According to China Energy Net, “safety, affordability, and cleanliness” are the three key elements of energy. The current Middle East crisis has brought the “safety” factor to the forefront; while this benefits fossil fuels in the short term, it will strengthen the internal momentum for the transition to new energy in the long run.

According to statistics from the International Energy Agency (IEA), fossil fuels accounted for 80.2% of global energy consumption in 2024, with coal at 27%, oil at 29.8%, and natural gas at 23.4%. Of the remaining 19.8% of energy consumption, 6.3% came from hydropower and 5% from nuclear power—both of which are traditional energy sources—while true renewable energy accounted for only 8.5%.

Even in China, home to the world’s largest renewable energy industry, non-fossil fuels accounted for only 21.7% of total energy consumption in 2025. Of this, wind and solar power combined made up 9.5%, while other renewables—including biomass, geothermal, and ocean energy—totaled 3.2%.

Consequently, although technological and engineering advancements have reduced the construction time for a 1-million-kilowatt solar power plant to 6–12 months, when missiles and drones force oil tankers to remain confined in ports across the Persian Gulf, the first decision made by nations is not to build new solar power plants, but to restart abandoned coal-fired power plants and idled nuclear power plants.

What about the long term? Once the fighting in the Middle East subsides and the Strait reopens, will energy-importing nations simply return to business as usual, or will they reassess energy security and accelerate the energy transition?

First, this depends on how long the conflict lasts. Currently, no one can predict this, nor can anyone guarantee that the fighting will not resume. If the Strait of Hormuz remains blocked for an extended period, global demand for thermal coal will increase by more than 80 million tons annually.

Second, political factors must be considered. Energy is the foundation of modern civilization; it has never been a mere commodity. Beyond serving as fuel and raw material, it is also a source of power. On March 23, U.S. Energy Secretary Chris Wright stated at Cambridge Energy Week that natural gas is the United States’ superpower. During the conflict, President Trump repeatedly called on oil-deficient nations to switch to purchasing U.S. oil, declaring, “We have plenty of oil.”

Since the 1950s, the United States has been the world’s largest net energy importer. Energy independence has been the dream of every U.S. president since Nixon, and during Trump’s tenure, that dream finally came true: in 2019, the United States became a net energy exporter. By 2025, U.S. crude oil production accounted for nearly 20% of the global total—almost equal to the combined output of Saudi Arabia and Russia—while natural gas production accounted for 27% of the global total, nearly double that of Russia, the second-largest producer.

Before Trump took office, “energy transition” was the buzzword in the global energy sector. Following the signing of the Paris Agreement in 2015, the energy transition reached a peak in both concept and action. However, Trump withdrew from the Paris Agreement twice, and his administration fundamentally denied the link between climate change and human activity.

To date, the United States is the only country to have withdrawn from the Paris Agreement, and Argentina is the only one to have expressed an intention to do so. Addressing climate change remains a globally accepted political imperative, but the negative influence of the United States is spreading, and voices denying the link between climate change and human activity are growing. If such views become mainstream, the moral foundation of the global energy transition will be shaken. Coal-fired power plants that have been restarted as emergency measures may remain operational indefinitely.

Finally, although the pace of the global energy transition will be influenced by the United States, for the vast majority of countries, political considerations remain secondary. As long as new energy sources comprehensively lead in the three key areas of “supply security, affordability, and clean usage,” the shift from old to new energy sources will be unstoppable.

Locally deployed renewable energy possesses inherent security. Fatih Birol, Executive Director of the International Energy Agency, has called solar and wind “energy for peace.” He said, “Countries reliant on oil and gas imports are highly vulnerable to geopolitical shocks, but once solar panels and wind turbines are built on your own soil, no one can cut off the sun or the wind.”

Over the past decade or so, wind and solar power have gradually become cheaper than fossil fuels, a result of continuous technological progress in which China has played a pivotal role. Today, the cost per kilowatt-hour for wind and solar power is generally lower than that of coal, natural gas, and nuclear power. In the sun-drenched Middle East, the price per kilowatt-hour that solar power plants sell to the grid is as low as 1.0 to 1.5 cents, while European gas-fired power plants sell to the grid at 10 to 14 cents per kilowatt-hour, and Chinese coal-fired power plants sell at 4.5 to 6.0 cents per kilowatt-hour.

The current bottleneck in the large-scale deployment of wind and solar power is the power grid. Power grids around the world were built during an era dominated by coal-fired power, designed to accommodate a continuous 24/7, 365-day power supply. However, wind and solar power are intermittent sources subject to weather fluctuations. Consequently, power grids worldwide must undergo flexibility upgrades, which entails massive investments and represents a steady source of economic growth.

Consequently, even in the United States, substantial capital continues to flow into renewable energy. Meanwhile, despite oil and gas companies having reaped massive profits in recent years, their executives remain deeply concerned. While applauding the bold statements of the U.S. Secretary of Energy, they are acutely aware that the future does not lie with them.

China: Resilience Put to the Test

As the world’s largest crude oil importer, the world’s largest energy consumer, and the world’s second-largest economy, China has demonstrated greater resilience in the face of the current crisis in the Strait of Hormuz. According to S&P Global statistics, China is the largest buyer of Middle Eastern oil. In 2025, 14.9 million barrels of crude oil per day were exported through the Strait, with 35.6% of that volume destined for China.

The resilience of China’s energy system is built on two pillars: First, regarding oil supply security, the country has expanded overseas upstream resources, diversified import sources and routes, and established a strategic reserve system; Second, the power sector leverages domestic resource endowments. With coal serving as a safety net, and guided by low-carbon strategies and industrial policies, it has established a vast green energy manufacturing and power supply system.

Although China’s oil imports account for a significant proportion, its overall energy structure is dominated by “coal-fired power plus renewable energy.” In 2025, oil and natural gas accounted for 18.2% and 8.7% of China’s total energy consumption, respectively, with approximately 73% and 38% of these coming from imports. Coal and non-fossil energy sources accounted for 73% of the nation’s total energy consumption, all of which was met by domestic supply; when combined with domestically produced crude oil and natural gas, China’s overall energy self-sufficiency rate approached 84%.

In particular, since 2020, wind and solar power have experienced rapid growth, and non-fossil energy has become one of the main energy sources. From 2021 to 2025, approximately 45% of the nation’s new energy consumption came from non-fossil energy sources, with this proportion reaching 76% in 2025.

China’s concerns about oil security have persisted for many years. China became a net oil importer in 1993, and in 2009, the proportion of imported oil in total consumption exceeded 50% for the first time; since then, it has risen annually to approximately 73% by 2025, with crude oil imports reaching 570 million tons.

More than two decades ago, industry experts and policymakers frequently cited the geopolitical risks associated with the Strait of Malacca, through which 80% of East Asia’s imported oil passes. To mitigate the concentration risk posed by a single transit route, China has, since 2010, significantly expanded its overseas upstream oil and gas resources and multi-channel infrastructure to diversify its import sources. According to statistics from the CNPC Economic and Technical Research Institute, the overseas oil and gas production from equity interests held by state-owned and private oil companies reached 196 million tons in 2025. The combined transport capacity of the three major land-based crude oil pipelines—China-Russia, China-Kazakhstan, and China-Myanmar—reached 70 million tons per year, while the combined transport capacity of the China-Russia and Central Asia natural gas pipelines reached 93 billion cubic meters per year. According to estimates by market institutions, China’s oil reserves are sufficient to cover more than 100 days of imports.

By 2025, China’s crude oil imports will have increased significantly by 72% compared to 2015, but the sources have become more diversified. The share from the Middle East has decreased from 50.7% to 42.3%, while the shares from Russia, Asia, and the Americas have increased. In 2025, natural gas imports were 1.7 times the 2015 level, with onshore pipeline imports accounting for 45%, while liquefied natural gas (LNG) imports by sea originated from Australia, Qatar, and Southeast Asia.

Unlike oil and gas resources, which rely heavily on imports, China’s domestic electricity generation capacity can almost entirely meet domestic demand. Coal-fired power remains a key baseload source, accounting for 51.1% of total electricity generation in 2025; non-fossil energy sources—including hydropower, wind power, solar power, nuclear power, and biomass power—already account for 42.9% of total electricity generation; moreover, new renewable energy generation capacity is already sufficient to fully cover the increase in electricity consumption across society. Due to limitations in domestic resource endowments and energy security considerations, natural gas is primarily used for urban gas and heating, industrial fuel, and peak-shaving power generation; its share in power generation has remained relatively small, accounting for approximately 3% of total electricity generation.

Building on the goal of a low-carbon transition across society and the strong foundation of the new energy industry, China’s energy transition will continue to deepen, further reducing reliance on imported energy. By 2035, non-fossil energy will account for more than 30% of China’s energy consumption, and the total installed capacity of wind and solar power will reach six times that of 2020.

Unlike oil and gas resources, which rely heavily on imports, China’s domestic electricity supply capacity can almost entirely meet domestic demand. Coal-fired power remains a key baseload power source, accounting for 51.1% of total electricity generation in 2025; Non-fossil energy generation—including hydropower, wind power, solar power, nuclear power, and biomass power—already accounts for 42.9% of total electricity generation; moreover, new renewable energy generation capacity is already sufficient to fully cover the increase in electricity consumption across society. Due to limitations in domestic resource endowments and energy security considerations, natural gas is primarily used for urban gas and heating, industrial fuel, and peak-shaving power generation, with its share of electricity generation remaining relatively small at approximately 3%.

Building on the goal of a low-carbon transition across society and the strong foundation of the new energy industry, China’s energy transition will continue to deepen, further reducing reliance on imported energy. By 2035, non-fossil energy will account for more than 30% of China’s total energy consumption, with the combined installed capacity of wind and solar power reaching more than six times that of 2020, and wind and solar power together accounting for 60% of total installed power generation capacity. Coal and oil consumption are expected to peak before 2030, while coal-fired power generation will shift to reserve capacity, resulting in a decline in electricity output. With the accelerated penetration of new energy vehicles, refined oil consumption has entered a gradual decline, with only the chemical industry still driving incremental crude oil demand.

Over the past decade, China has transformed from the world’s largest market for internal combustion engine vehicles into the largest market for new energy vehicles. According to IEA statistics, China’s electric vehicle sales have accounted for more than half of the global total for several consecutive years. By 2025, new energy vehicles will constitute 12% of China’s vehicle fleet, with a penetration rate of nearly 60% in new vehicle sales. The IEA notes that even at an oil price of $40 per barrel, the full lifecycle cost of electric vehicles in China remains lower than that of internal combustion engine vehicles.

China’s new energy manufacturing sector and market scale began with years of industrial policy support. Amid fierce competition, continuous technological iteration and cost reductions have formed a complete and vast industrial chain system. Clean energy and electrification have become economically viable and self-reliant sources of energy supply, and during a period of profound macroeconomic structural adjustment, they have emerged as a new pillar of economic growth.

Citing UN data, the National Development and Reform Commission (NDRC) reported that in 2024, China’s clean energy sector contributed 10% of the country’s GDP (gross domestic product) and drove 26% of that year’s GDP growth. According to the General Administration of Customs of China, exports of the “new trio” of products—electric vehicles, photovoltaic products, and lithium batteries—are projected to reach nearly 1.3 trillion yuan in 2025, a 3.5-fold increase from 2020, accounting for 4.7% of total exports.

Amid today’s shifting global landscape, geopolitics has amplified the volatility in oil and natural gas supply and prices. As risk becomes “certainty,” the disruption of shipping through the Strait of Hormuz—which has never been subject to a substantive blockade—has become a reality. Even if the market maintains expectations of relatively ample oil and gas supply, the “scar effect” will persistently drive up risk premiums, as well as various shipping costs such as freight, insurance, and strait transit fees.

This will alter many economies’ assessments of the necessity of energy transition and increase the emphasis on domestic energy supply. In the aftermath of this conflict, global demand for new energy sources will be spurred in the coming years. China’s experience in developing its green industries has already demonstrated that transition does not necessarily entail higher costs or a “green premium.”

 

For China’s new energy sector, the current Middle East crisis presents another window of opportunity for expanding external demand. At the same time, the dividends of “easy globalization” have largely been exhausted, the binding force of global trade rules is weakening, and unilaterally imposed tariffs and investment barriers are proliferating. Chinese new energy companies must enter global markets through more complex means, such as establishing overseas factories, technology transfer, and optimizing supply chains.

United States: Consolidating Oil and Gas Hegemony

Building on the United States’ resource endowment, the Trump administration established an energy strategy centered on oil and natural gas.

In the U.S. National Security Strategy released in December 2025, the Trump administration elevated “Energy Dominance” to a strategic priority. By expanding the supply of oil, gas, coal, and nuclear energy, and promoting the repatriation of critical energy equipment and industrial chains, the administration aimed to achieve low-cost, abundant domestic energy supplies to support reindustrialization and the development of advanced technologies such as AI; by increasing net energy exports, it sought to strengthen alliances, weaken competitors, and enhance its global influence.

Prior to the Russia-Ukraine conflict, the United States accounted for only 4% of the EU’s LNG imports; this figure surged to 41% in 2022 and is projected to rise to over 50% by 2025, making the U.S. the EU’s largest LNG supplier. Following the outbreak of hostilities between the U.S. and Iran, some Asian countries have turned to “snapping up” oil from the U.S. due to supply disruptions in the Middle East. According to estimates by the commodity shipping intelligence firm Kpler, U.S. crude oil exports in April 2026 are projected to increase by 33% month-over-month, reaching 156 million barrels—a historic high.

Oil and natural gas dominate the U.S. energy consumption mix. By 2025, oil and natural gas will each account for over 36% of U.S. primary energy consumption, while coal, renewable energy, and nuclear power will each account for approximately 9%.

Following the shale revolution that erupted during the period of high oil prices in 2007–2008, U.S. oil and gas production began to rise rapidly starting in 2009. In 2014, U.S. oil production surpassed that of Saudi Arabia, making the United States the world’s top oil producer for the first time; this brought the global oil price benchmark down from around $100 per barrel to between $50 and $60 per barrel. By 2025, U.S. crude oil production accounted for nearly 20% of the global total—almost equal to the combined output of Saudi Arabia and Russia. The growth trajectory for natural gas was similar: in the same year, U.S. production accounted for 27% of the global total, while Russia, ranked second, accounted for only 15%.

According to the U.S. Energy Information Administration (EIA), U.S. crude oil production will grow by 3% in 2025, setting a new record of 13.6 million barrels per day; natural gas production will also reach a historic high of 118.5 billion cubic feet per day during the same period.

Given that increasing natural gas exports requires corresponding infrastructure expansion, natural gas export capacity in the United States, as well as in Canada and Mexico, is expected to grow rapidly in the coming years. The EIA estimates that if projects currently under construction proceed as planned, North America’s LNG export capacity will increase from 11.4 billion cubic feet per day in early 2024 to 28.7 billion cubic feet per day by 2029. By 2029, new LNG export capacity in North America will account for more than 50% of the global projected increase.

Beyond promoting domestic U.S. oil and gas growth, the Trump administration has sought to gain control over more oil and gas resources outside the United States to enhance U.S. energy influence.

The Trump administration has positioned Canadian and Mexican oil and gas as a “secure, low-cost supplement to domestic U.S. energy,” hoping to use tariffs and trade policies to strongly dominate the North American oil and gas market. In addition, the Trump administration supports the construction of cross-border oil and gas pipelines in Canada and Mexico to transport more Canadian crude oil to the U.S. while also selling more U.S. natural gas to Mexico.

After the U.S. forcibly took control of Venezuelan President Maduro, it gained control over the country’s oil reserves as well as its oil production and sales. Venezuela is the country with the largest oil reserves in the world and a founding member of the Organization of the Petroleum Exporting Countries (OPEC). Due to a lack of investment and development, Venezuela’s crude oil production in 2025 is expected to be only about 900,000 barrels per day, accounting for less than 1% of global crude oil production. Trump called on U.S. companies to increase investment in Venezuela to gain control over the country’s oil and gas resources.

Although the Trump administration spared no effort to prolong the oil era, the interests of the U.S. federal government and state governments were not entirely aligned. Based on local resource endowments and industrial foundations, some state governments continued to rapidly develop renewable energy.

Meeting rapidly growing electricity demand is a top priority for some U.S. state governments. U.S. electricity demand growth stagnated between 2010 and 2019, but since 2021, U.S. electricity generation has been growing at an average annual rate of 2%. According to EIA statistics, U.S. electricity generation reached a record high in 2025, up 2.8% from 2024, and is projected to continue growing in 2026 and 2027.

Texas and California are leading the way in the development of wind power, solar power, and energy storage, as both states possess favorable resource conditions and a strong industrial foundation. Solar power generation managed by the Electric Reliability Council of Texas (ERCOT) is projected to grow from 56 billion kilowatt-hours in 2025 to 106 billion kilowatt-hours in 2027; battery storage capacity is projected to rise from approximately 15 gigawatts in 2025 to 37 gigawatts by the end of 2027.

Meanwhile, leveraging its deep-rooted foundation in the nuclear power industry, the U.S. is experiencing a nuclear renaissance. Nuclear energy has been incorporated into the core options by U.S. policymakers, and regulatory authorities are systematically extending the operational lifespans of nuclear power plants while vigorously promoting the development of new nuclear technologies—such as small modular reactors (SMRs)—through streamlined approval processes.

Due to the development of artificial intelligence and the rapid expansion of data centers, the electricity demand of U.S. technology companies has surged significantly. Technology firms are the largest financial backers and drivers of the U.S. nuclear power renaissance, with many investing directly in nuclear power. Public data shows that the combined investment of Microsoft, Amazon, Google, and Meta in the nuclear power sector has exceeded $10 billion.

The development of commercial nuclear power plants in the United States began in the late 1950s, with most of the currently operating plants built between 1967 and 1990. Currently, the United States operates 94 nuclear reactors, making it the world’s largest producer of nuclear power. In 2024, nuclear power accounted for 19% of the country’s total electricity generation.

In January 2026, the U.S. Congress passed the Fiscal Year 2026 Energy and Water Appropriations Act, providing approximately $1.8 billion in annual funding for the Department of Energy’s Office of Nuclear Energy and an additional $3.1 billion in special funding to support the Advanced Reactor Demonstration Program. On March 24, James Danley, Deputy Secretary of the U.S. Department of Energy, stated at the “2026 Capitol Hill and Silicon Valley Forum” that the United States is committed to advancing a “nuclear renaissance,” with the goal of achieving criticality in three to four SMR prototype reactors by July 2026.

Carlos Pascual, Senior Vice President of International Affairs at S&P Global, told *Caijing* that against the backdrop of rapidly rising electricity demand, the U.S. energy system is showing a divergent pattern: on the one hand, official policy priorities lie in oil and gas, nuclear power, and geothermal energy; on the other hand, while the market accepts these energy forms, it continues to invest substantial capital in renewable energy, as this is currently the most viable option that can be brought online relatively quickly.

Europe: A More Rational Energy Transition

The 2022 Russia-Ukraine conflict dealt a severe blow to Europe’s energy system, leading to fundamental shifts in regional security objectives and the economic and industrial foundation. Four years later, the outbreak of conflict in a key oil and gas resource region has prompted Europe to comprehensively reassess the strategic implications of energy self-sufficiency. After a period of policies that prioritized climate goals, European energy strategy is returning to a more rational approach, placing energy supply security and domestic control at the forefront and adjusting relevant policies based on these two objectives.

Fossil fuels continue to dominate the EU’s energy mix. According to Eurostat data from 2025, oil and petroleum products, natural gas, and solid fossil fuels together accounted for 68.7% of the EU’s total energy consumption (primary energy consumption). Energy import dependency has long remained at a high level of 57% to 58%; specifically, oil and natural gas imports reached 95% and 90%, respectively, while hard coal imports stood at 67%. Of these imports, approximately 20% of crude oil and over 15% of natural gas come from Qatar.

In terms of electricity generation, the EU has achieved a historic breakthrough. Eurostat data shows that in 2025, the combined share of wind and solar power generation reached 30%, surpassing fossil fuel-based generation (29%) for the first time. Following the outbreak of the Russia-Ukraine conflict in 2022, the EU swiftly launched the “REPowerEU” initiative to accelerate the deployment of domestic renewable energy and completely break free from its reliance on Russian energy. By the end of 2025, the EU’s installed wind and solar capacity had surpassed 300 gigawatts and 450 gigawatts, respectively—representing increases of 50% and 170% compared to 2021—with wind and solar together accounting for 71.4% of total installed power generation capacity; Battery storage capacity will exceed 90 GWh, representing nearly a tenfold increase.

The EU will continue to expand along this transition path. By 2030, the EU plans to reach 500 GW and 750 GW of installed wind and solar capacity, respectively, with storage capacity expanded to 120 GWh, and wind and solar combined accounting for 75.8% of total installed power generation capacity; By 2040, to support the economy-wide emissions reduction target of 90%, the EU’s total installed capacity for wind and solar power will exceed 2,200 gigawatts, with energy storage reaching over 400 gigawatt-hours; combined, wind and solar power will account for more than 80% of total installed power generation capacity.

Although the EU’s goals for a cleaner power system are ambitious and progress has been significant, Europe’s reliance on oil in the transportation sector, the critical demand for natural gas in industry and heating, and extremely high external dependence remain vulnerabilities in the continent’s energy system.

Due to differences in energy structures and geopolitical positions, major European economies (including both EU member states and non-EU countries) have experienced markedly divergent impacts from this crisis. Specifically, they can be divided into three major groups:

The first category comprises countries that have benefited significantly, with Norway being a prime example. According to data from the International Renewable Energy Agency (IRENA), Norway’s overall energy self-sufficiency rate has consistently exceeded 700%. As the EU’s largest natural gas supplier, it has also reaped substantial economic gains.

The second category comprises countries with strong energy resilience, represented by EU member states such as Sweden and Denmark. These nations have high levels of electrification, with renewable energy accounting for over 50% of their energy consumption, and low direct dependence on fossil fuels from the Middle East.

The third category consists of countries that have been severely affected. As a major non-EU economy, the United Kingdom has seen a long-term decline in North Sea oil and gas production, and its heating networks rely primarily on natural gas. Following a sharp drop in LNG supplies from the Middle East, the UK has faced the impact of spot market shortages. Major EU industrial nations such as Germany, Italy, and Poland have also been severely affected; their industrial systems are highly dependent on imported fossil fuels, and their manufacturing sectors face the risk of reduced production.

Following the outbreak of the crisis, emergency measures across Europe prioritized maintaining system stability. Italy passed emergency legislation to postpone the closure of coal-fired power plants—originally scheduled for the end of 2025—until 2038; Germany slowed its coal phase-out schedule, allowing some coal-fired power plants to remain connected to the grid long-term as strategic reserves; and at the EU level, preparations were made to tap into the IEA’s emergency oil reserves. The UK urgently expanded the National Grid’s “demand-side flexibility services,” using financial incentives to encourage the reduction of peak electricity consumption, and activated its domestic strategic natural gas reserves at full capacity.

While implementing short-term contingency measures, European policymakers have engaged in a profound reevaluation of the past decade’s energy policies, first acknowledging that the previous policies of completely phasing out nuclear energy and aggressively phasing out coal were mistaken. European Commission President von der Leyen stated at the Nuclear Energy Summit held in Paris in March 2026: “Europe’s abandonment of nuclear energy—a reliable, low-cost, low-carbon energy source—was a strategic mistake.” On the same day, German Chancellor Merz also stated that Germany’s abandonment of nuclear energy was a major strategic blunder.

According to the EU’s latest Nuclear Energy Demonstration Plan, the EU is projected to invest approximately €241 billion in nuclear energy by 2050, increasing total nuclear power capacity to 109 gigawatts. While this represents only a modest increase from the current 98 gigawatts, under the previous anti-nuclear policy, the decommissioning of a large number of nuclear power plants would have led to a significant decline in capacity.

In addition to expanding total capacity, the EU views SMR technology—which features short construction cycles and low initial investment—as a crucial component of its future nuclear power strategy. According to the EU’s recently released “SMR Development Strategy,” the plan includes allocating 200 million euros from the Innovation Fund to provide risk guarantees and establishing an “SMR Industry Alliance” to build a domestic nuclear power supply chain. Meanwhile, the UK is also advancing nuclear power construction in parallel, aiming to achieve energy independence through domestic nuclear energy.

Beyond nuclear energy, accelerating the transition to new energy sources such as wind and solar power also faces enormous financial challenges. It is estimated that the EU will need to invest approximately 660 billion euros annually by 2030. To this end, the EU launched the “Clean Energy Investment Strategy” in March 2026, with the core objective of leveraging public funds to mobilize private capital. To achieve this, the European Investment Bank (EIB) will provide over 75 billion euros in financing over the next three years.

February 16, 2026, Niigata Prefecture, Japan: The control room of Reactor No. 6 at the Kashiwazaki-Kariwa Nuclear Power Plant. Photo: Visual China

To ensure that the energy transition does not come at the expense of people’s livelihoods, the EU simultaneously introduced the “Citizens’ Energy Package.” This initiative aims to directly reduce household energy costs by easing the burden of electricity taxes and simplifying the process of switching suppliers. More importantly, the legislation strongly promotes the public’s self-generation and sharing of clean energy, encouraging the development of “energy communities” that transform energy consumers into producers, thereby fundamentally enhancing energy security.

Having cleared financial and social obstacles, the European Commission submitted a draft of the “Industrial Accelerator Act” to the Council of the European Union and the European Parliament on March 4, proposing to significantly streamline administrative approvals for new energy projects and accelerate their implementation. Fatih Birol, Executive Director of the International Energy Agency, has referred to solar and wind energy as “energy for peace.” He stated: “Countries reliant on fossil fuel imports are highly vulnerable to geopolitical shocks, but once solar panels and wind turbines are built on your own soil, no one can cut off the sun or the wind.”

A practical obstacle to advancing this transition is that global supply chains for photovoltaics, wind turbines, and batteries are highly concentrated in Asia, particularly China. Objectively speaking, Europe currently lacks the engineering and manufacturing capabilities to independently build a full new energy industrial chain, such as mega-battery factories. Forcibly severing existing external supply chains would directly lead to a stagnation of its own energy transition. Simone Tagliapietra, a senior researcher at the European think tank Bruegel, noted in a policy brief discussing the risks of decoupling Europe’s green supply chains: “ Importing a set of solar photovoltaic equipment is a one-time trade transaction, whereas importing natural gas implies a strategic dependency lasting for decades.”

Based on this shift in perspective, Europe has gradually let go of its fixation on achieving “self-sufficiency” in new energy manufacturing in the short term. It has come to recognize that even though the manufacturing of new energy equipment is highly concentrated in Asia and external supply chains are inevitably necessary, this does not pose a substantial threat to Europe’s domestic energy security.

By moderately decoupling “energy use” from “equipment manufacturing,” Europe has been able to rapidly scale up the grid integration of renewable energy by leveraging mature global supply chains. However, while relying on external infrastructure to enhance energy security, Europe has not abandoned its long-term support for domestic manufacturing. Through legislative and policy measures such as the Industrial Accelerator Act and the Clean Energy Investment Strategy, the EU aims to use the leverage of public funds and the scale of its vast internal market to gradually cultivate and refine domestic manufacturing capabilities for key renewable energy equipment.

Japan and South Korea: Unprecedented Strengthening of Nuclear Power’s Role

As typical resource-poor nations, Japan and South Korea have long been highly dependent on imported energy. According to IEA data, both countries’ energy self-sufficiency rates are below 20% (13% for Japan and 19% for South Korea), with oil and natural gas almost entirely reliant on imports.

The recent conflict in the Middle East has directly exposed the fragile energy supply chains of Japan and South Korea to risk. In the short to medium term, both countries will find it difficult to break free from their dependence on the oil and gas system and will strengthen cooperation at the industrial level with oil and gas-producing nations, including the United States. This will involve expanding long-term LNG procurement and participating in investments in upstream development projects. At the same time, geopolitical risks are reinforcing the security rationale for energy transition.

Japan’s primary energy supply is dominated by fossil fuels. According to IEA statistics, oil, natural gas, and coal account for 36.5%, 20.9%, and 26.1% of Japan’s total energy consumption, respectively. Nearly 95% of crude oil demand is met through imports from the Middle East, with the vast majority transiting through the Strait of Hormuz.

Due to its excessive import exposure, in mid-March—just two weeks after the conflict began—Japan announced the release of approximately 80 million barrels of oil reserves (equivalent to 45 days’ supply), setting a record high since the reserve system was established in 1978. According to statistics from Japan’s Ministry of Economy, Trade and Industry, by the end of 2025, Japan’s total domestic oil reserves will be equivalent to 254 days’ supply, far exceeding the IEA’s basic requirement of 90 days for member countries.

The first oil crisis of 1973 dealt a severe blow to Japan, prompting the country to actively develop new energy and energy-saving technologies. At one point, Japan led the world in technologies such as solar power (perovskite), offshore wind power, hydrogen energy, lithium battery materials, and nuclear power. However, during the industrialization phase, insufficient support for large-scale manufacturing and supply chain integration, coupled with limitations such as the limited size of the domestic market and constraints related to land and the power grid, slowed the pace of adoption. This made it difficult to sustain manufacturing expansion and cost reductions, causing Japan’s new energy industry to gradually lose its competitiveness.

A report by the Japan Research Institute shows that Japan’s global share of photovoltaic manufacturing reached 50.4% in 2004 but has since declined sharply. By 2023, Chinese imports accounted for 87% of Japan’s photovoltaic module imports, with domestic production becoming virtually negligible.

In February 2025, the Japanese government released the “Seventh Basic Energy Plan,” which sets a target of increasing the share of renewable energy in the power mix to 40–50% by fiscal year 2040, aiming to expand installed capacity and build a stable, low-carbon power supply system. Specifically, the target share for solar power is set at 23–29%, and for wind power at 4–8%. Due to geographical constraints such as limited flat land and steep seabed topography, the focus of development is on rooftop solar and floating offshore wind power. At the same time, nuclear power, as a key low-carbon power source, aims to increase its share to around 20% by 2040.

For Japan, which possesses a mature nuclear industrial base, nuclear power remains the most realistic option for providing stable, low-carbon, and controllable electricity on a large scale. The government led by Sanae Takaichi has explicitly designated nuclear energy as a “quasi-domestic energy source” and is accelerating the restart of nuclear power plants, while also promoting the research, development, and commercialization of small modular reactors and nuclear fusion technology.

Prior to the 2011 Fukushima nuclear disaster, nuclear power accounted for approximately 30% of Japan’s total electricity generation. Following the accident, all reactors were shut down for safety inspections and upgrades, with restarts beginning in 2015. In February 2026, Tokyo Electric Power Company (TEPCO), the operator of the affected plant, resumed operations at one of its nuclear reactors for the first time—a landmark event in Japan’s nuclear power restart. To date, 15 of Japan’s 54 nuclear power plants have been restarted.

The resumption of nuclear power in Japan has had an immediate impact on reducing reliance on imported fuel. The U.S. Energy Information Administration (EIA) notes that the units restarted in February have a combined installed capacity of 1.356 million kilowatts, with an estimated annual electricity generation of approximately 9.5 billion kilowatt-hours. Once fully operational, they are expected to replace about 1.3 million tons of LNG annually, accounting for 2% of Japan’s projected LNG imports in 2025.

Similar to Japan, South Korea is highly dependent on fossil fuel imports, with approximately 61% of its crude oil imports and 54% of its naphtha imports relying on the Strait of Hormuz. Since the outbreak of hostilities in the Middle East, the average operating rate of South Korean refineries has dropped by about 10%, and domestic naphtha supply has declined by 10% to 20%. According to IEA statistics, in 2024, fossil fuels accounted for nearly 80% of South Korea’s total energy consumption, while renewable energy accounted for less than 4%. In the power generation mix, nuclear power accounted for 31% and served as the baseload power source.

The IEA notes that while South Korea’s renewable electricity generation grew significantly in 2024 compared to 2015, it accounted for only 8.6% of total electricity generation—the lowest among IEA member countries.

The “11th Basic Plan for Electricity Supply and Demand,” issued by South Korea’s Ministry of Trade, Industry and Energy in 2025, is a national-level medium- to long-term electricity development plan that places greater emphasis on energy security to support the growing electricity demand driven by advanced industries such as data centers, semiconductors, chips, and battery manufacturing. By 2038, nuclear power is projected to account for approximately 35.2% of South Korea’s electricity generation, renewable energy for about 33%, and thermal power for roughly 20%. Specifically, installed capacity for solar and wind power is planned to reach 77.2 GW and 40.7 GW, respectively—doubling and increasing 17-fold compared to 2025 levels. The role of nuclear power has been strengthened; the Basic Plan proposes accelerating the construction of nuclear power plants, particularly by building two new large-scale nuclear power plants and promoting the implementation of a domestically developed SMR project.

On the industrial front, South Korea views battery technology as a key tool for enhancing the resilience of the power system and as a core energy industry. South Korea achieved mass production of lithium-ion batteries in the late 1990s and entered the electric vehicle supply chain after 2000, expanding rapidly. In the 2010s, with the explosive growth of the global new energy vehicle market, South Korean companies leveraged their technological advantages in ternary lithium-ion batteries to form deep partnerships with automakers and establish production capacity in Europe and North America, becoming a major dominant force in the global power battery industry for a time.

Currently, South Korea’s battery industry remains competitive in the global high-end power battery market, but the sector as a whole is undergoing a period of adjustment. Chinese companies’ advantages in lithium iron phosphate (LFP) and large-scale manufacturing continue to expand, leading to a decline in South Korean firms’ global market share. On the other hand, South Korea remains highly dependent on Chinese supply chains for critical upstream raw materials, creating another security constraint. Data from the Korea Economic Institute (KEI) shows that China supplies approximately 96.6% of South Korea’s cathode precursor materials, 93.7% of its synthetic graphite, and over 80% of its lithium hydroxide, covering the three core systems of battery raw materials.

Within the battery industry, Chinese and South Korean companies will continue to maintain a relationship of both competition and cooperation. South Korean companies hold an advantage in the U.S. market but generally lag behind Chinese firms in other overseas markets; consequently, the two nations often occupy complementary positions in the global supply chain. South Korea focuses on midstream manufacturing, while its upstream materials supply relies on China.

Southern Countries: Pathways Differ Based on Resource Endowments

Due to differences in resource endowments, the level of risk exposure varies among countries in the “Global South,” leading to divergent pathways for energy security and transition.

Brazil has achieved an extremely high rate of energy self-sufficiency by leveraging its abundant domestic oil and gas resources and unique energy structure. According to statistics from the IEA and IRENA, Brazil’s energy self-sufficiency rate exceeds 100%. It is South America’s largest crude oil producer and has established a bioethanol fuel defense mechanism based on domestic agricultural resources. Brazil has long promoted a dual-fuel vehicle program, with tens of millions of passenger vehicles capable of running on pure ethanol or gasoline blended with 27% to 30% bioethanol.

According to data from the Brazilian Sugarcane Industry Association (UNICA), during the 2023–2024 crushing season, sugarcane production in Brazil’s Central-Southern region reached a record high, with ethanol production exceeding 33 billion liters, which significantly cushioned the impact of fluctuations in international oil prices. However, vulnerabilities remain in its energy structure. Brazil relies on imports for 20% to 30% of the refined diesel used in heavy-duty transportation and agricultural machinery. To address this issue, Brazil plans to gradually increase the mandatory biodiesel blending ratio in diesel from the current 15% to 20%.

India lacks domestic oil and gas resources and is highly dependent on energy imports. According to IEA data, India’s energy self-sufficiency rate stands at around 65%, with nearly 87% of its oil coming from imports. More than two-thirds of its oil and nearly 50% of its natural gas must pass through the Strait of Hormuz. Following the outbreak of the crisis, the impact of energy shortages has been directly reflected in macroeconomic data. According to estimates by the Reserve Bank of India (RBI), every $10 per barrel increase in international crude oil prices directly reduces India’s overall economic growth (GDP) by approximately 0.2 percentage points and significantly drives up domestic inflation.

Industrial growth in Southeast Asia is highly dependent on external fossil fuels. According to IEA data, driven by the expansion of the manufacturing sector, ASEAN’s energy demand has grown at an average annual rate of over 3%, and the region became a net energy importer around 2015; by 2025, its overall energy dependence on external sources is projected to rise to around 25%, with oil and gas products alone exceeding 60%.

Oil-exporting countries such as Brunei and Malaysia rely on domestic resources to secure supply and are relatively unconcerned. Countries partially dependent on imports, such as Indonesia and Vietnam, face a dilemma between oil imports and coal and natural gas exports, requiring them to strike a balance between generating foreign exchange through exports and guarding against imported inflation. Countries highly dependent on oil and gas imports, such as Singapore, Thailand, and the Philippines, face systemic threats. Oil price hikes and dwindling reserves triggered by supply disruptions have severely impacted the region’s manufacturing sectors, which have long relied on low-cost energy.

Africa possesses significant energy potential but suffers from weak infrastructure, exhibiting the characteristic of “low production and even lower consumption.” IEA data shows that, when calculated based on total primary energy, Africa’s energy self-sufficiency rate exceeds 100%. However, this is not due to an abundance of energy supply in Africa, but rather because the majority of Africans lack the means to access modern energy. The region holds nearly 60% of the world’s solar energy potential, yet over 600 million people live without electricity.

Faced with sudden supply disruptions, Southern countries have prioritized maintaining economic operations and social stability in the short term, implementing various emergency measures. Take India as an example: from March to April 2026, the government issued a natural gas allocation order requiring refineries to prioritize the supply of liquefied petroleum gas (LPG) for domestic use while cutting off gas supplies to non-essential commercial sectors such as the food service industry. On the crude oil import front, India took advantage of a temporary U.S. exemption to increase its crude oil imports from Russia by 90% month-on-month in March, purchasing approximately 30 million barrels, and urgently expanded alternative oil sources from African countries such as Angola and Gabon.

In other regions, countries such as Vietnam and Thailand temporarily set aside their emissions reduction targets and reintroduced coal as an alternative fuel to fill the natural gas gap. The Brazilian federal government, meanwhile, temporarily suspended federal taxes on fuels such as diesel and gasoline, sacrificing short-term fiscal revenue to curb inflation.

In the long term, the risk of energy supply disruptions has prompted Southern nations to prioritize the transition to new energy as a fundamental path to ensuring economic security, aiming to break free from excessive reliance on imported energy. India has urgently accelerated its clean energy transition. Starting in March 2026, the Ministry of New and Renewable Energy added specialized tenders for commercial and industrial rooftop solar power and large-scale battery energy storage systems to its existing annual 50-gigawatt renewable energy tender plan; simultaneously, in the transportation sector, India has not only accelerated the “PM-eBus Sewa” initiative—which directly subsidizes the procurement of tens of thousands of pure electric buses—but has also introduced tax incentives for the electrification of two- and three-wheeled logistics fleets, striving to eliminate reliance on imported diesel and gasoline in last-mile logistics.

In Southeast Asia, Indonesia has adopted a pragmatic dual-track strategy: on one hand, it continues to leverage its vast domestic coal resources to support key industries such as nickel smelting, thereby maintaining its position in the global supply chain; on the other hand, capitalizing on its advantages in critical battery metal resources, it is actively attracting foreign investment to build a domestic lithium-ion battery supply chain.

Vietnam, which is already deeply integrated into global supply chains, has also immediately accelerated its transition to new energy sources. Starting in March 2026, the Ministry of Industry and Trade will expand the scale of direct power purchase agreements for enterprises and introduce a “special approval” incentive mechanism for rooftop solar projects in industrial parks, allowing multinational manufacturing companies to achieve 100% self-generation and self-consumption—provided they install energy storage systems—and to proceed with rapid construction; simultaneously, senior Vietnamese government officials established an inter-ministerial steering committee to create an administrative “green channel” for the first batch of core offshore wind power projects under the “Eighth National Power Development Plan.”

In Africa, the key to energy vulnerability lies in the extremely weak centralized grid infrastructure. To address this existential crisis, many African countries are accelerating the development of distributed renewable energy. Due to low grid coverage, ordinary households and small and micro-enterprises in Africa have long relied on expensive fuel-powered generators, making it difficult for them to bear rising electricity costs when oil prices increase.

The “Mission 300” initiative, jointly launched by the World Bank and the African Development Bank, will enter an intensive implementation phase in 2026. The initiative utilizes international funding to provide large-scale subsidies for microgrids and household solar systems in countries such as Rwanda and Tanzania.

At the national policy level, Nigeria has fully implemented the $750 million “DARES” (Distributed Access to Renewable Energy) national project, which aims to provide solar distributed power systems to more than 17.5 million people currently without electricity. The initiative prioritizes subsidies for small and micro-enterprises to replace diesel generators with distributed solar-storage systems. To support this project, Nigeria has waived import duties on photovoltaic and energy storage equipment. Kenya is also accelerating its “Off-Grid Solar Access Program” and rapidly constructing standalone solar microgrids. These policies are helping African citizens break their dependence on expensive fuel in a cost-effective manner.

Under the impact of this crisis, countries in the Global South have elevated “energy security” to a higher priority. The new concept of security is no longer limited to increasing fossil fuel reserves but involves building greater resilience through diversified supply and technological self-reliance. Faced with the pressing demands of survival and development, countries in the Global South are pursuing a two-pronged approach: prioritizing the security of fossil fuel supplies in the short term while accelerating the development of new energy sources in the long term. Essentially, this is a battle to safeguard “energy security” aimed at achieving supply autonomy, price stability, and system controllability.

 

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