How the conflict in Iran is reshaping how the world sources its oil

Summary

Oil exports from North America are surging amid the conflict in Iran, hitting record highs in the United States as countries that usually rely on barrels currently blockaded in a crucial shipping channel scramble to find alternate supplies. The blockage of the Strait of Hormuz since the war began on Feb. 28 has forced a virtual halt to oil and gas exports from producers in the Persian Gulf, choking off around 20 per cent of the world’s supply. Instead of sailing to customers largely in the Asia-Pacific region, tankers that once traversed the globe remain stuck, their cargo stranded, with no end to the impasse in sight. While the major supply shock has driven down oil demand – it dropped 10 per cent in March, according to the International Energy Agency – the 97 million barrels being used each day have to come from somewhere, and North America is pumping out as much as it can. The U.S. became a net exporter of crude oil for the first time since 1944 last week. Its exports have almost doubled since late March, hitting 6.4 million barrels for the week that ended April 24, according to the country’s Energy Information Administration, marking the highest weekly level on record. John Rapley: Will Canada choose oil and bondage to the U.S., or forge our own destiny? Here in Canada, exports out of Vancouver increased by 60 per cent in April compared with February, said Rothit Rathod, senior oil market analyst with shipping data firm Vortexa. Tanker traffic from the U.S. Gulf Coast has picked up significantly, but the most notable change has been the shift in destination patterns, he said. In February, 54 per cent of crude exports from the region went to Europe, 30 per cent to Asia and the remainder to other destinations in the Americas and Africa. By April, half went to Asia while Europe’s share dropped to 40 per cent. The destination of oil from Vancouver remained largely unchanged; the lion’s share went to Asia (80 per cent in April, compared with 76 per cent in February) and the rest to the U.S. West Coast. “What is different in April, however, is that we have incremental cargoes going to South Korea and Singapore, in addition to China,” he said. Opinion: We must reopen the Strait of Hormuz. But here’s how we ensure it never closes again Oil prices, meanwhile, continue their wild swings. On Thursday, Brent crude, the international benchmark, soared to a wartime record of US$126 a barrel before a hard price reversal in late morning trading. Crude grades from the Middle East, North Atlantic and West Africa are priced “at very strong premiums in the market right now,” whereas North American benchmark West Texas Intermediate crude is at a comparative discount, said Susan Bell, senior vice-president of oil markets with Rystad Energy. At noon Friday, a barrel of Brent was US$114, WTI was US$102 and Western Canadian Select was just under US$82. Irving Oil’s refinery in Saint John is a prime example of a potential future shift in crude flows. Prewar, Irving sourced most of its feedstock from the U.S., Nigeria, Egypt and Saudi Arabia – a cheaper prospect than Western Canadian oil, because there is no pipeline across the country. But total imports to the refinery dropped 16 per cent month-over-month in April, according to a Vortexa analysis. In past crises, refiners in Eastern Canada have tried a circuitous route for securing domestic supplies. At the start of the COVID-19 pandemic in 2020, for instance, Irving bought a tanker of crude from Cenovus Energy Inc. that was loaded at Burnaby, B.C., the terminus of the Trans Mountain pipeline. The ship travelled south, then transited the Panama Canal before heading north along the U.S. Eastern Seaboard, noted Peter Tertzakian, Calgary-based founder of Studio.Energy. A similar route had previously been plied at the time of the first oil price shock in 1973. Saudi Arabia is exporting roughly five million barrels a day out of the Red Sea, said Ms. Bell with Rystad. And Vortexa reckons Irving will continue to get crude from the Gulf state, albeit at a reduced pace from before the war. But Irving isn’t counting on it. John Rapley: When an oil shock is renewable energy’s best friend On March 13, the company applied to the Canadian Transportation Agency for approval to use a foreign tanker to bring Canadian oil from the Whiffen Head terminal in Newfoundland to its Saint John refinery. (Under Canada’s maritime laws, coastal trade is reserved for Canadian-registered vessels unless there are no suitable and/or available ships.) Amid the most significant energy supply disruption in recent history, using foreign oil tankers to access Canadian crude is essential for the energy security of Atlantic Canada, Irving wrote in its application. Doing so would also ensure a reliable and diversified supply chain and reinforce the connection between Canadian producers and the Saint John refinery, it said. The company added that it was already in discussions “with Newfoundland Canadian crude producers for the prompt acquisition of Hebron crude oil,” but agreements would rely on certainty of access to large ships. Irving spokesperson April Cunningham did not comment directly on the company’s bid to secure oil from fields off the coast of Newfoundland, saying only that the company relies on a network of diverse, reliable and quality suppliers from around the world to remain flexible. Vortexa said it had not seen any Whiffen Head crude traffic headed to Saint John as of April 30. While the refinery is still using U.S. oil, grades from elsewhere “are getting very, very expensive for Irving to buy, so they would benefit by buying the Canadian grades,” Ms. Bell said. The Editorial Board: The Liberals pander at the gas pump Charlene Johnson, chief executive of industry association Energy NL, said Irving’s application could boost offshore oil production and help secure Canadian crude supplies. Mr. Tertzakian with Studio.Energy said the global energy crisis could finally spark some kind of permanent energy security solution in Canada. “I think we need it. It’s just like insurance – you don’t know you need it until something happens,” he said. Canada’s federal government has pushed hard to diversify export markets away from the U.S. of late. That’s partly in response to President Donald Trump’s trade war, but in the case of energy, producers can also fetch a higher price for their oil by shipping it to markets such as Asia. Securing a higher price could become more important in the wake of the United Arab Emirates’ exit from the Organization of the Petroleum Export Countries on May 1. The UAE is the world’s seventh-largest oil producer, and the third-largest within OPEC. In all, it accounts for 14 per cent of the oil cartel’s output. Its move to bail on OPEC after nearly 60 years of membership reflects years of tension between Abu Dhabi’s ambition to expand production and the constraints of OPEC’s collective quota management. Eric Reguly: The UAE’s exit marks a blow to OPEC’s power. What’s the future of the oil cartel? The UAE’s exit won’t have a significant impact on the fundamentals of the energy market this year – even if the Strait of Hormuz reopens, Simon Flowers, Wood Mackenzie’s chairman and chief analyst, said in a statement. But beyond 2026, losing the UAE is expected to reduce OPEC’s ability to protect prices by applying quotas to production. The oil sector in the Gulf state will now operate according to the country’s economic goals, Ms. Bell said. That likely means more barrels, “and potentially substantially more, because they had a lot of spare capacity.” For Canadian producers, that potentially means “lower prices, lower netbacks, more challenging economics,” she said.

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Emma Graney; Jeffrey JonesBy Emma Graney; Jeffrey Jones

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High oil prices drive a surge in Chinese electric vehicle sales, but charging networks lag behind

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High oil prices drive a surge in Chinese electric vehicle sales, but charging networks lag behind The war in Iran has helped reshape the global electric vehicle market, giving Chinese automakers an opening across the developing world as fuel prices surge The war in Iran has helped reshape the global electric vehicle market, giving Chinese automakers an opening across the developing world as soaring fuel prices push drivers towards electric vehicles, even as charging infrastructure lags behind a wave of imports.

The blockade of the Strait of Hormuz disrupted shipping of about a fifth of the world’s crude oil and liquified natural gas, first hitting Asia — the main destination for the fuels — followed by Africa. This shock accelerated a trend that was already spreading across the developing world.

In April, global exports of Chinese EVs hit a record $9.4 billion, according to an analysis by think tank Ember of Chinese customs data. Shipments surged to countries such as Australia, Brazil and regions like Southeast Asia and East Africa. China exported about 435,000 passenger EVs and plug-in hybrids in May, more than double from a year earlier, according to the Chinese Association of Automobile Manufacturers.

As fuel costs rise, more drivers are switching to EVs to save money, while governments from Laos to Ethiopia are embracing electrification to curb oil imports and reduce costs of fuel subsidies. But faster EV adoption is outpacing the expansion of charging networks.

Governments and state-owned utilities in Africa are taking a leading role in building them — a model analysts say could help other emerging markets, like Asia, speed the shift away from fossil fuels. When a nation lacks sufficient charging infrastructure and EV fleet size, it is a “classic chicken-and-egg problem” regarding what comes first, said Paul Gong, head of UBS bank’s China automotive industry research.

“At that stage, government support for infrastructure could help accelerate adoption,” he said. Fuel shock drives EV use in Asia and Africa Across the developing world, drivers are looking beyond the gas pump. In Southeast Asia, imports of Chinese EVs have surged in Thailand, Laos and the Philippines.

In May, Laos banned the import of fuel-powered vehicles for the rest of 2026 to cut oil import costs and encourage the EV shift. Africa imported around 44,000 Chinese EVs in 2025, a 130% jump from the year before, according to Chinese Commerce Ministry data.

Across Asia and Africa, transport is one of the largest household expenses. Limited public transit, long commutes and a reliance on private vehicles make families vulnerable to volatile fuel prices. In South Africa, transportation accounts for nearly a fifth of household spending, according to a 2024 study by Stellenbosch University in South Africa's Western Cape province.

So, as fuel prices surge, global interest in EVs has been growing, said Mark Wakefield, with the consultancy AlixPartners. One in four new cars sold worldwide last year were electric, according to the International Energy Agency. Global electric car sales are expected to grow further in 2026 and reach 23 million, making up nearly 30% of all cars sold worldwide, according to the IEA’s latest EV outlook.

“In the next five years, we will accelerate (our) overseas expansion,” said Jerry Gan, CEO of Geely Auto, one of China's biggest automakers, at a company event in March as the auto group makes inroad into regions like Southeast Asia including selling EVs.

Chinese automakers supplied around 60% of electric cars sold globally, the IEA said. They have also been targeting Europe, Africa and Latin America. In Vietnam, automaker VinFast also logged stronger sales. Demand from Southeast Asia helped drive a 42% year-on-year increase in the company's January-March quarterly revenue.

On most mornings, Nguyen Thien Bao threads his VinFast electric motorbike through the jammed traffic of Vietnam’s capital Hanoi — ferrying passengers and deliveries. The EV bike has sharply cut his expenses as fuel prices rise. “Before, so much of my income went into fuel,” he said.

“Now, I can actually save some money.” Charging stations aren't keeping up But while EV imports are booming, charging infrastructure is still lagging even as installations have accelerated. Thailand, for instance, has around 4,600 public charging locations to serve more than 424,000 battery EVs and plug-in hybrids, according to the Electric Vehicle Association of Thailand — around one for every 92 vehicles.

The country currently has roughly 12,000 public chargers, the IEA said. Chitsanupong Nuamnorm's solution is to keep his gasoline-fueled Mazda 2 for weekend trips, although the Chinese-made MG4 EV he bought on Feb. 27 — the day before the Iran war began — is saving him a lot of money.

Yutthana Samranwong, a 54-year-old driver in Thailand’s northern Phitsanulok province, says booking online for public charging ports to keep his MG4 EV running is a gamble. “It's a bit of a headache,” said Samranwong, who sometimes works with the Grab ride-hailing and delivery service.

In Bangkok, strained charging networks are prompting some drivers to consider returning to fuel-powered cars. In Malaysia, public fast chargers were up more than 70% in 2025, according to the IEA, after the government rolled out incentives to including a tax break for operators of charging points that meet certain investment criteria.

Indonesia has more than 4,500 public charging stations set up the state-owned power utility PLN, the IEA said. Ethiopia, which has banned non-EV imports, had only around a dozen charging stations as of mid-2025, and the government estimates it needs more than 1,170 stations to meet rising demand.

In the capital Addis Ababa, 40 stations are under construction, according to the state electricity utility. “In developing markets, affordability can accelerate the shift, but the pace of adoption will still depend heavily on infrastructure, power reliability and use case,” said Chris Liu, with the technology research and advisory group Omdia.

State utilities take the wheel to build charging stations In Indonesia, more than 4,500 public chargers have been deployed by its state-owned power utility PLN, the IEA said. African countries also are increasingly turning to state-owned utilities to build EV charging networks, betting public investment can solve one of the biggest obstacles to electric vehicle adoption.

“Utilities are recognizing that electric mobility will become a meaningful source of future electricity demand,” said Ndia Magadagela, co-founder and CEO of Everlectric, a South African commercial EV leasing company. There are around 2,000 public EV charging stations in Africa, with South Africa accounting for the largest share.

State-controlled utility Kenya Power plans to build 44 charging stations within the next year. But building networks of charging stations is difficult in developing markets, according to Omidia's Liu, who said grid connections and maintenance are key issues.

While BYD, for example, is expanding its ultrafast EV charging network in places like Europe, large Chinese automakers typically may have relatively little incentive to build networks outside China, he said. State-owned utilities, therefore, can play a larger role in this, according to Liu, since they are closely tied to a country’s grid planning, electricity pricing and distribution capacity.

“You need charging infrastructure to support an even larger fleet size,” said Gong, the auto analyst from UBS. ___ Olingo reported from Nairobi, Kenya, and Delgado reported from Bangkok. Associated Press writer Aniruddha Ghosal contributed to this report.

___ The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. The AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.

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