Russell: The war fuel crisis in Iran gives electric vehicles a boost for the long term.

The U.S. president Donald Trump is known for his support of fossil fuels. However, the legacy of war against the?Iran will likely be an acceleration in the energy transition. This is especially true in Asia.

Retail fuel prices have risen rapidly since the U.S.-Israeli aerial campaign began on February 28, causing the world's fastest growing region to be hit by the fallout.

In Australia, for example, the cost of a litre (about 1.9 liters) of diesel has reached a record high of A$3, having risen by 36% or so since the start of the war. Meanwhile, in Japan, gasoline prices have jumped 18%.

The countries that control fuel prices are now struggling with the availability of fuel, as the conflict has effectively closed the Strait of Hormuz. This narrow waterway normally transports 20 million barrels of crude oil and refined products per day from the Persian Gulf into primarily Asian countries.

The price of Brent crude oil futures has risen by 42% in Asia since the beginning of the conflict, to $103.78 per barrel on Tuesday. However, the rise in the physical price for refined products like diesel and gasoline is much higher.

Singapore gasoil - the base for diesel - has increased by 104% in price since February 27th, ending at $186.43 per barrel on Monday. Meanwhile, gasoline prices have risen by 91%, reaching a new record high of $150.60.

The sharp rise in prices will likely cause further problems for consumers in Asia over the coming weeks and months. There is also the risk of shortages, as refineries struggle to find crude oil in the region.

Electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs), and electric motorbikes will likely be more popular in Asia due to the price increases and fear of shortages.

Already, EVs and hybrids are making their way into many countries. This is due to the cost-competitiveness and government incentives of Chinese cars.

China has been the leading country in adopting EVs. This is not surprising, given the massive investments the country made in battery?technology in recent years.

Last year, EVs and hybrid electric vehicles (PHEVs) accounted for 12 million sales units in China. This was the first time that EVs accounted for more than half of all new vehicle sales.

The biggest growth opportunity is outside of China, even though this number may reach 60% in the coming year.

AUSTRALIA GROWTH

Australia's EV and PHEV sales reached a record in 2025, and represented about 12.7% total light vehicle purchases.

The PHEVs grew faster as consumers continue to worry about the battery range and the availability of charging stations.

The government's tax incentives and cheaper EVs are helping to boost sales, but it is the question of how much the current fuel crisis will affect consumers and how many people will turn to battery power to protect themselves from future shocks.

Australia has already more than one third of its households using rooftop solar. This is an additional incentive for people to switch to EVs or PHEVs, as they are able to use their own electricity to charge the vehicle, further reducing costs.

Japan could also see a much faster growth of EVs and hybrids. This is because their major automakers are now offering more models.

In several Southeast Asian nations, EVs and hybrid electric vehicles have also seen a strong growth. However, it is worth mentioning that?electric motorcycles are now making a bigger impact.

In India, more than 1.3 million two-wheeled electric vehicles will be sold by 2025. This represents an increase of over 10% from the previous year, and a market share of?more that 6%.

This is a very strong growth rate. However, there are still opportunities for an even faster growth, particularly if fuel prices continue to rise.

The Middle East conflict's impact may last long after its resolution and reopening of Strait of Hormuz.

Asian countries just received a huge incentive to switch from PHEVs to EVs as well as renewable energies such as wind and solar.

Although not a direct comparaison, the European experience after the Dieselgate scandal in 2015 - when Volkswagen was caught manipulating emission tests - can be instructive.

Diesel passenger vehicle sales have dropped from 52% in 2015. to only 8% by 2025. Gasoline-powered vehicles were the main beneficiaries, but more recently, EVs, and PHEVs, have overtaken diesel cars.

It is hard to reverse a trend once it has taken hold. Exporters of crude oil or refined products are at risk of the war changing the minds of consumers and government officials, and reorienting demand and policies towards EVs,PHEVs, and renewable energy generation.

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(source: Reuters)