American gas guzzlers versus Chinese electric vehicles. Renewables versus oil and natural gas.
The Iran war has often been portrayed as a winner-takes-all grudge match in the global contest between clean energy and fossil fuels.
But history suggests that America and China could both emerge from the conflict in stronger positions — with more oil flowing from U.S. wells and new shiploads of Chinese EVs transiting the seas.
“I don’t see this as being a pro-transition or anti-transition binary,” said Gregory Brew, a senior analyst at the Eurasia Group, referring to the clean energy transition. “I think it’s much messier than that.”
A series of energy shocks 50 years ago shows why.
While countries responded to the Arab oil embargo era by switching from crude oil to other electricity fuels, they also pushed companies to start drilling for oil in regions where it was previously too expensive. Nations embraced low-carbon energy sources like nuclear, and built up the liquefied natural gas industry to ship more fossil fuels around the world. Governments used fuel economy standards to squeeze more miles out of each gas tank, cementing oil’s dominance among drivers.
Analysts say something similar could happen when the U.S. and Iran end the war that President Donald Trump launched with Israel in late February. The U.S. and Iran agreed in principle this week to to reopen the Strait of Hormuz, a central artery for global oil and gas supplies.
There is a key difference between the two periods of energy upheaval. Whether countries embrace fossil fuels or clean energy after the current conflict will likely have little to do with considerations about climate change, an issue that has animated global energy politics for more than a decade.
Instead, analysts say countries could prioritize stable energy supplies, much as they did in the 1970s.
“I think this hammers home to everyone — consumers, producers, industrialized states, emerging markets — that the key consideration, the key concern, is not necessarily what energy you’re consuming, but where you’re getting it from and whether that source is secure,” Brew said.
That sentiment is at odds with the political messaging coming out of capitals like Washington and Brussels, where leaders are pitching the conflict as a boon for their favorite form of energy — whatever it might be.
In Europe, politicians and business executives point to the war’s repercussions as evidence that their strategy to boost renewables and EVs is working, by limiting the continent’s exposure to spiking fossil fuel prices.
Trump takes the opposite position. He has made the strait’s closure Exhibit A in his campaign for energy dominance, saying it justifies his agenda to expand oil and gas exports.
“The reality is that fossil fuels are still necessary to generate the electricity that powers electric vehicles,” said Taylor Rogers, a White House spokesperson. “President Trump is focused on unleashing a diverse mix of reliable and affordable energy sources to strengthen our economic independence: from hitting record-high production levels of oil and gas to making historic strides developing America’s nuclear power industry.”
The dueling talking points reflect geographic realities. The U.S. is swimming in oil and gas, whereas Europe and Asia must find large quantities of those fuels from other countries. The EU and Japan import nearly all of their oil, with roughly 20 percent coming from Norway and the United Kingdom to the European bloc. In China, that figure is more than 70 percent.
The U.S., by contrast, is the world’s largest exporter of petroleum products and gas, though it still imports crude and finished petroleum products due to quirks in its refining system.
That leads to starkly different visions of energy security. The shutdown of oil and gas shipments through the strait gives importing countries a stronger incentive to electrify their economies, analysts said. But many will also look to find new sources of oil and gas that are free of geopolitical entanglements in the Middle East. That is a boon for the U.S.
“I think this crisis is going to affect different regions and different countries differently,” Brew said.
The world has been here before. When Arab countries cut off supplies to the U.S. in 1973 over Washington’s support for Israel in the Yom Kippur War, crude prices shot from $3 a barrel to $12. They rose again when a revolution swept across Iran in 1979, denting output from one of the world’s largest oil producers. Barrel prices soared from under $15 in 1978 to over $35 in 1980.
Those numbers look quaint today. Brent, the international oil benchmark, briefly exceeded more than $130 a barrel in early April, before slowly falling to $87 on Friday. The rise during the 1970s was steeper as a percentage —and also permanent.
“Imagine a quintuple or a quadrupling of oil prices in a few months, and then it sticks and you can’t do anything about it. That was the shock of the ’70s,” said Bob McNally, president of Rapidan Energy and an energy adviser to former President George W. Bush.
The 1970s opened a new era, in which the Organization of Petroleum Exporting Countries used production quotas to influence world prices. They would continue to rise and fall in following decades, but they never returned to pre-1970s levels.
The repercussions struck deep.
Oil disappeared from power plants. After accounting for 17 percent of U.S. electricity generation in 1973, oil amounts to less than 1 percent today. Other countries saw bigger shifts. In Japan, oil fell from 66 percent of the power mix in 1974 to roughly 2 percent in 2024. In France, it plummeted from 40 percent before the crisis to 5 percent in 1983. It is virtually nonexistent today.
In each case, the transition away from oil was driven by the presence of a reliable alternative, analysts said. France embarked on a massive build-out of nuclear reactors. The U.S. embraced coal and nuclear power. So did Japan — which also poured itself into expanding the nascent LNG industry.
But there were no easy alternatives for transportation, where gasoline, diesel and jet fuel remain king. And so the world embarked on a search for new oil fields, pushing into the North Slope of Alaska and Europe’s North Sea. Oil production in Alaska surged from less than 200,000 barrels a day at the start of 1973 to more than 1.6 million by the end of 1980. North Sea production jumped even more — from 226,000 barrels a day to 2.2 million over the same period.
For many countries it suddenly mattered less how energy was produced than where it came from.
“It was all of the above,” said Mark Finley, a veteran energy analyst who worked at BP and the CIA and now serves as a fellow at Rice University’s Baker Institute.
There are several differences between the Iran war and the energy crises from 50 years ago. First, many nations today remain committed to confronting climate change, which was not on the political radar a half century ago. The focus on cutting emissions has expanded the range of energy alternatives. Renewables, battery storage and electric vehicles are competing to take market share from fossil fuels. Solar was the world’s fastest growing energy source in 2025, while EVs represented a quarter of new car sales globally.
And that was before the war with Iran sent oil prices skyrocketing. The focus on energy security could prompt some countries to double down.
Although analysts agree that countries will emphasize energy security, they diverge on what that exactly looks like. The future of global natural gas consumption, which was growing before the conflict thanks to new American export terminals, suddenly looks cloudy. The world’s largest LNG facility, in Qatar, was damaged during the fighting, and Asian countries have responded by burning more coal — and planning for more renewables.
Transportation is perhaps a bigger question. Analysts are split on whether EVs can capitalize on the turmoil in oil markets. Bullish analysts point to the low price of Chinese electric cars and the insulation they offer drivers against price shocks at the pump.
But skeptics say hurdles such as slow-to-come grid upgrades and diffuse charging infrastructure threaten to dilute takeup, particularly in emerging markets. That could lead countries to restrict Chinese imports in defense of domestic automakers, limiting the flow of cheap vehicles.
“We do not have as readily available alternatives for gasoline and transportation and diesel … as we did for fuel oil back then,” McNally said.
He expects oil markets to follow a familiar cycle: A period of high prices leading to lower demand will create oversupply and, eventually, lower prices.
Then, finally, more oil demand.
The bigger change, McNally predicted, will be a shift in oil and gas investment away from the Middle East, creating a “permanent tailwind” for producers in North and South America.
Brew echoed that sentiment.
“This crisis has illustrated how unstable and uncertain supplies out of the Persian Gulf are and will be moving forward,” he said. “While that will compel a certain degree of transition away from dependence on hydrocarbons, I think the broader takeaway will be the attempt to diversify and reduce dependence on anything coming out of the Persian Gulf.”
Yet things could be different, this time.
Chinese EVs are already cost competitive with gas-powered cars made in the West. A flood of imported Chinese plug-ins into Asia, Europe and Latin America has helped to lower their price.
The war could accelerate that trend. Sales from Chinese electric vehicle makers were up 12 percent in May compared to the same time last year, reversing a slowdown in the country’s domestic EV market.
The China Passenger Car Association, a trade group, attributed the rebound in sales to higher oil prices stemming from the Iran war. More Chinese EVs are also headed abroad. The Associated Press reported last week that exports were up 73 percent through the first five months of 2026.
“The Europeans and the Chinese are seeing this very, very similarly, as this is another reminder about the dependence on imported fossil fuels, and therefore another reminder to double down on things that move away from fossil fuels,” said David Victor, a professor at the University of California, San Diego, who studies international energy markets.
But he pointed to a notable exception to the movement by many countries to expand electrification — especially using clean energy.
“The Trump administration, obviously, has seen things differently,” Victor said.
