The conflict between the United States and Iran has entered its sixth week, and the risk in the Hormuz Strait is rising again. Global crude oil transportation still relies mainly on maritime traffic, with a high dependence on key maritime routes such as the Hormuz, Malacca, Bab el-Mandeb straits, and the Suez Canal. Any blockage in these areas could potentially impact the international energy market.
According to the International Energy Agency (IEA), around 80% of the oil and oil products transported through the Hormuz Strait in 2025 flowed to Asia, with China, India, and Japan being the major importers, particularly Japan and South Korea heavily relying on this passage. The U.S. Energy Information Administration (EIA) also stated that any escalation in the Middle East situation leading to a blockade in the Hormuz could raise international oil prices, widen the gap between Brent crude and WTI prices, and drive up diesel and gasoline prices in the United States.
Professor Nissen, an honorary engineering professor at a major U.S. Catholic university, with over 40 years of teaching experience, expressed that this war has made countries more aware that excessive reliance on a single energy source could have direct consequences if a critical passage is blocked. “This war has exposed the vulnerability of our energy sources,” he said.
Nissen pointed out on a program on New Tang Dynasty TV on April 7 that the conflict between the U.S. and Iran will deeply affect the global energy structure, further exacerbating the imbalance of energy resources between the U.S. and China. Here are his main analyses.
Firstly, countries will place more emphasis on strategic oil reserves and energy self-sufficiency. Many nations have realized that their current reserves are insufficient, leading them to bolster their strategic petroleum reserves and reassess their domestic energy production capabilities. Nissen highlighted the difficulties in natural gas transportation, suggesting that oil, coal, and nuclear fuels are easier to store and less susceptible to external disruptions if purchased in advance.
Secondly, there will be a further diversification of energy sources. Countries will increasingly focus on diversified supply sources to reduce reliance on a single region. Nissen underscored that this adjustment is not something that can be achieved in the short term but will require policy changes over several years.
Thirdly, there will be a reevaluation of energy sources beyond fossil fuels, including renewable energy and nuclear power. Nissen emphasized the need for energy policy decisions to be based on reliability, cost, and safety rather than preferences. With evolving circumstances, the importance of nuclear power and coal may rise, while renewable energy, though still developing, may have limited substitution capabilities in the short term.
Additionally, the competition in artificial intelligence (AI) is driving up global electricity demand, prompting countries to rethink their electricity policies. Nissen stated that adjusting electricity supply to accommodate the AI industry has become an urgent issue.
The importance of energy passages and control over resources is expected to increase. The control of straits and energy resources could elevate a country’s geopolitical influence. In this scenario, nations with common needs may engage in more energy cooperation and mutual support in the future.
Furthermore, there is a shifting logic in global energy cooperation. Nissen noted that the supply chain model under globalization is now being disrupted by geopolitical tensions. Energy is no longer just a commodity; it is increasingly becoming a part of countries’ competition and strategic tools.
Nissen pointed out that post the U.S.-Iran conflict, the significance of energy security and supply issues in the U.S.-China competition has escalated further, making the phenomenon of “U.S.-China energy asymmetry” more pronounced.
The so-called “U.S.-China energy asymmetry” refers to the U.S. having stronger autonomous supply and export capabilities in oil, natural gas, coal, and nuclear sectors, while China has a deeper reliance on external energy supplies, import prices, and maritime routes, leading to a widening gap between the two countries in terms of energy security and strategic adjustments.
Nissen highlighted that China currently faces core issues of a fragile energy structure and high import dependence. While the share of electric vehicles in the Chinese market is significant, electricity generation still heavily relies on coal. Hence, even with the increase in electric vehicles, it is challenging to completely break away from reliance on traditional energy sources.
He mentioned that China produces around 4.5 million barrels of oil per day but requires approximately 16 million barrels, leaving a gap of over 11 million barrels that necessitates long-term import reliance. While China used to obtain cheaper oil from Iran, Russia, Venezuela, with the escalation of conflicts, both supply and prices will face more significant pressures.
According to Nissen, to address this vulnerability, China’s main strategies include promoting electric vehicles, replacing oil with coal, increasing strategic oil reserves, and expanding diversified procurement. However, each of these methods has limitations, especially after the increase in electric vehicles, which still needs to address electricity source issues. If coal remains the primary source of electricity generation, pollution and carbon emission pressures will simultaneously increase.
In comparison, the United States has a stronger foundation in oil, natural gas, coal, and nuclear power. Nissen pointed out that the U.S. is already a major oil producer globally, with increasing natural gas exports, substantial coal reserves, and a focus on nuclear energy, providing it with more significant spaces for adjustments in overall energy competition.
He noted that this imbalance in energy competition between the U.S. and China is becoming more pronounced: China is relatively fragile, while the U.S. has stronger leading capabilities. As energy supply, prices, and geopolitical risks continue to interweave, this gap may further widen.