How Energy Shock From West Asia War Opens Door For China’s Tech Dominance

Last Updated:April 13, 2026, 13:41 IST

The Iran conflict has hastened the transition from fossil fuels to renewable power, bringing several countries closer to Chinese technology.

The US-Israeli war on Iran in the Gulf has caused a massive energy crisis by disrupting oil and gas supplies, which has benefited Russia as the US temporarily eased sanctions on its oil due to soaring fuel prices. The war’s economic fallout has also opened the door to greater reliance on Chinese technology.

As the conflict exposed the risks of over-dependence on oil and gas from West Asia, many countries are now realising that all paths to renewable power run through China and its exporters, making Beijing a clear winner in the war. Several nations are already accelerating efforts to upgrade their power grids, bringing them closer to Chinese technology.

With the Strait of Hormuz effectively shut, much of the disrupted oil and gas flows were destined for Asia, hastening the transition from fossil fuels to cleaner energy sources. 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.

China’s Dominance Grows

China dominates the global electric mobility supply chain, producing over 70% of the world’s electric vehicles and around 85% of battery cell output, according to the International Energy Agency. Its current five-year plan, running through 2030, continues to prioritise these industries.

Even before the Iran war began, China was expanding its dominance in clean energy technologies by helping countries build grids designed to meet the heavy electricity demands of artificial intelligence, as per the New York Times. It also blocked foreign companies from competing in large segments of its domestic market to help Chinese companies grow.

On the other hand, US President Donald Trump scaled back on renewable energy and leaned on its vast oil and gas resources, promoting energy exports to achieve what he described as “energy dominance." However, the war sparked a global oil shock, with Chinese companies poised to benefit from a renewed interest in low-emissions energy products.

Even if a ceasefire is announced quickly, the oil shock is unlikely to be resolved soon. Countries like the Philippines and Brazil have already announced initiatives to set up new renewable power plants amid growing energy demands across the world.

Chinese Firms To Benefit

China is the main trading partner for most countries worldwide and the dominant supplier of essentials like rare-earth metals and solar panels. Governments in Europe and elsewhere have expressed concern that this reliance could undermine their economic and national security, particularly when Beijing shut off much of the world’s supply of certain rare earth metals.

With no end in sight for the Iran war, demand for Chinese technology is expected to rise. Chinese industry giants like vehicle-maker BYD – which has surpassed Tesla as the world’s largest EV manufacturer – and battery-producer CATL are positioned to capitalise on this trend. Since the war began, CATL has seen surging demand in Europe for home battery systems and growing interest in Asia in grid storage batteries, as per NYT.

Additionally, Chinese companies also dominate in software that manages energy flows. Chinese businesses also lead in producing a new generation of battery chemicals that allow large amounts of electricity to power homes and electric vehicles.

The energy shock is “going to help the Chinese industry globally and hurt the American car industry globally," Amy Myers Jaffe of New York University’s Centre for Global Affairs told the Associated Press.

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