The sun rises in China: The closure of Hormuz opens the door to renewable energy
A record level of American crude oil exports has caused its stockpiles to fall to their lowest level since 2004, after reserves were drawn down to compensate for the global petroleum shortage that followed 100 days of war on Iran; a war that brought with it the closure of the Strait of Hormuz and the disruption of Gulf oil flows.
At first glance, this data might lead us to conclude that the United States is the war’s biggest beneficiary in the energy export arena. But the reality on the ground tells a different story: China, America’s fiercest rival, has also reaped significant gains from the closure of Hormuz.
It is true that the heightened sense of risk around energy supply disruption has, in the short term, boosted demand for American oil. But it has equally pushed many governments to expand their imports of solar energy equipment to secure energy over the long term; and China is, of course, the world’s largest exporter of such supplies.
Who benefits from the Iranian War?
Earlier this month, Reuters data showed that US crude oil exports reached an unprecedented level in May of 5.58 million barrels per day. Given that exports in the period before the war were hovering below 4.5 million barrels per day, the figure is striking.
Yet the gains were not exclusively American. Reuters had also reported weeks earlier that the latest Chinese data at the time pointed to significant growth in solar cell exports, which rose by around 60% in April 2026 compared to the same month in the year prior.
Developing countries recorded their highest-ever levels of solar energy equipment imports at the peak of the war
Earlier reports indicate that China experienced a notable surge in solar energy equipment exports since the outbreak of the war on Iran, driven by rising global oil prices that generated widespread anxiety about the risk of energy supply disruptions.
Alongside this, data from the Ember research center show that developing countries, including Egypt, recorded their highest-ever levels of solar energy equipment imports during March, at the peak of the war.
In this context, the Egyptian Ministry of Electricity announced in May the streamlining of procedures for citizens to contract the installation of solar power stations and rooftop panels. This suggests that anxiety over fossil fuel supply disruption has translated into greater uptake of renewable energy as CEO of OneraSystems Wael El-Nashar confirmed.
Speaking to Al Manassa, El-Nashar notes that the wartime expansion in solar energy appears to follow a recurring pattern: “Every time our country faces a crisis, people turn to solar. It’s natural. But the moment it passes, everything reverts to the status quo.”
Is the carbon bet a strategic mistake?
Defending and expanding fossil fuels has been a consistent political and economic priority for US President Donald Trump. Across both his 2016 and 2024 campaigns, he framed climate policies not as an environmental necessity but as a strategic burden, going so far on one occasion as to describe climate change as a “hoax” orchestrated by what he called a “politicized scientific community” serving Chinese national interests.
With his return to the White House for a second term, this trajectory accelerated, culminating in executive actions rolling back a range of climate initiatives, loosening restrictions on fossil fuel expansion, and suspending aspects of federal support for clean energy projects that had been approved under previous legislation.
Recently, this strategy has taken on an increasingly geopolitical dimension. In early 2026, the United States launched Operation Ironhand to capture Venezuelan President Nicolás Maduro, dramatically reshaping the relationship between the two countries.
The operation was officially framed in security terms, but its effects quickly rippled through global energy markets, repositioning Venezuela — home to the world’s largest oil reserves — swiftly within this US-aligned energy framework, with a renewed focus on ramping up production and redirecting supply chains.
Whether or not the takeover amounted to direct control, the broader message was clear: energy security and geopolitical leverage had become further intertwined. Washington was not merely seeking to produce traditional energy; it was seeking to rewrite the terms under which it is traded globally.
The more expensive and financially destabilizing oil becomes, the more attractive alternative energy sources grow
Unlike the Venezuelan case, Trump’s war on Iran produced effects that worked against the logic of betting on traditional energy, particularly with the closure of the vital Strait of Hormuz, through which around 20% of the world’s oil passes. Barrel prices climbed to over $100, having hovered around $70 before the war.
For many countries, especially those in the Global South, these developments mean more than just higher energy costs; they represent acute pressure on the balance of payments.
It is in these circumstances that the logic of reliance on fossil fuels begins to crack. The more expensive and financially destabilizing oil becomes, the more attractive alternative energy sources grow. For much of the Global South, solar energy sits at the top of that list.
Chinese expansion, weakened currencies
The boom in Chinese solar cell exports reflects deeper structural shifts playing out in countries like the Philippines and the Democratic Republic of Congo, where demand is driven by small businesses and energy-poor rural populations seeking alternatives to unstable and costly fossil fuel supplies.
In Pakistan too, within just a few years, Chinese solar panels have come to provide 20% of electricity generated off the main grid, helping the country avoid the worst fallout from the Iran war.
Against this surging demand for renewable energy supplies, the only constraint on appetite for Chinese products is the weakness of importing countries’ currencies, according to Mark Blyth, professor of international political economy and director of the Rhodes Center for International Economics and Finance.
“The idea is very simple,” Blyth tells Al Manassa. “What is the biggest constraint facing any developing country? A weak currency.” He explains that the core imports of Global South countries — from fuel and machinery to food and industrial inputs — are typically purchased in foreign currencies such as the dollar and the euro, creating a recurring dependence on external financing and dollar flows.
The problem is compounded when hot money leaves developing economies during moments of turbulence, as happened in Egypt in 2022, when the external shock of the Russia–Ukraine war triggered a capital outflow of $25 billion.
Yet against all these obstacles, solar energy equipment imports carry a strategic significance that sets them apart. Unlike fossil fuels, which require continuous dollar-denominated purchases, solar panels represent a one-time capital investment capable of generating electricity locally for decades at minimal running costs. Furthermore, solar technology costs have fallen by 80%, a shift driven in large part by China’s enormous capacity to scale up green manufacturing industrially.
In this sense, the significance of cheap Chinese solar panels for developing economies is far more than clean energy alone: they are a pathway to reducing one of the largest sources of their recurring dollar dependence — oil imports.
What stands out is that China was fully prepared to seize the opportunity created by the war in Iran. It had already come to dominate the solar energy industry at every level and across every stage of production, holding 96% of global polysilicon manufacturing, 96.2% of solar wafer production, 91.3% of solar cell production, and 80.1% of finished panel production.
This dominance traces back to China’s investment of more than $130 billion in the solar sector in 2023 alone, alongside an industrial strategy built on clear vertical integration, securing control over raw materials and components first, then commanding the finished product.
Why is Egypt falling behind?
Egypt is among the developing economies hit hardest by the recent oil shock. In March, Prime Minister Mostafa Madbouly said that the country’s monthly energy import bill had surged sharply, reaching between $2 and $2.5 billion at the peak of the pressure.
In response, the government took emergency measures to curb electricity consumption. These included reducing commercial operating hours by requiring shops to close early in the evening, alongside expanding remote work for a large number of employees.
This very vulnerability is what renewed interest in solar energy as a structural solution. Wael El-Nashar, drawing on decades of experience in the sector, observes that the core barrier to expanding renewables is both financial and institutional. Without sustained political commitment and accessible financing mechanisms, he argues, the waves of crisis-driven interest fail to translate into meaningful, lasting structural change.
In April, Madbouly said that Egypt is capable of meeting its 2028 target of raising the share of renewables in electricity generation to 45%. Yet despite the economic logic behind solar expansion, many within Egypt’s financial sector remain skeptical about the country's ability to achieve its renewable energy ambitions at the pace officials envision.
A senior sustainability expert at one of Egypt’s large private banks who spoke to Al Manassa on condition of anonymity, confirms that the gap between the state’s targets and market reality remains wide: “We are far behind schedule. There are ambitious goals on paper, but implementation is much slower than policymakers anticipated.
The current crisis may well prove a turning point in how Global South countries think about renewable energy, transforming it from a climate ambition into a matter of economic resilience, currency stability, and national security. The case for moving fast has rarely been stronger. The only thing missing, as the sustainability expert makes clear, is the regulatory consistency to match the moment: rules governing the sector have shifted repeatedly in recent years, leaving investors and households alike unable to commit to the long-term solar investments that would make the difference.