Dmytro Spilka
Amid the Iran-Israel-U.S. war, the price of Brent crude oil has already spiked to its highest levels since Russia’s initial invasion of Ukraine in 2022. The resulting energy shock has sent many global indices falling over the first quarter of 2026.
China hasn’t been immune to the conflict in Iran and the closure of the Strait of Hormuz, with the Hang Seng Index set to close the quarter 5 percent lower. However, the Asian powerhouse is well-positioned to weather the storm. Estimates suggest that the conflict in the Middle East will have a limited impact on China’s economic growth over the foreseeable future, thanks to its large strategic crude reserves, along with the nation’s focus on renewable energy.
Along with the rapid expansion of its renewable energy sector, China has made efforts to maintain a high level of coal production while diversifying its oil imports in a way that can protect against supply disruptions.
Iran has also reportedly shipped 11.7 million barrels of crude to China through the Strait of Hormuz since the conflict began on February 28. That, alongside Saudi Arabia’s bid to redirect oil exports to the Red Sea, could help to support a steadier long-term supply to support China’s energy infrastructure.
For many other global economies more directly exposed to disruption in the Strait of Hormuz, recent events in the Middle East are offering a timely reminder of the downside of reliance on fossil fuels. Given that, we could see new opportunities emerge for the renewable energy sector on the back of recent events in Iran – and China is poised to benefit.
China has spent much of the 21st century focused on becoming a world leader in clean energy, with a rollout of wind and solar farms nationwide, as well as a strong emphasis on electric vehicles (EVs). Clean energy industries drove more than 90 percent of China’s investment growth in 2025.
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