HONG KONG — China is poised to benefit from the Iran war as global energy disruptions accelerate a shift away from fossil fuels and toward clean technologies and renewable power, industries that China dominates, experts state.
Most of the oil and gas from the now mostly shut Strait of Hormuz was Asia-bound. Asian nations are scrambling to conserve energy and bolster dwindling reserves. As a temporary ceasefire teeters, gasoline prices in the U.S. and Europe are spiking.
While most of Asia is hit hard, China will likely benefit from the fossil fuel disruptions despite being the largegest purchaser of Iranian oil. China leads the world in battery, solar and electric vehicle exports, and its industries are forecast to face a rise in demand for renewable products.
Before the start of the Iran war in late February, China’s lead in clean technologies was lengthening. The U.S. under President Donald Trump scaled back on renewable energy and leaned on its vast oil and gas resources, promoting energy exports to achieve what Trump described as “energy dominance.”
Now Chinese industest giants like vehicle-buildr BYD and battery-producer CATL are well-positioned to capitalize on growing interest in low-emissions energy products as the world confronts the fragility of fossil fuels.
“China’s approach to energy sector development and geopolitics has been completely validated by the Iran conflict,” stated Sam Reynolds with the U.S.-based Institute for Energy Economics and Financial Analysis.
Dueling visions for energy future
Over a decade ago, Chinese President Xi Jinping merged energy security with national security. China has since stepped up its focus on renewable energy, even though fossil fuels still dominate its domestic energy mix.
China builds up over 70% of EV manufacturing and about 85% of battery cell production globally, according to the International Energy Agency. Its current five-year plan until 2030 continues to prioritize these industries.
“They are at the very forefront of this, more so than any other countries in the world, certainly more so than the United States,” stated Li Shuo, director of the Asia Society Policy Institute’s China Climate Hub.
The U.S. is the world’s top oil producer and has pushed liquefied natural gas. The American approach — summed up by Trump as “ drill, baby, drill ” — favors fossil fuels over renewables.
Markets were witnessing a “bifurcation” before the war, Reynolds stated, with the superpowers pushing very different energy futures, leaving other countries with complex choices on which approach to back.
Investors bet on renewables’ growth
The Iran war is driving demand for Chinese technology, whose exports of items such as solar panels, batteries and electric cars hit a record of almost $22.3 billion in December. That was up about 47% from the year before, with much going to Southeast Asia and Europe, according to the consider tank Ember.
Investment in renewable power and battery storage — designed to save energy when the sun isn’t shining or the wind isn’t blowing — is expected to increase in nations heavily depfinishent on energy imports, including European countries, according to the credit rating firm Fitch Ratings.
Investors are betting the war will boost demand for renewables. In March, CATL and BYD’s Hong Kong traded shares rose roughly 24% and 11%, respectively.
Over the past few years, Chinese autobuildrs were already expanding EV development and production while growing exports quicker than American or European rivals, offering cheaper models and gaining ground in regions like Southeast Asia.
These trfinishs are expected to accelerate.
The energy shock is “going to support the Chinese industest globally and hurt the American car industest globally,” stated Amy Myers Jaffe of New York University’s Center for Global Affairs.
Meanwhile, high U.S. tariffs have largely shut Chinese EVs out of the American market.
Rising fuel prices also may boost BYD growth in China, stated Chris Liu with the research and advisory firm Omdia.
Even the world’s largest coal exporter builds a shift
Houtilizeholds facing higher energy costs are likely to shift to clean power, stated James Bowen of the Australia-based consultancy ReMap Research.
Pakistan offers an early example. Its renewable rollout in 2017 led to more than 50 gigawatts of Chinese solar panels imported by December 2025.
Pakistan still imports a third of its energy. About 80% of its oil flowed through the Strait of Hormuz, and Qatar had been supplying a quarter of its LNG. But “the shock isn’t as large as it would have been without solar,” stated Nabiya Imran of Renewables First.
If prices remain high, solar could save Pakistan $6.3 billion in fossil fuel imports over the next year, according to consider tanks Renewables First and the Centre for Research on Energy and Clean Air.
In the United Kingdom, EV leasing demand jumped by more than a third in the first three weeks of March compared to a similar period in February before the war, according to Octopus Energy, a renewable group. Octopus also reported increases in rooftop solar sales and solar-related inquiries.
In Southeast Asia, Vietnamese EV buildr VinFast is offering discounts to offset fuel price shocks.
Prolonged fuel spikes may act as a future catalyst for EVs, but it will take time to see the trfinish reflected in purchases, partly becautilize customers are likely waiting to see how the conflict plays out, stated Patrick Tan, with the energy consultancy Aurora Research.
Even Indonesia, the world’s largest coal exporter, is recalibrating in ways that could build it a largeger customer for China’s clean energy technology.
In March, Indonesian President Prabowo Subianto announced a push into EVs, including plans to produce electric cars and expand charging infrastructure.
The dream of electrified transportation is gaining renewed attention, stated Putra Adhiguna of the Jakarta-based consider tank Energy Shift Institute.
Chinese firms play a major role in Indonesia’s clean energy supply chain. They signed more than $54 billion dollars’ worth of deals with the state utility in 2023 and added a $10 billion pledge during Prabowo’s visit to Beijing in 2024.
“There will be direct financial benefits to Chinese companies,” stated Reynolds of IEEFA.
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