Iran War Pushing Focus Away from Fossil Fuels

Iran War Pushing Focus Away from Fossil Fuels

By Asit Biswas, Cecilia Tortajada, Dr. Peiyue Li 22 July, 2026

Oil shortage pains are forcing Asia to fast track renewable energy expansion & strive for greater domestic control over electricity generation, observe professors Biswas, Tortajada & Li

The article was first published in China Daily in June 2026. Click here to view. 

The Iran war has led to many unintended consequences. The US and Israeli airstrikes have left more than three thousand Iranians dead and many more injured. In addition, the bombings have caused extensive economic damage. Lebanon has also suffered numerous casualties and substantial economic losses.

While the United States and Iran are discussing a proposed 60-day extension of an uneasy ceasefire, its failure would likely have many consequences, affecting not only the countries directly involved but also others beyond the conflict.

In fact, the conflict has already contributed to one of the greatest energy disruptions in modern history.

Since the war, Brent crude oil has shot up from $70-73 to >$100 per barrel

Before the war, in late February, Brent crude oil, the global benchmark, was trading at around $70-73 per barrel. In recent days, prices have exceeded $100 per barrel.

As a result, energy import bills have skyrocketed. Moreover, since many Asian countries depend heavily on oil imports passing through the Strait of Hormuz, their energy supplies have been severely disrupted.

China, because of its long-term planning, maintains substantial oil and gas reserves and has been managing import shortages relatively effectively.

However, other Asian economies are now under severe strain due to rising energy prices and major supply chain disruptions.

Consequently, they are experiencing declining foreign exchange reserves, weakening currencies, higher inflation and reduced economic activity.

Asian govts have started energy rationing, raising fuel prices & seeking alternative energy

This has forced governments to implement energy rationing, raise retail fuel prices and seek more expensive alternative energy sources.

For example, in Bangladesh, manufacturing costs for garments have reportedly risen by around 40 percent.

Liquefied natural gas prices have nearly doubled compared to prewar levels, costing the country approximately $880 million.

The longer the war continues, the greater the likely economic, social and political damage for oil-importing countries.

Much of the world was already transitioning toward renewable energy for both economic and environmental reasons.

However, the energy insecurity resulting from the Iran war, especially due to the closure of the Strait of Hormuz, has focused global attention on the importance of domestic control over electricity generation and reducing dependence on oil and gas imported from volatile regions through risky transportation routes.

South Korean President says the future may be extremely risky if the country relies on fossil fuels

Not surprisingly, Republic of Korea President Lee Jae-myung observed that the ROK needs to transition to renewable resources quickly. Lee stated that the future may be extremely risky, if the country relies on fossil fuel energy.

Many other countries have reached similar conclusions.

Vietnam, for example, has already shelved plans for a major new liquefied natural gas terminal, while proposals for renewable energy expansion are now under consideration.

Pakistan has become a major user of rooftop solar electricity systems because electricity supplies have long been unreliable and millions of people still lack access to the national grid.

Rising electricity prices will likely push rooftop solar adoption

As electricity prices continue to rise because of the war, an increasing number of households are likely to adopt rooftop solar power generation.

In India, solar energy accounted for 9 percent of electricity generation in 2025, compared to only 0.5 percent a decade earlier.

Considering that fuel prices in the country have increased at least three times in less than three weeks, its adoption of solar energy, electric vehicles and battery technologies is likely to accelerate further.

The Iran war has also imposed major costs on US consumers. According to The New York Times, the additional amount US citizens collectively spent on gasoline and diesel following the US and Israeli attacks on Iran reached an estimated $44.8 billion. However, the US remains the only major country actively resisting the transition to clean energy while continuing to promote fossil fuels and coal.

China made EV research a national priority in 2001 helping it become an electrostate…

…while the US seems committed to being a petrostate

In China, the government made EV research a national priority in 2001. A quarter-century later, China’s long-term investments in green technology appear highly astute.

China, which now has between 60 and 85 percent of the global renewable energy equipment market, is rapidly evolving into an electrostate, while the US appears increasingly committed to remaining a petrostate.

Continuous innovation has also made EVs increasingly cost-competitive relative to conventional vehicles, after taking charging times and the distance vehicles can travel before recharging or refueling into account.

In the US, the average price of a new EV now exceeds $50,000, compared to $36,000 only a decade ago.

Chinese EVs are as low as $12k vs US EVs on average exceed $50k

In contrast, Chinese companies such as BYD and Geely offer some vehicles priced below $12,000. BYD, the world’s largest EV manufacturer, reduced its average selling price from 143,000 yuan ($21,107) in 2021 to 119,225 yuan in 2025 because of continuous innovation, strict cost control, streamlined manufacturing and intense competition.

Interestingly, BYD’s electric bus plant in California can reportedly produce buses at costs 30 percent lower than comparable US manufacturers, even though each bus contains approximately 70 percent US content by value.

In 2025, China’s EV exports nearly doubled to 2.6 million units compared to the previous year.

Nearly half of these vehicles were produced overseas in one of the 16 countries where Chinese companies either already operate or are planning manufacturing facilities. By 2035, these overseas plants are expected to produce 3.4 million units annually.

Global EV sales surpassed 20mn units in 2025, 7x increase since 2020

The International Energy Agency estimates that global EV sales surpassed 20 million units in 2025, representing nearly a sevenfold increase since 2020. Following the Iran war, global EV demand is likely to accelerate even more rapidly.

Chinese automotive companies are now actively exploring the establishment of manufacturing plants in Canada, Mexico, the European Union and several Asian, African and Latin American countries.

These developments reflect a growing global perception that dependence on oil, once referred to as “black gold”, has become increasingly incompatible with sustainable economic development and environmental protection.

China’s long-term commitment to clean energy is now generating enormous economic returns.

China has transformed one of humanity’s greatest challenges, climate change, into a major economic opportunity from which it is likely to derive significant economic and environmental benefits for decades to come.

Further readings

• Why Rising Oil Prices Create a Strategic Opportunity for Recycled Plastic – The Hormuz oil blockade is tipping the scale for recycling economics to take off, so Ocean Recovery Alliance’s Woodring urges brands to embrace circularity over price volatility
• Flood of Opportunities in Ecological Preservation – China’s ecological civilisation is more than ideology but a proven approach to turn climate risks into new opportunities. Water policy professors Biswas, Wang & Tortajada show us how
• The War On Climate – Closing the Military’s Emissions Gap – Global military activity is the 4th biggest polluter after India but no reporting or reduction targets are required of the industry. Researchers Dr. Abolfathi & Kinney reveal how to hold this hidden carbon source accountable

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