EVs displaced twice the expected oil in China, IEA says

The U.S.-led war in Iran, now approaching its sixth month, is reshaping the global auto market as energy supply disruptions and soaring fuel prices push consumers toward electric vehicles at a pace that has surprised even optimists.

China's Oil Displacement Doubles Expectations

Electric vehicles displaced 1.5 million barrels of oil per day in China during the second quarter of 2026, nearly doubling expectations, according to the International Energy Agency's latest oil market report. The acceleration is tied directly to the near-total closure of the Strait of Hormuz, through which the bulk of China's oil supply passes.eenews

The IEA projects Chinese oil demand will fall 4 percent — or 280,000 barrels per day — between 2025 and 2027, a structural decline the agency compared to the lasting shifts triggered by the Covid-19 pandemic. "Large crisis-driven shifts can be slow to fade, leaving persistent impacts on oil demand and we expect that much of the lost ground will not be recovered," the IEA report states.eenews

Global EV Share Approaches 30 Percent

The broader picture is equally striking. The IEA's Global EV Outlook 2026, published in May, projected that global electric car sales would reach approximately 23 million units this year, representing close to 30 percent of all new cars sold worldwide. That figure encompasses both battery-electric and plug-in hybrid vehicles.facebook+1

Reuters Thomson Reuters Corporation ↘ 2.32% highlighted the connection between the conflict and EV uptake in its Friday roundup, noting an analysis examining "how the war in Iran is accelerating the uptake of electric vehicles around the world". CNBC Comcast Corporation ↗ 0.00% reported in April that analysts expected the fallout from the Iran war to spur EV demand, though the shift away from internal combustion engines would be gradual.reuters+1

Cost Gap Widens in the United States

Consumer interest is also climbing in the U.S., where the economics of EV ownership have become harder to ignore amid elevated fuel prices. According to CNET, charging an EV costs roughly $73 per month compared to $188 for a gasoline vehicle — annual savings of approximately $1,380. Other estimates put the gap even wider, with home-charged EVs costing as little as 3 to 4 cents per mile versus 12 to 15 cents for gasoline cars.cnet+1

Wood Mackenzie identified three factors that could further elevate EV sales: enhanced government investment in the EV supply chain, sustained high fuel prices, and faster-than-expected battery technology improvements. Under what the consultancy calls an "electric shock" scenario, these forces could reduce global oil demand further and reshape competition among the U.S., Europe, and China iShares MSCI China ETF ↗ 0.39% — which continues to dominate EV manufacturing and sales.finance.yahoo

The IEA cautioned that mineral supply constraints and charging infrastructure gaps remain obstacles to the pace of adoption accelerating further.eenews+1