The prolonged disruption around the Strait of Hormuz is accelerating the global shift towards electric vehicles as elevated oil and fuel prices encourage motorists to seek alternatives to conventional petrol-powered cars.
According to Wood Mackenzie, electric vehicles could account for about 25 per cent of the global vehicle fleet by 2040, up from around four per cent currently. Under its more aggressive “electric shock” scenario, adoption could rise by another 50 per cent above the base-case projection if high fuel prices, supportive government policies, technological advances and changing consumer behaviour reinforce one another.
The consultancy said faster EV adoption could have significant implications for the global oil industry, potentially reducing oil demand by about five million barrels per day by 2040 compared with its base case. The resulting decline in road-transport fuel demand could also force about 40 refineries worldwide to close earlier than previously expected.
The latest surge in EV demand follows renewed volatility in global fuel markets linked to the Middle East crisis. The International Energy Agency said global EV sales could reach 23 million units in 2026, representing almost 30 per cent of new car sales. Sales accelerated sharply in the second quarter, rising by 35 per cent from the first quarter as the energy crisis brought fuel-price risks back into focus.
The IEA reported particularly strong growth across several emerging markets, with electric vehicle sales in Brazil, India, Australia and Vietnam roughly doubling between March and June compared with the same period in 2025. Globally, 90 countries recorded annual growth in EV sales during the first half of 2026, indicating that the shift is extending beyond the traditional major EV markets.
BloombergNEF has also projected that electric vehicles will account for about 27 per cent of global car sales in 2026, compared with nine per cent five years ago. The research firm expects electric vehicles to represent more than half of global passenger-vehicle sales by 2035.
Wood Mackenzie said the impact of faster electrification would extend beyond vehicle manufacturers, with major consequences for oil demand, refining and electricity markets. China, already the largest EV market, could see adoption accelerate further if additional incentives and restrictions on petrol consumption reduce the cost advantage of conventional vehicles.
However, the transition faces significant obstacles, including the need for substantial investment in battery-mineral supply chains, charging infrastructure and manufacturing capacity. For the oil industry, the latest development underscores a longer-term risk: prolonged periods of high and volatile fuel prices could encourage consumers to move away from petroleum-powered transport faster, weakening future demand for crude oil and refined products.