IEA Sees EV Sales Nearing 30% of Global Car Purchases as Hormuz Shock Reshapes Demand
Sustained fuel price spikes from the Strait of Hormuz crisis are pushing electric vehicle adoption far ahead of prior forecasts, with WoodMac projecting 40 refinery closures by 2040.
Global electric vehicle sales are on course to reach nearly 30% of all new car purchases this year, the IEA said in its annual EV report, as the sustained fuel price shock from the Strait of Hormuz conflict reshapes buyer behavior across major markets. ICE Brent crude front-month stood at $103.37 per barrel as of September 19's last recorded session, still well above pre-conflict levels, with RBOB gasoline front-month at $3.51 per gallon — down 0.57% as of September 18's close but elevated enough to keep the economics of switching to electric compelling for consumers weighing a long-horizon vehicle purchase.5
WoodMac analysts, responding to the fuel price surge, have revised their base case to show EVs climbing from 4% of the global passenger fleet — as of August 20, 2026 — to 25% by 2040. Under their more aggressive "Electric Shock" scenario, designed around a sustained high-price environment, global oil demand could fall to around 99 million barrels per day by 2040, roughly 5 million bpd below the base case. That gap would represent a structural demand hole that OPEC+ producers have no straightforward way to refill.5
The Hormuz crisis supplied the catalyst. The strait previously handled nearly 20% of global oil supply, about one-quarter of worldwide seaborne oil trade, and roughly one-fifth of global LNG trade, moving 18.2 million barrels per day of crude and refined products in 2025, according to OGJ data. When transit volumes collapsed, the EIA estimated Middle East crude production shut-ins averaging 10.5 million bpd in April, rising toward 10.8 million bpd in May. The IEA put the total global supply loss since the outbreak at 12.8 million bpd, with an additional 1.8 million bpd falling month over month in the spring.2
Asia absorbed most of the impact. Asian economies accounted for nearly 80% of Hormuz oil flows, with China alone importing close to 5 million bpd through the strait, while India, Japan, and South Korea each moved roughly 2 million bpd that way. By July 14, 2026, S&P Global Commodities at Sea counted 73 vessels crossing Hormuz over a three-day span — fewer than 25 per day on average — underscoring how far transit volumes had fallen from normal levels.3,2
China's policy response amplified the EV shift. WoodMac flagged additional Chinese policy measures including new restrictions on gasoline consumption and full purchase tax exemptions for electric vehicles as likely accelerants in the shock scenario. Beijing was already the global EV sales leader before the conflict; the combination of state support and fuel price pressure has made the economics of staying with an internal combustion engine increasingly hard to justify for Chinese consumers.5
The demand destruction implied by these numbers would ripple into refinery economics. WoodMac projects decelerating road transportation fuel demand could lead to the early closure of around 40 oil refineries worldwide. Refiners in Asia, already operating under severe margin pressure from the supply shock, face the longer-run problem that their primary product may see structurally lower demand even after the Hormuz situation eventually normalizes.5
WTI crude front-month stood at $99.53 per barrel as of September 19's last recorded session. On May 28, 2026, traders briefly pushed ICE Brent crude front-month below $95 and WTI to $88.68 on hopes of US-Iran diplomatic progress, Gulf News reported — a reminder of how quickly prices can move on ceasefire signals. But energy analysts, as reported by Gulf News, cautioned that optimism over diplomatic progress needed to be weighed against depleted inventories, damaged infrastructure, and a geopolitical environment that remained deeply uncertain.1
The Atlantic Council noted on July 9, 2026 that the US launched airstrikes on Iran on July 7 after several Iranian attacks on vessels in the Strait of Hormuz, and suspended a Treasury Department license authorizing Iranian oil sales for sixty days. That sequence — repeated provocations, military responses, and sanctions tightening — has extended well beyond a typical short-cycle disruption, giving households and fleet buyers a sustained price signal long enough to inform a vehicle purchase decision.4
OPEC+ production fell by 1.9 million bpd from March to 40.1 million bpd in April, leaving output 11.9 million bpd below pre-war levels according to OGJ data, with OPEC output at its lowest level in decades. Production capacity exists to recover once the security situation permits. What is harder to reverse is a cohort of consumers who have already switched vehicles. If WoodMac's revised base case proves conservative, the 40 refinery closures projected may be an undercount — and the pace at which EV sales stabilize once fuel prices eventually ease will be the number that matters most to refiners still holding long-dated capacity.2,5