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.

Last year, wind, nuclear, solar, and hydropower generated more than a third of China’s electricity in 2025. There’s also no sign of slowing down. China’s recent renewables grid expansions suggest that more than half the installed capacity is now from clean sources. Only around 20 percent of China’s total energy consumption in 2024 came from crude oil. While for a nation of 1.4 billion people this is still a seismic figure, it shows the success of the nation’s renewable energy initiatives in recent years. 

Data also shows that EV sales in China recently reached a tipping point, with electric vehicles making up 51 percent of new car purchases domestically throughout the past year. 

There’s been a flare-up of interest in Chinese renewable energy stocks since the war in Iran broke out. The CSI Green Electricity Index gained 6 percent in March, while the CSI New Energy Index ticked up 2 percent – even as the wider Shanghai Composite Index tumbled 8 percent due to panic selling over the same period. 

Industry leaders like the solar energy giant GCL Energy Technology have rallied 48 percent since the conflict began, while battery firm Contemporary Amperex Technology surged 15 percent. China National Nuclear Power Co has also climbed 8 percent amidst the geopolitical uncertainty. 

“China’s energy resilience can be seen in the performance of its EV stocks, with leaders like BYD Company, Li Auto, NIO Inc., and XPeng all growing in value since the outbreak of war in Iran at the end of February,” noted Vsevolod Smirnov, head of marketing at Just2Trade.

“Given that China’s EV sector had been struggling against severe price competition in a market that had become saturated by the volume of rivals vying for dominance, the geopolitical outlook in the Middle East could be a major catalyst for international expansion for China’s largest electric vehicle stocks.” 

The conflict in Iran and its impact on oil and gas shipments through the Strait of Hormuz have served as a timely reminder for many global nations that their old energy dependencies are becoming increasingly fragile. 

In the event of a prolonged war, China’s economy will be dealt a blow by energy disruption. However, rising fuel prices also open the door to more widespread attention to – and investment in – China’s world-leading emphasis on renewable energy. 

With investors already flocking to China’s brightest sustainability stocks, it’s clear that recent events could be a catalyst for growth in the renewables sector, which could form the foundation for a wider shift toward clean energy on a global scale in the coming years.