Erratic Fuel Prices Due to War, Chinese EVs Could Reap the\nBenefits<\/p>\n
Jakarta, CNBC Indonesia - The historic oil market shock and current\nsurge in fuel prices are creating a new momentum for the transition to\nelectric vehicles (EVs). This situation is being enthusiastically\nwelcomed by Chinese EV producers, who are now eager to meet global\nmarket demand.<\/p>\n
The war involving the United States (US) and Israel against Iran has\ndisrupted critical fossil fuel supplies from the Middle East on\nWednesday (25\/03\/2026). This has driven crude oil prices to soar to\nUS$119 per barrel last week, triggering concerns over worsening\ninflation and a potential global recession.<\/p>\n
However, this turmoil has come at a \u201cvery opportune\u201d time for China\u2019s\nEV industry. Although China produces and exports more electric cars than\nany other country, its automakers are facing fierce price competition\nand slowing growth in the domestic market, putting Chinese brands under\nsignificant pressure to seek alternative markets.<\/p>\n
Analysts state that as Chinese EVs become cheaper and petrol prices\nmore expensive, this combination is likely to extraordinarily accelerate\nthe global expansion of the industry. This is predicted to occur\nparticularly in Asian countries bearing the heaviest burden from fuel\nshortages.<\/p>\n
Managing Director of Sino Auto Insights, Tu Le, said there is\npotential for Chinese brands to make significant breakthroughs into Asia\namid high petrol costs. He emphasised that he expects them to fully\ncapitalise on the situation.<\/p>\n
Although investments in renewables in Asia continue to rise, the\nthree-week conflict in the Middle East has highlighted the region\u2019s\ndependence on oil imports. Around 60% of Asia\u2019s crude oil supply comes\nfrom the Middle East via the Strait of Hormuz, where Iran has tightly\nrestricted cargo flows.<\/p>\n
In its latest report, the energy think tank Ember describes EVs as\nthe biggest lever for cutting import bills. The institution estimates\nthat EV usage last year reduced global crude oil consumption by 1.7\nmillion barrels per day, or about 70% of Iran\u2019s exports in 2025.<\/p>\n
Analysts assess that the current oil crisis could serve as another\nturning point for Asia\u2019s clean energy industry, similar to how Russia\u2019s\ninvasion of Ukraine spurred renewable energy investments in Europe. This\nis seen as a reminder to consumers of the volatility in fossil fuel\nprices.<\/p>\n
Lead analyst and founder of the Centre for Research on Energy and\nClean Air, Lauri Myllyvirta, explained that when there is one price\nspike in a low-inflation environment, people might ignore it. But when\nanother spike occurs, it can be a moment that awakens the realisation\nthat prices are highly volatile and driving petrol vehicles will only\ncontinue to expose users to that risk.<\/p>\n
On the other hand, China, which sources more than 40% of its oil from\nthe Middle East, is beginning to reap the benefits of its shift to\nrenewables. With the world\u2019s largest oil reserves as well as its status\nas the biggest producer of wind and solar energy, China is considered\nbetter protected from energy crises than other Asian countries.<\/p>\n
\u201cThe deployment of EVs in China, which accounts for around 50% of new\ncar sales and about 12% of all registered vehicles, cut the country\u2019s\noil consumption by nearly 10% last year,\u201d Myllyvirta told CNN\nInternational.<\/p>\n
Myllyvirta added that from China\u2019s perspective, this scenario is\nexactly what they had in mind when implementing their energy security\nstrategy.<\/p>\n
Executive Director of the Institute of Middle East Studies at Peking\nUniversity HSBC Business School, Zhu Zhaoyi, said the oil crisis could\naccelerate China\u2019s current clean energy ambitions, particularly peaking\nemissions by 2030 and carbon neutrality by 2060.<\/p>\n
Zhaoyi emphasised that China\u2019s leadership has seen this happen\nbefore. According to him, every time there is instability in the Middle\nEast, it reinforces the same lesson that relying on fossil fuel imports\nis not only bad for the environment but also a national security\nissue.<\/p>\n
State support that has helped China become a global leader in\naffordable EVs has also created a brutally competitive landscape for its\nlocal automakers. Many of them are now struggling to survive in an\noversupplied market.<\/p>\n
Consulting firm AlixPartners estimates that only about 15 of the 129\nChinese EV brands on the market in 2024 will be financially viable by\n2030. Analysts predict domestic demand will slow further as the Chinese\ngovernment phases out subsidies.<\/p>\n
Automotive consultant from AlixPartners, Yichao Zhang, opined that\nthe recent oil price surge may give automakers the much-needed boost\ndomestically, but they still need foreign markets to absorb excess\nsupply.<\/p>\n
Zhang said that while the oil price increase can help grow the EV pie\nin China, its size won\u2019t double. He admitted that he doesn\u2019t think it\ncan immediately resolve the overcapacity issue.<\/p>\n
That overcapacity is unlikely to benefit consumers in the United\nStates (US), where high tariffs have effectively locked Chinese EVs out\nof the market to protect local producers. Earlier this year, US\nPresident Donald Trump appeared ready to welcome Chinese EV brands, but\nonly if they build factories in the country.<\/p>\n
However, in Asia, many countries desperately need ways to cut energy\nuse amid dwindling fuel stocks. Some countries like Thailand, the\nPhilippines, and Vietnam have even instructed their citizens to<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/erratic-fuel-prices-due-to-war-chinese-evs-could-reap-the-benefits-1774435917", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }