HONG KONG — Shares of Chinese battery producer CATL and automaker BYD surged on their Hong Kong listings in March 2026 as investors positioned the companies to gain from a global energy shock set off by the war in Iran. CATL shares traded in Hong Kong rose approximately 24%, while BYD shares climbed approximately 11% during the month.

The conflict has disrupted oil supplies and exposed the fragility of fossil fuel systems, with the Strait of Hormuz now mostly shut. Most oil and gas transiting the strait was destined for Asian markets, and Asian nations are taking measures to conserve energy and increase reserves. Gasoline prices in the U.S. and Europe are rising sharply.

China is the largest purchaser of Iranian oil and leads the world in battery, solar and electric vehicle exports. The country produces over 70% of the world's electric vehicles and about 85% of global battery cell production, according to the International Energy Agency. China's five-year plan through 2030 prioritizes battery, solar and electric vehicle industries, and Chinese President Xi Jinping merged energy security with national security more than a decade ago.

"China's approach to energy sector development and geopolitics has been completely validated by the Iran conflict," Sam Reynolds, an analyst at the Institute for Energy Economics and Financial Analysis, said. Reynolds also said markets were witnessing a "bifurcation" before the war, with the superpowers pushing very different energy futures.

Prior to late February 2026, China's lead in clean technologies was increasing. Exports of solar panels, batteries and electric cars reached almost $22.3 billion in December 2025, about 47% higher than a year earlier, according to the think tank Ember. Chinese automakers have expanded electric vehicle development and production in recent years, growing exports faster than American or European rivals while offering cheaper models. Chinese automakers have also gained market share in regions like Southeast Asia.

Li Shuo, director of the China Climate Hub at the Asia Society Policy Institute, said: "They are at the very forefront of this, more so than any other countries in the world, certainly more so than the United States."

Under President Donald Trump, the U.S. scaled back on renewable energy and focused on its oil and gas resources to promote energy exports. The U.S. has also promoted liquefied natural gas exports. High U.S. tariffs have largely shut Chinese electric vehicles out of the American market.

"The energy shock is going to help the Chinese industry globally and hurt the American car industry globally," Amy Myers Jaffe, a scholar at New York University's Center for Global Affairs, said. Fitch Ratings expects investment in renewable power and battery storage to increase in nations heavily dependent on energy imports, including European countries. Fossil fuels still dominate China's domestic energy mix.