China’s potential gains from the Iran war are tied to how energy disruptions ripple through global markets, according to experts cited by the Associated Press. They said the conflict has accelerated a shift away from fossil fuels and toward low-emissions technologies—particularly in industries where Chinese companies already dominate manufacturing and exports.
The starting point, experts said, is geography and supply. The AP report said most of the oil and gas from the now mostly shut Strait of Hormuz was headed to Asia, and that many Asian countries are now scrambling to conserve energy and bolster dwindling reserves. With a temporary ceasefire “teetering,” the report said gasoline prices in the United States and Europe have spiked as well.
While most of the region’s energy strain falls elsewhere, the experts argued that China could still benefit from the disruption. The AP report said China is likely to see demand for fossil-fuel alternatives rise despite also being the biggest purchaser of Iranian oil. It added that China leads the world in battery, solar and electric vehicle exports, and that renewable-focused industries are forecast to face higher demand.
The AP report framed that momentum as an extension of a longer-running strategic split between major powers. It said Chinese President Xi Jinping previously merged energy security with national security and that China has stepped up its focus on renewables even though fossil fuels still dominate its domestic energy mix. It also described China as accounting for “over 70% of EV manufacturing and about 85% of battery cell production globally,” citing the International Energy Agency, and said the country’s five-year plan to 2030 continues to prioritize those industries.
In contrast, the report said the U.S. under President Donald Trump scaled back renewable energy and leaned on the country’s oil and gas resources, promoting energy exports in what Trump described as “energy dominance.” Sam Reynolds of the U.S.-based Institute for Energy Economics and Financial Analysis said: “China’s approach to energy sector development and geopolitics has been completely validated by the Iran conflict.”
The AP report said investors are already reacting to the prospect of higher demand for renewable products. It reported that exports of solar panels, batteries and electric cars hit a record of almost $22.3 billion in December, up about 47% from the year before, with much of the shipment going to Southeast Asia and Europe, according to Ember. It also said Fitch Ratings expects investment in renewable power and battery storage—meant to preserve energy when sun or wind is unavailable—to increase in countries that rely heavily on energy imports, including European ones.
Market moves cited in the report suggested renewed attention from traders as well. It said that in March, CATL and BYD’s Hong Kong-traded shares rose roughly 24% and 11%, respectively. In addition, the report said Chinese automakers have been expanding electric vehicle development and production while growing exports faster than American or European rivals in regions such as Southeast Asia.
Amy Myers Jaffe of New York University’s Center for Global Affairs said the conflict’s effects could tilt competitiveness across industries. She told AP: “The energy shock is ‘going to help the Chinese industry globally and hurt the American car industry globally.’” Other analysts cited by AP pointed to potential growth inside China as rising fuel prices make electric vehicles more attractive at home. Chris Liu of research and advisory firm Omdia said that rising fuel prices also may boost BYD growth in China.
Even so, the report said the United States remains a major barrier for Chinese manufacturers because “high U.S. tariffs have largely shut Chinese EVs out of the American market.” As for how quickly consumers shift, the report said that prolonged fuel spikes may act as a future catalyst for electric vehicles but that it can take time to see the trend reflected in purchases, in part because customers may wait to see how the conflict unfolds.
Beyond companies, the AP report described how energy-price pressure can change household behavior and government planning. It said James Bowen of ReMap Research, an Australia-based consultancy, argued that households facing higher energy costs are likely to move to clean power. As an example, the report pointed to Pakistan, saying its renewable rollout that began in 2017 helped drive more than 50 gigawatts of Chinese solar panel imports by December 2025.
The report said Pakistan still imports a third of its energy and that about 80% of its oil flowed through the Strait of Hormuz, with Qatar supplying a quarter of its LNG. Nabiya Imran of Renewables First said: “the shock isn’t as big as it would have been without solar.” AP also reported that if fuel 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 Europe and Southeast Asia, the AP report cited shifts in consumer demand and pricing pressure. It said in the United Kingdom, EV leasing demand jumped by more than a third in the first three weeks of March compared with a similar February period before the war, according to Octopus Energy. Octopus also reported increases in rooftop solar sales and solar-related inquiries, the report said. In Southeast Asia, the report said Vietnamese EV maker VinFast has offered discounts to offset fuel-price shocks.
The report also pointed to Indonesia as a case where policy signals could translate into more demand for Chinese clean-energy supply chains. It said Indonesian President Prabowo Subianto announced in March a push into electric vehicles, including plans to produce electric cars and expand charging infrastructure. It quoted Putra Adhiguna of the Jakarta-based think tank Energy Shift Institute saying: “The dream of electrified transportation is gaining renewed attention.”
The AP report said Chinese firms already play a large role in Indonesia’s clean-energy supply chain. It reported that Chinese companies signed more than $54 billion in deals with the state utility in 2023 and added a $10 billion pledge during Prabowo’s visit to Beijing in 2024. Reynolds said: “There will be direct financial benefits to Chinese companies,” according to AP.
In its closing context, the report suggested that these energy transitions are also shaped by geopolitical risk and strategic planning rather than only by short-term price signals. It noted that even if a ceasefire holds, the renewed vulnerability of fossil-fuel supply chains has already pushed many governments and investors to reconsider how they secure energy—an adjustment that could favor Chinese clean-tech manufacturers as demand grows.