"Security, cheapness, and cleanliness" are the three elements of energy, and this Middle East crisis highlights the "security" element, which is beneficial for fossil energy in the short term, but in the long run, it will strengthen the internal driving force for the transformation of new energy.

Chinese readers have long since become accustomed to the fact that the (mobile) phone screen is the new energy (news), and the windmills, photovoltaic panels and electric cars that are everywhere also make people believe that we are already in a new energy world. It was only when the Strait of Hormuz was blocked that people realized that this is still a world driven by fossil energy.

According to the International Energy Agency (IEA), 80.2% of global energy consumption in 2024 is supported by fossil energy, including 27% coal, 29.8% oil, and 23.4% natural gas. The other 19.8% of energy consumption includes 6.3% hydropower and 5% nuclear power, both of which are traditional energy sources, while the real new energy only accounts for 8.5%.

Even with the world's largest new energy industry, China's non-fossil energy will only account for 21.7% of total energy consumption by 2025, with wind and solar power accounting for 9.5% and other new energy sources such as biomass, geothermal, and marine energy accounting for 3.2%.

So while technological and engineering advances have reduced the time to build a 1 million-kilowatt photovoltaic plant to six to 12 months, the decisions made first when missiles and drones can keep oil tankers from even venturing into the Persian Gulf ports are not to build new photovoltaic plants, but to revive abandoned coal-fired power plants and idle nuclear power plants.

What about in the long term? After the fires of war in the Middle East subside and the straits resume smooth passage, will energy-importing countries go on as usual, or will they re-examine energy security and accelerate energy transformation?

First of all, this depends on how long the war will last, and no one can predict this at present, nor can anyone guarantee that the war will not break out again. According to the research report issued by Changjiang Securities on March 8, if the Strait of Hormuz is blocked for a long time, the global demand for coal for power generation will increase by more than 80 million tons per year.

Second, the political factors of energy issues need to be considered. Energy is the foundation of modern civilization, and energy has never been an ordinary commodity, except for fuel and raw materials, it is also the source of power. On March 23, Chris Wright, the US Energy Secretary, said at the Cambridge Energy Week that natural gas is the super power of the United States. President Trump has publicly called on oil-deficient countries to buy American oil many times during the war, he said: "We have plenty of oil."

Since the 1950s, the United States has been the world’s largest net importer of energy. Energy independence has been the dream of every president since Nixon, and under Trump, the dream came true in 2019 when the United States became a net exporter of energy. By 2025, U.S. crude oil production will account for nearly 20 percent of global production, almost the sum of Saudi Arabia and Russia; natural gas production will account for 27 percent of global production, nearly twice that of second place Russia.

Before Trump took office, energy transition was the key term in the global energy industry. After the Paris Agreement was signed by various countries in 2015, energy transition entered a climax period conceptually and operationally. However, Trump withdrew from the Paris Agreement twice, and his government fundamentally denied that climate change was related to human activities.

So far, only the United States has withdrawn from the Paris Agreement, and only Argentina has expressed its intention to withdraw. Addressing climate change is still considered politically correct globally, but the negative impact of the United States is spreading, and the voice of those denying that climate change is related to human activities is becoming more and more. If this voice becomes the mainstream, the moral foundation of the global energy transition will be shaken. Those coal-fired power plants that have been reopened in an emergency may continue to be reopened.

Finally, while the pace of the global energy transition will be influenced by the US, for the vast majority of countries in the world, political considerations are still secondary, as long as the new energy is fully ahead of the old energy in the three elements of "supply security, cheap price, and clean use", the transformation of new and old energy is unstoppable.

New energy, which is localized in deployment, has natural security. The director general of the International Energy Agency, Fatih Birol, has called solar and wind energy "peaceful energies," saying, "Countries that are dependent on imported oil and gas are very vulnerable to geopolitical shocks, but once solar panels and windmills are built on your soil, no one can switch off the sun and the wind."

In the past decade or so, wind and solar power have gradually become cheaper than fossil energy, which is the result of continuous technological progress, and China has made great contributions to it. Today, the cost of wind and solar power has generally become lower than that of coal power, gas power, and nuclear power. In the Middle East, where the sunlight is strong, the cost of solar power sold to the grid is as low as 1.0-1.5 US cents, while the cost of European gas power sold to the grid is 10-14 US cents, and the cost of Chinese coal power sold to the grid is 4.5-6.0 US cents.

The bottleneck of large-scale use of wind and solar power is the power grid. The power grid around the world was built in an era when thermal power was the main source, and it is designed to be compatible with an uninterrupted power supply of 365×24. However, wind and solar power are intermittent power sources constrained by weather changes, so the power grid around the world needs to be transformed for flexibility, which means huge investment and also means a continuous source of economic growth.

So even in the United States, there is still a large amount of capital being invested in renewable energy. And while oil and gas companies have been making profits in recent years, executives are still worried, cheering along the Energy Secretary while knowing full well that the future is not on their side.

China: Resilience put to the test

As the world's largest importer of crude oil, the world's largest consumer of energy and the world's second largest economy, China has shown a stronger ability to resist risks in this crisis of the closure of the Strait of Hormuz. According to S & P Global statistics, China is the largest buyer of Middle East oil. In 2025, 14.9 million barrels of crude oil per day were exported through the strait, of which 35.6% went to China.

The resilience of China's energy system is woven by two main threads: one revolves around the security of oil supply, expanding overseas upstream resources, diversifying import sources and channels, and building strategic reserve systems; the other is based on the local resource endowment, with coal as the bottom-line guarantee, and is driven by low-carbon strategies and industrial policies, forming a vast green energy manufacturing and power supply system.

Although China’s import of oil accounts for a large proportion of its total energy consumption, the overall energy mix is dominated by "coal power + renewable energy". By 2025, oil and natural gas will account for 18.2% and 8.7% of China’s total energy consumption respectively, of which about 73% and 38% are imported. Coal and non-fossil energy will account for 73% of the country’s total energy consumption, all of which are met by domestic supply; adding domestic crude oil and natural gas, China’s overall energy self-sufficiency rate will approach 84%.

Especially since 2020, the leapfrog development of wind and solar power has made non-fossil energy one of the main energy sources. From 2021 to 2025, about 45% of the new energy consumption in the country will come from non-fossil energy, reaching 76% by 2025.

China's anxiety over oil security has lasted for many years. China became a net importer of oil in 1993, and in 2009, China's import of oil exceeded 50% of its consumption for the first time; since then, it has increased year by year to about 73% in 2025, with the crude oil import volume reaching 570 million tons.

More than 20 years ago, industry experts and policymakers spoke more often about the geopolitical risks of the Strait of Malacca, a must pass for 80 percent of imported oil in East Asia. To diversify the concentration risk of a single channel, China has been deeply deploying overseas upstream oil and gas resources and multi-channel infrastructure since 2010 to expand the source of imports. According to the Economic and Technological Institute of China National Petroleum Corporation, the overseas oil and gas production rights of state-owned and private oil companies have reached 196 million tons by 2025. The combined transport capacity of the three major land crude oil pipelines, China-Russia, China-Kazakhstan and China-Burma, is 70 million tons per year, and the combined transport capacity of China-Russia and China-Central Asia natural gas pipelines is 93 billion cubic meters per year. According to market机构estimates, China's oil reserve scale can cover more than 100 days of import volume.

China’s crude oil imports increased by 72% in 2025 compared to 2015, but the sources have become more diversified. The share of the Middle East region decreased from 50.7% to 42.3%, while the shares of regions such as Russia, Asia, and the Americas increased. The volume of natural gas imports in 2025 was 1.7 times that of 2015. 45% of the imported natural gas came through pipelines on land, while liquefied natural gas (LNG) was distributed in Australia, Qatar, and Southeast Asia.

Unlike oil and gas resources that rely heavily on imported supplies, China's domestic power supply capacity can almost fully meet the demand. Coal - fired power remains an important base - load power source, accounting for 51.1% of the total power generation in 2025. Non - fossil energy power generation, including hydropower, wind power, solar power, nuclear power, and biomass power generation, has accounted for 42.9% of the total power generation. Moreover, the newly added renewable energy power generation can fully cover the incremental electricity consumption of the whole society. Due to the limitations of domestic resource endowment and considerations of energy security, natural gas is mainly used for urban gas and heating, industrial fuel, and peak - shaving power sources, and its proportion in power generation has always been relatively small, accounting for about 3% of the power generation.

Based on the low-carbon transformation goal of the whole society and the solid foundation of the new energy industry, China’s energy transition will continue to deepen and further reduce the dependence on imported energy. By 2035, China’s non-fossil energy share of energy consumption will reach more than 30 percent, the total installed capacity of wind and solar power will be more than six times that of 2020, and the combined share of wind and solar power will reach 60 percent of the total installed power capacity. Coal and oil consumption is expected to peak before 2030, and coal-fired power will turn to spare capacity and power generation will decrease; new energy vehicles will accelerate their penetration, and refined oil has already entered a gradual downward track, with only a small increase in crude oil demand for chemical needs.

Over the past decade, China has transitioned from the world's largest market for fuel-powered vehicles to the largest market for new energy vehicles. According to the IEA, China's electric vehicle sales have consistently accounted for more than half of the global total for several years. By 2025, China's electric vehicle parc is expected to represent 12% of the total vehicle fleet, and the new vehicle sales penetration rate has already approached 60%. The IEA notes that even at an oil price of $40 per barrel, the total cost of ownership for electric vehicles in China remains lower than that of fuel-powered vehicles.

China's new energy manufacturing industry and market scale have started from years of industrial policies, and have been continuously improving technology and reducing costs in fierce competition, forming a complete and massive industrial chain system. Clean energy and electrification have become an energy supply with economy and autonomy, and have become a new growth point of the economy in the period of deep adjustment of the macroeconomic structure.

The National Development and Reform Commission cited United Nations data, saying that in 2024, China's clean energy sector contributed 10 percent of the country's GDP and accounted for 26 percent of the year's GDP growth. Also, according to the General Administration of Customs of China, the export scale of "new three", namely electric vehicles, photovoltaic products, and lithium batteries, approached 1.3 trillion yuan in 2025, a 3.5-fold increase from 2020 and accounted for 4.7 percent of the total exports.

In today's global transition, geopolitical factors amplify the supply and price fluctuations of oil and gas. With risk becoming "certainty," the closure of the Strait of Hormuz, which has never been substantially blocked before, has become a reality, even if the market still maintains a loose expectation of oil and gas supply. The "scarring effect" will also push up risk premiums and various shipping costs, such as freight, insurance, and strait tolls, for a long time.

This will change the calculus of many economies on the necessity of energy transition, increase the supply of domestically based energy, and the demand for new energy will be stimulated in the wake of this war in the coming years, the practice of China's green industry has shown that transition does not necessarily correspond to higher costs or "green premium".

For China's new energy industry, the current Middle East crisis will bring another window of external demand expansion. At the same time, the dividends of "easy globalization" have been exhausted, the binding force of global trade rules is weakening, and unilaterally imposed tariffs and investment barriers are emerging in an endless stream. Chinese new energy enterprises need to enter the global market through more complex means such as building overseas factories, technology transfer, and establishing smooth supply chains.

United States: Consolidating the Oil and Gas Empire

Based on the resource endowments of the United States, the Trump administration established an energy strategy centered on oil and gas.

In the "National Security Strategy of the United States" 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, promoting the return of key energy equipment and industrial chains, and achieving low - cost and sufficient domestic energy supply, it supports the development of re - industrialization and advanced technologies such as AI. By expanding net energy exports, it strengthens alliance relations, weakens competitors, and enhances its external influence.

Before the Russia-Ukraine conflict, the United States accounted for only 4% of the EU's LNG import sources, but it surged to 41% in 2022 and increased to over 50% by 2025, becoming the EU's largest LNG supplier. After the outbreak of the US-Israel-Iran war, some Asian countries turned to the United States to "snatch" oil due to disruptions in Middle East supplies. According to the commodity shipping information agency Kpler, the United States is expected to export 156 million barrels of crude oil in April 2026, an increase of 33% compared to the previous month, setting a historical high.

Oil and natural gas occupy the absolute main body of the US energy consumption structure. By 2025, oil and natural gas will each account for more than 36% of the US primary energy consumption structure, while coal, renewable energy and nuclear power will be close to each other, each accounting for about 9%.

After the shale revolution broke out during the high oil prices period of 2007-2008, the US oil and gas production increased rapidly from 2009. In 2014, the US oil production exceeded Saudi Arabia, becoming the country with the highest oil production in the world for the first time; thus, it pulled the international oil price center from 100 USD/bbl up and down to 50-60 USD/bbl. By 2025, the US crude oil production accounted for nearly 20% of the global total, almost the sum of the production of Saudi Arabia and Russia; the growth curve of natural gas was similar, accounting for 27% of the global total that year, while Russia, the second largest producer, accounted for only 15%.

To make the case for increased oil and gas production, one of the most common slogans that Trump used was: "Drill, baby, drill."

According to the U.S. Energy Information Administration (EIA), in 2025, U.S. crude oil production increased by 3%, setting a new record of 13.60 million barrels per day; during the same period, natural gas production also reached a historical high, reaching 118.5 billion cubic feet per day.

In view of the need to increase infrastructure to match the increase in natural gas exports, the export capacity of natural gas in the United States and in Canada and Mexico will grow rapidly in the coming years. EIA statistics show that if the projects under construction are operated as planned, the export capacity of LNG in North America will increase from 114 billion cubic feet per day at the beginning of 2024 to 287 billion cubic feet per day in 2029. By 2029, the new export capacity of LNG in North America will account for more than 50% of the global expected increase.

Beyond boosting domestic oil and gas production, the Trump administration has sought to control more oil and gas resources outside the United States to enhance America's energy voice.

The Trump administration has positioned Canada and Mexico's oil and gas as a "safe, low-cost supplement to domestic U.S. energy" and hopes to dominate the oil and gas market in North America with tariffs and trade policies. In addition, the Trump administration also supports the construction of cross-border oil and gas pipelines in Canada and Mexico to transport more Canadian crude oil to the U.S. mainland and also to sell more U.S. natural gas to Mexico.

The United States forcibly controlled President Maduro of Venezuela, and thus controlled the country's oil reserves, as well as the production and sales of oil in the country. Venezuela is the country with the largest oil reserves in the world and is the founding member of the Organization of Petroleum Exporting Countries (OPEC). Due to the lack of investment and development, Venezuela's crude oil production in 2025 is only about 9 million barrels per day, accounting for less than 1% of the global crude oil total production. Trump called on US companies to increase investment in Venezuela and gain dominance over the country's oil and gas resources.

Despite the Trump administration's efforts to extend the oil age at all costs, the interests of the US federal government and state governments are not perfectly aligned. Some state governments, based on local resource endowments and industrial bases, are still rapidly developing renewable energy.

Meeting the rapidly growing electricity demand is an urgent priority for some state governments in the United States. The growth of electricity demand in the United States had stagnated from 2010 to 2019, but since 2021, electricity generation in the United States has been growing at an average rate of 2% per year. According to EIA statistics, the United States set a new record for electricity generation in 2025, increasing by 2.8% compared to 2024, and it is expected that electricity generation in the United States will continue to grow in 2026 and 2027.

The fastest development of wind, photovoltaic and energy storage in the United States is in Texas and California, which both have better resource conditions and industrial foundation. The amount of solar power generated by the Electric Reliability Council of Texas (ERCOT) is expected to increase from 56 billion kilowatt-hours in 2025 to 106 billion kilowatt-hours in 2027; the battery storage capacity will increase from about 15 gigawatts in 2025 to 37 gigawatts by the end of 2027.

Meanwhile, with its deep foundation in the nuclear power industry, the United States has seen a revival of nuclear power, which has been included as a core option by U.S. policymakers. The U.S. regulatory authorities are systematically extending the operating life of nuclear power units and are actively promoting the development of new nuclear power technologies such as small modular reactors (SMRs) by simplifying the approval process.

The electricity demand of US tech companies has increased significantly due to the development of artificial intelligence and the rapid advancement of data center construction. Tech companies are the biggest financiers and drivers of the US nuclear power revival, and they are directly investing in nuclear power. Public information shows that the total investment of the four companies, Microsoft, Amazon, Google, and Meta, in the nuclear power field has exceeded $10 billion.

The development of commercial nuclear power plants in the United States began in the late 1950s, and most of the operating plants were built between 1967 and 1990. Today, the United States operates 94 nuclear power reactors, the largest producer of nuclear power in the world. In 2024, nuclear power provided 19% of the electricity generated in the United States.

In January 2026, the U.S. Congress passed the Energy and Water Development Appropriations Act for the fiscal year 2026, providing the Department of Energy's Office of Nuclear Energy with about $1.8 billion in annual funding and an additional $3.1 billion for the Advanced Reactor Demonstration Program. On March 24, James D. Danly, Deputy Secretary of Energy, stated at the "2026 Congress-Hill and Silicon Valley Forum" that the United States is committed to advancing a "nuclear renaissance," aiming to achieve critical operation of three to four SMR prototype units by July 2026.

In the context of rapidly rising electricity demand, the U.S. energy system is showing signs of fragmentation, according to Carlos Pascual, senior vice president for global energy at S&P Global, as reported by Caixin. On one hand, official policies are focused on oil and gas, nuclear power, and geothermal energy. On the other hand, the market is investing heavily in renewable energy sources, as they are the most feasible options at the moment and can be brought online relatively quickly.

Europe: Energy transition becomes more rational

The 2022 Russo-Ukrainian conflict severely damaged the European energy system, leading to fundamental changes in regional security goals and the economic industrial base. Four years later, the core oil and gas resource region has erupted into conflict once again, prompting Europe to comprehensively re-evaluate the strategic implications of energy autonomy. After experiencing policies that heavily favored climate goals in the past, Europe's energy strategy is returning to rationality, prioritizing the security and local control of energy supplies, and adjusting related policies based on these two goals.

Fossil fuels still dominate the EU energy mix. According to Eurostat data for 2025, oil and oil products, natural gas, and solid fossil fuels accounted for 68.7% of the EU's total energy consumption ( primary energy consumption ). The import dependence of energy has been maintained at a high level of 57% to 58% for a long time; among them, oil and natural gas are as high as 95% and 90%, and hard coal is 67%. Among these imports, about 20% of crude oil and more than 15% of natural gas come from Qatar.

The EU has made a historic breakthrough in its power mix. Eurostat data shows that the combined share of wind and solar power in the EU's electricity generation reached 30% in 2025, surpassing fossil fuel power (29%) for the first time. Following the outbreak of the Russo-Ukrainian war in 2022, the EU quickly launched the "REPowerEU" plan to accelerate the deployment of local new energy sources and completely get rid of dependence on Russian energy. By the end of 2025, the EU's wind and solar power installations had exceeded 300 gigawatts and 450 gigawatts, respectively, representing increases of 50% and 170% compared to 2021, accounting for 71.4% of the total power installation; battery storage exceeded 90 gigawatt-hours, increasing nearly 10 times.

The EU will continue to expand along this transformation path in the future. By 2030, the EU plans to have a total installed capacity of wind and solar power of 500 and 750 gigawatts, respectively, with a storage capacity expansion to 120 gigawatt-hours, accounting for 75.8% of the total installed capacity of power generation; by 2040, to meet the goal of reducing emissions by 90% across the entire economy, the EU's total installed capacity of wind and solar power will exceed 2,200 gigawatts, with storage reaching more than 400 gigawatt-hours. The combined share of wind and solar power will exceed 80% of the total installed capacity of power generation.

While the EU's ambitious goal of decarbonizing its power system has made significant progress, the continent's reliance on oil in the transport sector, the essential demand for natural gas in industry and for heating, combined with its high external dependence, remains a vulnerable point in its energy system.

Due to the difference in energy structure and geopolitical status, the major European economies (including EU member countries and non-EU countries) have been hit differently in this crisis. Specifically, they can be divided into three major camps:

The first category consists of countries that benefit significantly, with Norway being a typical example. According to data from the International Renewable Energy Agency (IRENA), Norway's overall energy self-sufficiency rate has consistently exceeded 700%, while also being the largest natural gas supplier to the EU, it has obtained substantial economic benefits.

The second group consists of countries with strong energy resilience, represented by EU members such as Sweden and Denmark. These countries have a high level of electrification, with more than 50% of their energy consumption coming from renewable sources and a low direct dependence on Middle East fossil fuels.

The third group is the countries that have been severely affected. The UK, as a major economy outside the EU, has experienced a long-term decline in North Sea oil and gas production, and its heating network is dominated by natural gas. After the sharp reduction in Middle East LNG supply, the UK faced a spot shortage shock. Major EU industrial countries such as Germany, Italy, and Poland have also been severely affected, with their industrial systems highly dependent on imported fossil fuels, and the manufacturing industry is facing the risk of production reduction.

After the crisis erupted, emergency measures in various European countries all focused on maintaining system stability. Italy’s emergency legislation postponed the closure of coal-fired power plants, which were originally scheduled to be closed by the end of 2025, until 2038; Germany slowed down its coal phase-out schedule, allowing some coal-fired power plants to be connected to the grid long-term as strategic reserves; at the EU level, emergency oil reserves managed by the IEA were prepared to be tapped. The UK emergency expanded the "demand-side flexibility services" of the national grid, guiding the reduction of peak electricity consumption through economic compensation, and fully utilized its domestic natural gas strategic reserve.

While adopting short-term contingency measures, the European decision-making level has deeply reflected on the energy policies of the past decade, first admitting that the previous policies of completely phasing out nuclear energy and radically phasing out coal were wrong. Ursula von der Leyen, President of the European Commission, said at the Nuclear Energy Summit held in Paris in March 2026: "It is a strategic mistake for Europe to abandon nuclear energy, a reliable, low-cost and low-carbon energy source." On the same day, German Chancellor Merz also said that Germany's abandonment of nuclear energy was a major strategic error.

According to the latest EU Nuclear Power Demonstration Plan, it is estimated that the EU will invest about 241 billion euros in nuclear power by 2050, increasing the total installed nuclear power capacity to 109 gigawatts. The increase of 109 gigawatts is not significant compared to the current 98 gigawatts, but under the original nuclear phase-out policy, a large number of nuclear power units would have been decommissioned, leading to a significant decrease in installed capacity.

Apart from the total capacity expansion, the EU also views the SMR technology, with its short construction period and low initial investment, as an important part of the future nuclear power layout. According to the EU’s recent "SMR Development Strategy," it plans to allocate 200 million euros from the Innovation Fund to provide risk guarantees and establish an "SMR Industrial Alliance" to build a local nuclear power supply chain. Meanwhile, the UK is also promoting nuclear power construction in parallel, aiming to achieve energy independence through local nuclear power.

Beyond nuclear power, accelerating the transition to renewable energy and other new energy sources also faces a huge funding test, with the EU expected to invest around €660 billion per year until 2030. To this end, the EU launched the Clean Energy Investment Strategy in March 2026, which aims to use public funds to leverage private capital. To achieve this, the European Investment Bank (EIB) will provide over €75 billion in financing over the next three years.

February 16, 2026, Niigata Prefecture, Japan, Control room of the No. 6 reactor at the Kashiwazaki-Kariwa nuclear power plant. Image/Visual China

To ensure that the energy transition does not come at the expense of people's lives, the EU has also introduced the Civil Energy Package. The package aims to directly reduce household energy costs by reducing the burden of electricity taxes and fees and simplifying the process of switching suppliers. More importantly, the bill strongly promotes the production and sharing of clean energy by citizens, encourages the development of "energy communities", and allows energy consumers to become energy producers, thereby fundamentally improving the level of energy security.

Based on the removal of financial and social barriers, the European Commission submitted a draft of the Industrial Accelerator Act to the European Council and the European Parliament on March 4th, aiming to significantly simplify the administrative approval process for new energy projects and accelerate the implementation of new energy projects. The Director General of the International Energy Agency, Fatih Birol, referred to solar and wind energy as "peaceful energies," saying, "Countries that rely on imported fossil fuels are highly vulnerable to geopolitical shocks, but once solar panels and wind turbines are built on your soil, no one can cut off the sun and the wind."

The real obstacle to promoting the transformation is that the global supply chains for photovoltaics, wind turbines, and batteries are highly concentrated in Asia, especially in China. Objectively speaking, Europe currently does not have the engineering and manufacturing capabilities to independently build a complete new energy industry chain, such as super battery factories. If the existing external supply chains are forcibly cut off, it will directly lead to a standstill in its own energy transformation. Simona Tagliapietra, a senior researcher at the Bruegel Institute, a European think tank, mentioned in a policy briefing on the risks of decoupling the European green supply chain: "Importing a set of solar photovoltaic equipment is a one - time trade transaction, while importing natural gas means a strategic dependence that lasts for decades."

Based on this cognitive shift, Europe gradually let go of its obsession with achieving "self-sufficiency" in the short term in the manufacturing of new energy sources, realizing that even if the manufacturing of new energy equipment is highly concentrated in Asia and inevitably relies on external supply chains, it does not pose a substantive threat to Europe's energy security.

Decoupling "energy use" from "equipment manufacturing" to a moderate extent, allowing Europe to quickly scale up and connect new energy using the mature global new energy supply chain. However, while leveraging external facilities to enhance energy security, Europe has not abandoned long-term support for local manufacturing. Through legislative and policy measures such as the Industrial Accelerator Act and the Clean Energy Investment Strategy, the EU hopes to use the leverage of public funds and the large internal market to gradually cultivate and perfect the manufacturing capabilities of key equipment for new energy in the local market.

Japan and South Korea: Nuclear power status is unprecedentedly strengthened

As typical countries with lack of resources, Japan and South Korea have long been highly dependent on imported energy. According to the IEA data, the energy self-sufficiency rates of the two countries are both below 20% (Japan 13%, South Korea 19%), and oil and natural gas are almost entirely imported.

This Middle East conflict has directly exposed the fragile energy supply chains of Japan and South Korea to risks. In the short to medium term, the two countries are still unlikely to break away from their dependence on the oil and gas system. They will strengthen cooperation at the industrial level with oil and gas resource countries including the United States, such as expanding long-term LNG procurement and participating in upstream development project investments. At the same time, geopolitical risks are also strengthening the security logic of energy transformation.

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

Due to the large import exposure, Japan announced the release of about 80 million barrels of oil reserves (equivalent to 45 days of consumption) in mid-March, two weeks after the conflict, setting a record high since the establishment of the reserve system in 1978. According to the Ministry of Economy, Trade and Industry of Japan, by the end of 2025, the total amount of oil reserves in Japan is equivalent to its 254 days of consumption, far exceeding the basic requirement of 90 days for IEA member countries.

The 1973 oil crisis hit Japan hard, which actively developed new energy and energy-saving technologies, and its technology in solar energy (perovskite), offshore wind power, hydrogen energy, lithium battery materials and nuclear power once led the world. However, at the stage of industrialization, there was insufficient support for large-scale manufacturing and industrial chain integration, and the limited domestic market scale, land and power grid and other factors restricted the promotion speed, which could not support the expansion of manufacturing and the reduction of cost, and Japan's new energy industry gradually lost its competitiveness.

The report from the Japan Industrial Institute shows that the global share of Japanese photovoltaic manufacturing once reached 50.4% in 2004, but has since declined significantly. By 2023, 87% of the photovoltaic components imported by Japan came from China, and domestic manufacturing can be almost ignored.

In February 2025, the Japanese government released the "Seventh Basic Energy Plan," which aims to increase the share of renewable energy in the power mix to 40%-50% by the fiscal year 2040. The plan strives to expand installed capacity and build a stable and low-carbon power supply system. Among these, the target for the share of photovoltaics is increased to 23%-29%, and wind power to 4%-8%. Due to geographical constraints such as the small area of flat land and the steep seabed topography, the focus of development is on rooftop photovoltaics and floating offshore wind power. At the same time, nuclear power, as an important low-carbon power source, aims to increase its share to around 20% by 2040.

Japan, which has a mature nuclear power industry, is still a realistic option for large-scale provision of stable, low-carbon, and controllable electricity. The government of Fumio Kishida has clearly positioned nuclear power as "quasi domestically produced energy" and is accelerating the restart of nuclear power plants, while also promoting the research and development and commercialization of small modular reactors and nuclear fusion technology.

Before the 2011 Fukushima nuclear disaster, nuclear power in Japan accounted for about 30% of the country's electricity generation. After the accident, all nuclear power plants were shut down for safety inspections and upgrades, and they were gradually复 ++)

Nuclear power in Japan has an immediate impact on the replacement of imported fuel. The US Energy Information Administration (EIA) notes that the installed capacity of the units reconnected in Japan in February is 1.356 million kilowatts, with an expected annual power generation of about 9.5 billion kilowatt-hours, which can replace about 1.3 million tons of LNG annually after the restart, accounting for 2% of the LNG import volume in 2025.

Like Japan, South Korea is also highly dependent on imported fossil energy, with about 61% of crude oil imports and 54% of naptha imports relying on the Hormuz route; since the outbreak of the Middle East war, the average operating rate of South Korean refineries has decreased by about 10%, and domestic naptha supply has declined by 10%-20%. According to IEA statistics, in 2024, fossil energy accounted for nearly 80% of South Korea's total energy consumption, while renewable energy accounted for less than 4%. In the power generation structure, nuclear power accounts for 31%, responsible for base load power supply.

IEA pointed out that although South Korea's renewable power generation increased significantly in 2024 compared to 2015, it only accounted for 8.6% of the total power generation, the lowest among IEA member countries.

The "11th Basic Plan for Power Supply and Demand" issued by the Ministry of Trade, Industry, and Energy of South Korea in 2025 is a national-level medium- to long-term power development plan that places greater emphasis on energy security to support the growth of power demand driven by advanced industries such as data centers, semiconductors, chips, and battery manufacturing. It is expected that by 2038, the share of nuclear power in South Korea will be about 35.2%, renewable power will be about 33%, and thermal power will be about 20%. Among them, the installed capacity of photovoltaic and wind power is planned to reach 77.2 gigawatts and 40.7 gigawatts, respectively, which are 2 times and 17 times the installed capacity in 2025. The status of nuclear power has been strengthened, and the basic plan proposes to accelerate the construction process of nuclear power, especially to build two new large nuclear power plants and promote a domestic SMR project.

On the industrial side, South Korea has treated battery technology as an important tool and core energy industry to enhance the resilience of the power system. South Korea achieved mass production of lithium batteries in the late 1990s, entered the electric vehicle supply chain after 2000, and rapidly expanded. In the 2010s, as the global new energy vehicle market exploded, South Korean companies, with their advantage in lithium iron phosphate battery technology and deep binding with vehicle manufacturers, established production capacity in Europe and North America, and once became the dominant force in the global power battery industry.

At present, the South Korean battery industry maintains competitiveness in the global high-end power battery market, but the overall industry is in a period of adjustment. The advantages of Chinese companies in lithium iron phosphate (LFP) and large-scale manufacturing are expanding, leading to a decline in the global market share of South Korean companies. On the other hand, the upstream key raw materials are still highly dependent on the Chinese supply chain, forming another security constraint. Data from the South Korean Economic Institute (KEI) shows that China provides about 96.6% of the cathode precursor materials, 93.7% of the artificial graphite, and more than 80% of lithium hydroxide, covering the three core systems of battery raw materials.

In the battery industry, Chinese and South Korean companies will continue to maintain a competitive and cooperative relationship. South Korean companies have an advantage in the US market, but they are generally lagging behind Chinese companies in other overseas markets. China and South Korea often play the role of upstream and downstream in the global industrial chain. South Korea focuses on midstream manufacturing, and the upstream material system relies on China.

Southern countries: Pathways differentiated by resource endowments

Due to differences in resource endowments, the risk exposure of "Global South" countries varies, leading to differentiation in energy security and transition paths.

Brazil has achieved a very high energy self-sufficiency rate by relying on its abundant domestic oil and gas resources and its special energy structure. According to the IEA and IRENA statistical data, Brazil's energy self-sufficiency rate exceeds 100 percent, making it the largest crude oil producer in South America, and it also has a bio-ethanol fuel defense mechanism based on domestic agricultural resources. Brazil has long implemented a dual-fuel vehicle program, and tens of millions of passenger vehicles can freely use pure ethanol or gasoline mixed with 27 to 30 percent of bio-ethanol.

According to data from the Brazilian Sugarcane Industry Association (UNICA), in the 2023-2024 sugarcane harvest season, the sugarcane production in the central-southern region of Brazil reached a historical high, and the ethanol production exceeded 33 billion liters, which greatly cushioned the impact of international oil price fluctuations. However, its energy structure still has vulnerable points. Brazil's refined diesel, used in heavy transportation and agricultural machinery, relies on imports for 20%-30%. To address this issue, Brazil plans to gradually increase the mandatory blending ratio of biodiesel in diesel from the current 15% to 20%.

India is short of domestic energy resources and highly dependent on energy imports. According to the IEA data, India's energy self-sufficiency is around 65%, of which nearly 87% of the oil relies on imports, and more than two-thirds of the oil and nearly 50% of the natural gas need to pass through the Strait of Hormuz. After the outbreak of the crisis, the impact of the energy shortage is directly reflected in the macroeconomic data. According to the calculation of the Reserve Bank of India (RBI), for every $10 increase in the international crude oil price per barrel, India's overall economic (GDP) growth rate will directly drag down by about 0.2 percentage points and significantly push up the domestic inflation level.

Southeast Asia's industrial growth is highly dependent on external fossil energy. IEA data shows that the energy demand in Southeast Asia has an average annual growth rate of over 3% driven by the expansion of manufacturing industry, and it has become a net importer of energy around 2015; the overall energy dependence will rise to about 25% by 2025, especially for oil and gas products, which have exceeded 60%.

Oil出口 countries such as Brunei and Malaysia, which rely on domestic resources to secure supplies, are relatively unscathed. Countries that are net importers, such as Indonesia and Vietnam, face a dilemma between imported oil and exports of coal and natural gas, and need to balance the need to export for foreign exchange with the risk of imported inflation. Singapore, Thailand, the Philippines and other countries that are highly dependent on oil imports are facing systemic threats. The rise in oil prices and the depletion of reserves following supply disruptions have severely impacted the manufacturing system in the region, which has been built on low-cost energy.

African energy potential is large but infrastructure is weak, presenting the characteristics of "low production and even lower consumption". IEA data show that if calculated by the total amount of primary energy, Africa's energy self-sufficiency rate exceeds 100%. However, this is not due to an abundance of energy supply in Africa, but the fact that most Africans lack the conditions to use modern energy. The region has nearly 60% of the world's solar energy potential, yet it has more than 600 million people without access to electricity.

Faced with the sudden disruption in gas supply, southern countries have taken a variety of emergency measures to prioritize the maintenance of economic operation and social stability in the short term. Taking India as an example, from March to April 2026, the government issued a natural gas distribution order, forcing refineries to prioritize the supply of domestic liquid petroleum gas for civil use and cutting off gas for non-core commercial uses such as catering; at the crude oil import end, India took advantage of a temporary exemption from the United States, with crude oil imports from Russia surging by 90% month-on-month in March, purchasing about 30 million barrels, and urgently expanding alternative oil sources in Africa such as Angola and Gabon.

Elsewhere, countries such as Vietnam and Thailand have temporarily shelved emission reduction targets and reactivated coal as an alternative fuel to fill the gap left by natural gas. The Brazilian federal government once announced a federal tax holiday on fuels such as diesel and gasoline to curb inflation in the short term at the expense of fiscal revenue.

In the long term, the risk of energy supply disruption prompts southern countries to prioritize new energy transition as a fundamental path to ensure economic security, aiming to reduce excessive reliance on imported energy. India has urgently accelerated the process of clean energy substitution. Starting from March 2026, the Ministry of New and Renewable Energy of India has added special tenders for rooftop photovoltaic systems and large-scale battery energy storage systems for industry and commerce on the basis of the original annual 50 gigawatt renewable energy bidding plan; at the same time, in the transportation sector, India has not only accelerated the "PM-eBus Sewa" plan to directly subsidize the purchase of tens of thousands of electric buses but has also introduced tax incentives for the electrification of two-wheeled and three-wheeled logistics fleets, aiming to become independent from imported diesel and gasoline in the logistics sector.

In Southeast Asia, Indonesia has adopted a pragmatic dual-track strategy: on the one hand, it continues to utilize its vast domestic coal resources to support key industries such as nickel smelting, maintaining its position in the global supply chain; on the other hand, it actively attracts foreign investment to build a local lithium battery industry chain by leveraging its resource advantages of battery critical metals.

Vietnam, which has already been deeply integrated into the global supply chain, has immediately accelerated its transition to new energy. Starting in March 2026, the Ministry of Industry and Trade of Vietnam has expanded the scale of direct power purchase agreements for enterprises and introduced an "expedited" incentive mechanism for rooftop photovoltaics in industrial parks, allowing multinational manufacturing enterprises to achieve 100% self-consumption and rapid construction under the premise of configuring energy storage; at the same time, senior Vietnamese government officials have established a cross-departmental guidance committee, which has opened up an "expedited" administrative approval channel for the first batch of core offshore wind power projects in the "Eighth National Power Development Plan".

In Africa, the key to energy vulnerability is the extremely weak centralized grid infrastructure. To address the survival crisis, many African countries are accelerating the construction of distributed new energy. Due to the low grid coverage rate, ordinary households and small and micro enterprises in Africa have long relied on expensive fuel generators, and it is difficult to bear the increase in electricity prices when oil prices rise.

The World Bank and the African Development Bank’s joint initiative, the "300 Million Electrification Program" (Mission 300), enters its intensive implementation phase in 2026. The program uses international funding to provide subsidies for the large-scale deployment of microgrids and household solar systems in countries such as Rwanda and Tanzania.

On the national policy level, Nigeria has fully implemented the "DARES" (Expanding Distributed Access through Renewable Energy Sources) national-level program with a total investment of $750 million. The goal is to provide solar distributed power systems to more than 17.5 million people who are still not connected to electricity, and to focus on subsidizing small and medium-sized enterprises to replace fuel generators with distributed photovoltaic and energy storage systems. To support this project, Nigeria has reduced import tariffs on photovoltaic and energy storage equipment. Kenya has also accelerated the "Off-Grid Solar Access Program", which has been densely constructing independent solar microgrids. These policies are helping the people of Africa to cut off the reliance on expensive fuel in a cheap way.

Global southern countries have placed "energy security" at a higher priority under the impact of this crisis. The new security concept is no longer confined to increasing fossil energy reserves, but is about building stronger resilience through diversified supplies and technological autonomy. Driven by rigid demands for survival and development, southern countries are pursuing a dual approach, with a short-term priority on ensuring supplies of fossil energy and accelerating the development of new energy in the long term. Essentially, this is a " energy security" defense battle aimed at achieving supply autonomy, price stability, and system controllability.

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