The Lithium Wars
China’s tepid response to Iran’s Strait of Hormuz closure has more to do with the shift to clean energy.
Following the U.S. and Israel’s strikes against Iran’s nuclear facilities, which Beijing condemned as a violation of Iran’s sovereignty, many expected China to throw its full weight behind Tehran. Yet, China’s tone has shifted to measured restraint. Chinese Foreign Minister Wang Yi did label Israel’s actions as “unacceptable” during a call with his Israeli counterpart but stopped short of a full condemnation. Instead, Beijing has focused its messaging on the need for dialogue, de-escalation, and a ceasefire.
China purchases an estimated 90% of Iran’s oil exports, making it Tehran’s biggest energy customer. A closure of the Strait of Hormuz—a key shipping route for nearly one-third of global oil trade—could have sweeping consequences for China's fuel prices, manufacturing sector, and broader economy. But maybe that’s what China wants? While still reliant on coal, China is rapidly expanding into renewable energy. Solar power is expected to overtake coal as the country’s leading energy source by 2026. Today, renewables account for around 31% of China's electricity generation.
China’s green ambitions aren’t limited to its own borders. Through its Belt and Road Initiative (BRI), Beijing is investing heavily in clean energy infrastructure across developing countries. “China wants to supply green energy goods for the world,” says Samantha Gross, director of the Energy Security and Climate Initiative at the Brookings Institution. “The push to subsidize and nurture its green energy sector wasn’t just domestic — it’s part of a global strategy.”
A twist in Iran’s partnership with China: lithium.
Despite years of sanctions, Iran has begun laying the groundwork for a green transition. It aims to generate 10% of its electricity from renewables within five years, and is ramping up solar, wind, nuclear, and geothermal capacity. With a development target of 5,000 MW of new renewable energy capacity and a projected $60 billion in green investment.
In 2023, Iran announced the discovery of a massive lithium deposit in the western province of Hamedan. This would rank as the second-largest known lithium reserve in the world. Lithium, often called “white gold,” is essential to the production of electric vehicle batteries—a sector where China dominates.
China, already the world’s largest lithium processor, is now positioned to partner with their closest ally, Iran, in developing this new industry. Iran, in turn, stands to benefit from Chinese capital, technology, and infrastructure support as it works to overcome domestic challenges, from outdated power grids to limited technical expertise in renewables. For Beijing, a lithium-rich Iran could help diversify its critical mineral supply chain.
Does Iran want the war?
It’s surprising to see Tehran letting #MIGA—Make Iran Great Again—slip through its usually tight internet restrictions. This seems less like a crack in the firewall and more like a calculated move.
So, is the Iran–Israel conflict a smokescreen for a broader shift from fossil fuels toward green energy and critical minerals? Oil may still fuel today’s economy, but lithium and renewable minerals are shaping the future.
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-DeAnna Calderón