Oil consumption plummets and EV sales soar as analysts say demand may not fully return even if crude price falls China’s carbon dioxide emissions fell by 1% after the outbreak of the US-Israeli war on Iran, thanks to a sharp reduction in oil consumption and a steady rise in the use of electric vehicles and public transport, analysis shows. The report reveals the role of clean energy in cushioning the price shocks caused by the strait of Hormuz crisis to the world’s biggest oil importer. It also
China’s carbon dioxide emissions fell by 1% after the outbreak of the US-Israeli war on Iran, thanks to a sharp reduction in oil consumption and a steady rise in the use of electric vehicles and public transport, analysis shows.
The report reveals the role of clean energy in cushioning the price shocks caused by the strait of Hormuz crisis to the world’s biggest oil importer. It also reinforces hopes that China, which is the world’s biggest greenhouse gas emitter, may be nearing a turning point in decarbonising its economy.
China was able to increase overall transportation use, despite cutting oil imports by 32%, according to second-quarter energy data reported by the country’s National Bureau of Statistics and analysed for Carbon Brief by the Centre for Research on Energy and Clean Air.
The reduction – equivalent to about a million barrels a day – from the world’s biggest petro-customer helped to stabilise global oil prices, which nevertheless surged by about 60% in the weeks and months after the first US airstrikes in late February.
How that was achieved has been the subject of considerable speculation. The analysis indicates that about two-thirds of the fall in imports came from running down, rather than building up, strategic oil stockpiles. The remaining third was largely covered by a reduction in demand.
The country’s use of oil fell by 9% overall and by 16% for transport. While large numbers of petrol and diesel vehicles stayed off the roads, there was a surge in journeys by electric cars, buses, trains and trucks.
This electrifying trend had begun long before the strait of Hormuz crisis. China is by far the world’s biggest manufacturer, user and exporter of batteries, e-vehicles, wind turbines and solar panels. The disruption of oil supplies from the Gulf has strengthened the economic and strategic imperative of reducing petro-dependence.
In the first half of 2026, China’s shift towards electric vehicles displaced the equivalent of the UK’s entire oil consumption over a six-month period.
Analysts predict much of this demand will not return even if global oil prices fall. “In a qualitative sense, there’s no question that the transport sector decarbonisation has been accelerated,” said Lauri Myllyvirta, the lead analyst at the Centre for Research on Energy and Clean Air. “It’s a validation of the energy security strategy that China has in place … It’s very clear that electrification is the winning strategy to insure against these kinds of shocks.”
Myllyvirta noted this was the first time China’s overall emissions had fallen due to a reduction in oil use rather than in coal consumption.
In fact, coal generation rose during the quarter due to shifting economic incentives and delays in adapting the country’s grid, which caused considerable wastage of wind and solar power. Despite this, observers believe the longer-term trend in China is away from fossil fuels.
Dr Muyi Yang, a senior analyst at Ember, which will next week publish a separate overview of China’s energy trends, said a fossil fuel peak was coming into view at the provincial and sectoral level. “The Iran crisis reinforces the case. The way China has been able to absorb its impact strengthens the confidence to go deeper and further.
“The risk of oil-import dependence increasingly comes from the geopolitical domain. This is a risk no country can effectively manage. So the more effective strategy is to reduce that exposure altogether. And China’s experience is demonstrating that this works.”
