Research
August 10, 2026
The electrostate-petrostate dichotomy is greatly exaggerated. China’s continuing reliance on fossil fuels, especially coal, has been its most important buffer against the energy shock coming out of the Strait of Hormuz.
The Hormuz shock significantly increased demand both for oil and gas as well as for the clean energy technologies that can displace them. The United States has responded by increasing its contributions to global fossil fuel supply, while China is providing the technology that can eventually supplant those fuels.
Without bold policy action, the United States is positioned to benefit only from the immediate scramble for fossil fuels, while China is positioned to benefit from both the crisis and the gradual shift to clean energy.
