war in the middle east: Since the US and Israel went to war against Iran in late February, many analysts have suggested how the conflict could benefit Russia. With the Strait of Hormuz closed and global energy markets in chaos, countries can increasingly rely on Russia to meet their energy needs and import their oil to circumvent sanctions imposed on them. Now it seems that other countries are also benefiting from the war.
According to a CNN report, Beijing’s electric vehicle (EV) manufacturers could benefit from the worst oil crisis in history. The three-week war has disrupted supplies of fossil fuels from the Middle East, sending oil prices soaring to $119 a barrel last week.
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The report suggests that the crisis could not have come at a better time for Beijing’s electric car industry. While the country exports and manufactures more electric cars than any other country, electric car makers have faced tougher price competition and slowing growth at home. Chinese EV brands are under enormous pressure to find other markets.
Cheaper electric cars and higher gasoline prices are helping China’s industry
With electric vehicles now becoming cheaper and gasoline prices higher than pre-war levels, the combination is likely to fuel the global expansion of the EV industry, especially in Asian countries bearing the brunt of fuel shortages, CNN reported, citing analysts.
Tu Le, chief executive of automotive consultancy Sino Auto Insights, told CNN: “Chinese brands have the potential to penetrate Asia thanks to higher gasoline prices,” adding that he would like to see the brands take full advantage of the situation.
In a recent report, energy think tank Ember described electric cars as the “biggest lever to reduce import bills” and estimated that their use last year reduced global oil consumption by 1.7 million barrels per day, roughly 70% of Iran’s exports in 2025.
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Asia is heavily dependent on oil imports
Despite growing investment in renewable energy across Asia, the three-week conflict in the Middle East has underscored the region’s continued dependence on oil imports. Roughly 60% of Asia’s oil supplies come from the Middle East through the Strait of Hormuz, where Iran has severely restricted cargo flows.
Will the oil crisis serve as a turning point for Asia?
Analysts suggest the ongoing oil crisis could serve as a tipping point for Asia’s clean energy industry, similar to the way Russia’s invasion of Ukraine in February 2022 led to renewable energy investment in Europe.
Once fuel prices rise in a low-inflation environment, consumers may balk, said Lauri Myllyvirta, principal analyst and co-founder of the Center for Energy and Clean Air Research. But the second increase could serve as a wake-up call to reinforce how volatile prices are and how reliance on gasoline vehicles leaves people vulnerable to those swings.
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China’s shift toward renewable energy has paid off
For Beijing, which gets more than 40% of its oil from the Middle East region, the shift to renewable energy has clearly paid off. With the largest oil reserves in the world and a leading position in wind and solar energy production, China is more protected from an energy crisis than other Asian countries.
Analysts estimate that the move cut its oil consumption by at least 10% last year since Beijing rolled out electric cars, which account for more than 50% of its new car sales and about 12% of all registered vehicles.
“From China’s perspective, this scenario is exactly what was in the back of their minds when they were implementing their energy security strategy,” the analyst said.
It remains to be seen whether China’s electric car industry will use it to spark a clear energy shift in Asia, or whether its ambitions will remain unfulfilled.
