The U.S.-Israeli war with Iran has pushed countries across Asia and Africa to speed up their shift to solar, batteries and electric vehicles. After the Strait of Hormuz closure jolted fossil fuel supplies, governments are treating imported oil and gas as a security risk — and turning to Chinese clean-energy technology instead.
More than four months into the U.S.-Israeli war with Iran, some countries are not returning to fossil fuel imports the way they relied on them before. Instead, nations across Asia and Africa are accelerating the adoption of solar, batteries and electric vehicles to cut their dependence on imported natural gas and oil.
The trigger was supply shock. The effective closure of the Strait of Hormuz cut off more than a fifth of liquified natural gas supplies, and prices have not recovered since. European and Asian natural gas prices are up more than 50% from when the war began. Asian prices shot up over 100% from pre-war levels at their March peak, and countries including the Philippines and Tuvalu have faced war-triggered energy crises that forced governments to close schools and ration fuel.
China supplies the alternative
Much of the new energy path runs through China. In March, Chinese solar panel exports were up more than 80% compared with last year, according to energy think tank Ember. Between January and May, China exported more than 2 million electric passenger vehicles, with nearly half of those shipments landing in April and May, according to consultancy SIA Energy.
Those imports are cushioning the price shock. Pakistan’s investments in solar and batteries have let it reduce oil and natural gas imports, saving the country billions of dollars, according to the Centre for Energy and Clean Air. The Philippines imported more than $400 million in solar panels from February to May, a 139% increase from a year earlier, according to Ember.
Oil demand turns down
The shift is reshaping the outlook for how to trade oil. Road transportation accounts for 45% of global oil use, so rising EV sales cut directly into demand. Before the war, the International Energy Agency expected global oil demand to rise this year; after the Hormuz disruptions, it downgraded that outlook to a decline.
The world will still need oil and gas for products such as fertilizer, plastics and jet fuel. According to SIA Energy’s Fareed Mohamedi: “But demand for oil and diesel is falling like a brick,” he says. The United States is the outlier, where new EV sales have slumped after the removal of federal tax credits for buyers.
Source: NPR
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