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Clean energy stocks gain in value during Iran war
The US-Israel invasion of Iran in February 2026 has accelerated the global transition to clean energy as 23 countries announced new measures to reduce fossil fuel vulnerability. Clean energy ETFs have outperformed oil and gas ETFs in early May 2026, with renewable energy funds attracting over USD 3 billion in April 2026. Investor sentiment is shifting, with a rise in those ranking renewables top for one-year returns (14% vs 9% in 2025) and a decline in the perceived necessity of natural gas for the transition, particularly in Asia. While the cost of capital remains significantly higher in emerging markets (12.95%) compared to Europe (5.02%), geopolitical instability is prompting a reassessment of risk premiums in favor of domestic renewables.
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Document type: Briefing