China and US took opposite paths through 2026 oil shock

When the United States and Israel launched strikes on Iran on 28 February 2026, few expected the shockwaves to reach as far as they did. Iran responded by declaring the Strait of Hormuz closed to shipping, a waterway through which roughly a quarter of the world's seaborne oil trade and a fifth of its liquefied natural gas normally pass. It became, by some measures, the largest single disruption to oil supply in history.

Two economies, two very different reactions

China and the United States, the world's two largest economies, responded to the crisis in strikingly different ways, according to analysis published by Brookings and the Center on Global Energy Policy at Columbia University. As tensions built before the fighting began, China accelerated its oil purchases, with imports rising 16% year-on-year in January and February 2026. Once the conflict started, Beijing reversed course sharply, cutting imports and ordering major refiners to halt diesel and petrol exports so fuel could be kept at home.

That caution reflects decades of planning. China has been a net oil importer since the early 1990s and has long treated its dependence on Gulf supplies, shipped through chokepoints such as the Strait of Malacca, as a strategic vulnerability, CNN reported. Beijing has built strategic petroleum reserves and land pipelines from Central Asia, Russia and Myanmar specifically to soften the blow of a crisis like this one.

The United States took the opposite tack. American producers ramped up drilling, and oil exports from outside the Middle East, led by the US, surged by 3.5 million barrels a day during the conflict, according to the International Energy Agency, as reported by CNBC. Yet even as Washington leaned further into fossil fuel production, it pulled back support for renewables and electric vehicles, a retreat that has widened what analysts call a steep divergence in energy strategy between the two powers.

Clean energy exports surge, not shrink

Some forecasters had expected China's clean technology exports to slump as the country focused on securing fuel supplies. New data from the energy think tank Ember shows the opposite happened. China's solar panel exports doubled in a single month, reaching a record 68 gigawatts in March, while battery and electric vehicle exports jumped 38%, with fifty countries setting new records for Chinese solar imports, many of them nations hit hardest by the fuel crunch, including India and the Philippines.

“China's short-term policy responses also appeared to prioritise nonfossil energy, according to the Brookings Institution's analysis of the crisis.”

Brookings researchers frame the split as a contest between an 'electrostate' model, built around electrification, and a 'petrostate' model, built around oil and gas production. The distinction echoes an older episode. During the 1973 oil embargo, fuel-efficient Japanese cars won over Western drivers almost overnight. Analysts now suggest a similar shift could favour Chinese electric vehicle makers such as BYD, as buyers facing volatile pump prices look for cheaper, fuel-free alternatives.

Prices held, for now

Despite losing an estimated 10 million barrels a day of Gulf exports, roughly 10% of global consumption, crude prices settled just above $100 a barrel by mid-May, lower than the spike that followed Russia's invasion of Ukraine in 2022, CNBC reported. US Energy Secretary Chris Wright, speaking from Port Arthur, Texas, pointed to growing American supply as part of the reason prices stayed contained.

“"There's a natural energy trade there," Wright told CNBC, describing expectations that China would buy more oil from American producers.”

President Donald Trump and President Xi Jinping met in Beijing in May and agreed the Strait of Hormuz must reopen to support the free flow of energy, though it remains unclear when shipping traffic will return to pre-war levels. For European economies, which draw heavily on Gulf LNG and have already been navigating higher energy costs since the Ukraine war, the standoff is a reminder of how concentrated global energy risk remains, even as China's clean-tech dominance and America's fossil fuel expansion pull the world's energy map in opposite directions.

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