This oil war is triggering an avalanche of lithium demand

Sick of petrol prices?

Thinking about buying an EV by any chance?

Now here’s a story getting lost in the fireworks show around the Strait.

Lithium.

It’s a very straightforward story.

And it’s highly investable too.

Iran war → higher oil → faster EV uptake

Across Europe, used EV sales have jumped sharply since the conflict began as drivers look to dodge higher petrol costs.

Dealers’ showrooms are reporting record Saturdays.

Asia is moving as well.

Analysts now talk about the Iran war as a “game‑changer” for EVs in the region.

The boffins at Wood Mackenzie (“Wood Mac” in the industry) just put numbers around this shift.

Its latest modelling shows that if governments respond to this shock by accelerating electrification, road‑transport power demand could be 57% higher than in its previous base case, with EVs taking a dominant share of new sales after 2030.

In a companion note, it estimates roughly 80 million additional passenger EVs could be on the road globally by 2030 because of this conflict‑driven pivot away from oil.

That’s a huge new demand on the materials that go into batteries.

Despite the battery energy storage system (BESS) hype coursing through lithium, the foundational element of lithium demand will remain EVs.

And that foundation just got much stronger.

Lithium is already reacting

You can see that pressure building in lithium:

Source: Trading Economics

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Wood Mac’s 80 million figure is just the start.

And that is before you add the extra demand from data‑centre backup systems, industrial robots and drones — all themes inside my Pax Silica thesis on how the AI build‑out must manifest in immense critical minerals demand.

There’s still time to invest in lithium

Inside Australian Small Cap Investigator, I have been positioning for exactly this set‑up.

We currently hold four ASI lithium stocks in the portfolio. Three are currently a BUY:

Source: Australian Small Cap Investigator

One is up more than 100% from our entry, and the others are building bases with strong leverage to a much tighter market in the months ahead.

The broader market still treats lithium as yesterday’s trade that’s enjoying a dead‑cat bounce off the lows.

It is obsessing over the first‑order effect of the Iran war — the oil spike — and ignoring the second‑order effect, which is an enforced acceleration of the energy transition.

In my view, that is the real opportunity.

Oil shocks come and go.

And yes, private credit, declining global liquidity and an oil price inflation-fuelled recession are risks to the entire market.

But for patient capital, I remain rock-solid convinced that lithium is one of the biggest no-brainer investment themes of the next 2–3 years.

It’s an investment theme that gets stronger every day the Strait remains closed. Forcing fuel consumers to consider the EV alternative.

Layer on the AI demand vector, and this is about as red-hot a macro theme as you can get.

Watch my Pax Silica presentation for more on how the AI buildout and the global race to secure critical minerals chokepoints is creating one of the most powerful investment environments I’ve ever seen in my entire career.