{"id":530625,"date":"2026-03-18T10:48:29","date_gmt":"2026-03-18T10:48:29","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/530625\/"},"modified":"2026-03-18T10:48:29","modified_gmt":"2026-03-18T10:48:29","slug":"oils-monopoly-kaput-china-to-be-top-supplier-of-energy-security","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/530625\/","title":{"rendered":"Oil\u2019s monopoly kaput, China to be top supplier of energy security"},"content":{"rendered":"

So, baby, can\u2019t you see<\/p>\n

I\u2019ve got to break free<\/p>\n

I\u2019ve got to break free<\/p>\n

I want to break free, yeah<\/p>\n

\u2013 Queen<\/p>\n

The world cannot possibly absorb more exports from China, screamed the pundits.<\/p>\n

After the US and Israel ignited the Middle East powder keg? Oh yes it can! And oh yes it will!<\/p>\n

Now more than ever, the world \u2013 especially the Global South \u2013 will buy everything China has to sell.<\/p>\n

China set off alarm bells after its 2025 trade surplus grew 20% year-on-year to $1.2 trillion, in defiance of Trump tariffs. China\u2019s 2025 exports increased 5.4% while its already low imports fell marginally. The 20% collapse in exports to the US was more than offset by growth everywhere else \u2013 particularly Global South countries with exports to ASEAN and Africa surging 13% and 26%, respectively.<\/p>\n

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Concerns were compounded by January and February 2026 data showing that China\u2019s exports increased 22% in dollar terms (19% in Rmb terms). Exports to the EU, ASEAN and Africa rocketed 25%, 27% and 47%, respectively.<\/p>\n

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Handwringing over the world\u2019s ability to absorb China\u2019s output is now irrelevant. The war in the Middle East marks the end of the oil age. With the Strait of Hormuz closed and Gulf States under attack, every petroleum importing country will do whatever it takes to remove oil from its energy stack \u2013 even if Iran folds and opens the strait tomorrow. Confidence has been shattered. The damage has been done.<\/p>\n

China \u2013 the world\u2019s dominant producer of EVs, batteries, solar panels, wind turbines, nuclear reactors, electric motors, ultra-high voltage power lines etc. \u2013 will quickly replace oil exporting countries as the world\u2019s most important supplier of energy security.<\/p>\n

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For most of our careers grey haired energy analysts have lived by the mantra, \u201cTransportation is transportation and electricity is electricity\u2026 and never the twain shall meet.\u201d We\u2019ve carried in our heads two energy models \u2013 one for motor vehicles and one for electricity.<\/p>\n

Oil had a monopoly on transportation \u2013 gasoline for cars, diesel for trucks, kerosene for jet fuel and bunker for shipping. Nothing had a monopoly on electricity, which is generated promiscuously \u2013 coal, nuclear, hydro, natural gas, solar, wind, geothermal, biofuels and, yes, even oil. Anything that burns. Anything that flows. You can split atoms. You can even catch the sun.<\/p>\n

Young energy analysts have no clue what we old timers are droning on about. China\u2019s advances in battery technology \u2013 energy density, cost and charging times \u2013 have broken oil\u2019s monopoly on transportation.<\/p>\n

All pain points of electric vehicle ownership have been removed. Battery prices have plummeted 90% in the past 15 years. BYD\u2019s newest models have 1,000 km ranges with 5-10 min charging times. NIO has battery swapping stations all over China. And to top it off, EVs with over 500 horsepower \u2013 exotic sports car league a decade ago \u2013 are now common in mid-market sedans and SUVs. \u00a0<\/p>\n

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Similarly, solar panel costs have fallen 85% in the past 15 years as China\u2019s solar companies increased photovoltaic efficiency and, more importantly, automated and massively scaled production.<\/p>\n

Largely because of solar, China\u2019s CO2 emissions peaked a couple years ago, well ahead of its 2030 target. China is on track to becoming carbon neutral in 2040, 20 years ahead of its 2060 target (see here<\/a>).<\/p>\n

About 45% of the world\u2019s oil (48 mmbbl\/d) is refined into gasoline for passenger vehicles. Another ~30% (32 mmbbl\/d) becomes diesel for trucking. All of these barrels will come under intense market assault by China\u2019s advances in batteries, electric vehicles and solar power (with assists from wind, nuclear, hydro and power transmission). Global initiatives to diversify transportation away from oil intensify the urgency.<\/p>\n

EVs have already captured over 50% of China\u2019s new car sales. China\u2019s EV production has increased over 10x in the past 5 years and ~50x in the past 10 years. Adoption has been lower in other markets as their governments lacked urgency. Nonetheless, China\u2019s EV exports have increased 15x in the past 5 years to 343,000 units in 2025. Growth will surely accelerate as the US, Israel and Iran demonstrate how easily the oil market can be wrecked.<\/p>\n

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An electric vehicles is 3-4x more energy efficient than an internal combustion engine (ICE) car, a Rube Goldberg contraption that suffers from waste heat, friction and idling losses.<\/p>\n

China\u2019s manufacturing costs have cut the price of EVs to half that of \u201cequivalent\u201d ICE cars sold in the US and Europe.<\/p>\n

With oil prices threatening to double from $75 per barrel prewar, the math does itself.<\/p>\n

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Oil importing countries will now invest heavily to further break oil\u2019s monopoly on transportation.<\/p>\n

With China\u2019s EV\/battery technology, manufacturing costs and endless model variety, EV adoption no longer comes with penalties, but in fact imbed all kinds of benefits \u2013 from lower purchase prices to lower cost of operations to far better acceleration to whizzbang software wizardry. China has also been aggressively pushing EVs into trucking \u2013 both short and long haul.<\/p>\n

No longer tied to oil, transportation can promiscuously source energy. Anything that burns. Anything that flows. You can split atoms. But if you really do the math, the cheapest, fastest and most scalable energy source today is solar.<\/p>\n

Al of this will accelerate China\u2019s reversal of the Lucas Paradox \u2013 a decades-long economic aberration in which capital flowed from poor country to rich \u2013 as developed economies ran trade deficits and developing economies tightened belts to lend to rich customers.\u00a0\u00a0<\/p>\n

This violation of classical economic physics \u2013 where capital is supposed to flow from rich to poor \u2013 is being corrected as China has now not only become rich, but the richest economy there ever was. Correctly measured, China\u2019s manufacturing output is larger than that of the US, EU, India, Japan, UK and Russia combined (see here<\/a> and here)<\/a>.\u00a0<\/p>\n

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The Lucas Paradox was a hangover of history. In the past few centuries, the world\u2019s choicest assets \u2013 the North American landmass (throwing in Australia and New Zealand) \u2013 through whatever methods, landed in the laps of the Anglo Empire (first the British, then the Americans).<\/p>\n

At the same time, China, historically the world\u2019s most productive civilization (see here<\/a>), suffered an embarrassing century long face plant.<\/p>\n

The correction of this historical anomaly over the past 40 years has once again turned China into a massive surplus-generating economy whose electric vehicles, batteries, 5G equipment, solar panels, engineering\/construction companies and sundry manufactures spill forth into the world like all the silks, porcelains and teas did centuries ago.<\/p>\n

While China had been exchanging its surplus goods for the surplus assets of the Anglo Empire, its trade partners are now highly diversified with over half of exports to Belt and Road Initiative countries, largely composed of Global South economies. Belt and Road is nothing less than a modern revival of China\u2019s ancient tributary system, minus degrading relics like kowtowing.<\/p>\n

While America\u2019s \u201crules-based international order\u201d hoovers up goods and capital from all over the world, China\u2019s \u201cshared future for mankind,\u201d in contrast, disgorges goods and capital to all corners of the world. 2025 was a banner year for Belt and Road with $210 billion of engagements \u2013 nearly twice previous highs.<\/p>\n

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The world is now at a crossroads. The US Empire is once again fighting a war of questionable judgement. This war has exposed oil \u2013 once the spice m\u00e9lange of the world economy \u2013 to be insecure and unreliable, subject to the whims of tin-pot dictators, ruthless religious states and insane clown presidents.<\/p>\n

While a short- or medium-term solution will likely emerge for Hormuz, oil as a commodity is over in the long term. Technology, scale and automation are poised to make China the world\u2019s largest exporter of energy with its EV, battery and solar stack. And the Global South stands to benefit the most as China offers an alternative to oil dependence \u2013 a century old obstacle to development and industrialization.<\/p>\n","protected":false},"excerpt":{"rendered":"So, baby, can\u2019t you see I\u2019ve got to break free I\u2019ve got to break free I want to…\n","protected":false},"author":2,"featured_media":530626,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[46121,238544,24167,28,1872,22540,236558,228242,1870],"class_list":["post-530625","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-batteries","tag-belt-and-road","tag-block-3","tag-business","tag-energy","tag-evs","tag-hormuz","tag-iran-war","tag-solar-energy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/530625","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=530625"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/530625\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/530626"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=530625"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=530625"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=530625"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}