Iran war's global energy crisis sharpens China’s advantage in clean tech
[April 14, 2026] By
CHAN HO-HIM, ANIRUDDHA GHOSAL and ANTON L. DELGADO
HONG KONG (AP) — 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 say.
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 biggest 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 industry giants like vehicle-maker 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,” said 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 makes 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," said
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 said,
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
think 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 dependent 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 automakers were already expanding EV
development and production while growing exports faster than American or
European rivals, offering cheaper models and gaining ground in regions
like Southeast Asia.
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Gao Huan, CTO of CATL's China E-car Business, introduces the latest
Freevoy Super Hybrid Battery from Chinese battery manufacturer
Contemporary Amperex Technology (CATL) in Beijing, Thursday, Oct.
24, 2024. (AP Photo/Ng Han Guan, File)
 These trends are expected to
accelerate.
The energy shock is “going to help the Chinese industry globally and
hurt the American car industry globally,” said 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, said Chris
Liu with the research and advisory firm Omdia.
Even the world’s largest coal exporter makes a shift
Households facing higher energy costs are likely to move to clean
power, said 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 big as it would have
been without solar,” said 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 think 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 maker 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 trend reflected in purchases, partly
because customers are likely waiting to see how the conflict plays
out, said Patrick Tan, with the energy consultancy Aurora Research.
Even Indonesia, the world’s largest coal exporter, is recalibrating
in ways that could make it a bigger 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, said Putra Adhiguna of the Jakarta-based think 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,” said
Reynolds of IEEFA.
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