with.

Well Jeff, always wonderful to have you here.

Thank you so much for joining me and thank you so much for weighing in.

Thanks for having me.

Thank you.