US-Israel war in Iran threatens China auto exports to key Gulf markets

The US-Israel war in Iran is putting Toyota, Hyundai, and Chinese car brands under pressure in some of the most important auto markets in the Middle East.

A note from Bernstein on Friday says these foreign brands face the biggest risk among non-domestic automakers as the conflict with Iran spreads across trade, shipping, and energy routes.

Right now, Toyota holds about 17% of the relevant market in the Middle East, Hyundai has 10%, and Chery has 5%. Together, that is roughly a third of sales covered in the report.

Inside Iran, local brands Iran Khodro and SAIPA are still ahead, while Chery stands behind them with a 6% share.

The same report says other Chinese automakers also face risk because the Middle East has become a larger outlet for Chinese exports. In 2025, the region took about 17% of China’s passenger vehicle exports.

US-Israel war is squeezing the Strait of Hormuz

The Strait of Hormuz sits between the Persian Gulf, the Gulf of Oman, and the Indian Ocean. It is one of the busiest energy routes in the world. AlixPartners says about 20 million barrels of crude oil pass through it every day.

Bernstein says the same route is also a critical passage for vehicle shipments and parts going into the Middle East. That means the war with Iran is hitting the same lane that keeps Gulf energy trade and auto trade alive.

Eunice Lee of Bernstein wrote in a Wednesday investor note, “Closure of the Strait of Hormuz adds 10-14 days to transit times.” She also wrote, “A prolonged conflict and closure of the strait would hurt sales, increase logistics costs, and delay deliveries.”

The US-led war entered its sixth day on Thursday, and the passage was left almost shut, cutting countries off from about one-fifth of global oil and liquefied natural gas supplies. Oil prices have risen more than 15% since the conflict began.

The increase came as Tehran attacked energy facilities in the Gulf and ships crossing the strait. When oil prices rise, transport costs rise with them. That hits freight bills first, then it spreads into the wider auto business.

Traffic data shows how sharp the slowdown has become. Vortexa says crude tanker transits through the strait fell to just four vessels on March 1, the day after the fighting broke out. Since January, the daily average had been 24.

Vortexa and Kpler also say around 300 oil tankers remain inside the strait. That is a huge backlog in a route that the auto and energy sectors cannot afford to lose.

China presses Iran to let vessels through while automakers track the fallout

At the same time, China is talking with Iran about safe passage for crude oil and Qatari liquefied natural gas vessels through the Strait of Hormuz.

Reuters, citing three diplomatic sources, reported that Beijing wants shipping access protected as the war on Tehran gets worse.

China has friendly ties with Iran, but it is also heavily exposed to this route. The world’s second-largest economy gets about 45% of its oil through the strait.

Ship tracking data showed that a vessel called the Iron Maiden passed through the strait overnight after changing its signaling to “China-owner.” But one crossing does not fix the bigger problem. Markets are still watching for far more sailings before they calm down.

On the auto side, Bernstein says the impact on Japanese automakers “appears limited for now, but close monitoring of developments is still required.” Toyota said in an emailed statement that it does “not conduct business in Iran and does not have any resident employees there.”

The company also said it is “closely monitoring the situation and prioritizing the safety of our local resident employees in the Middle East and related parties.”

For Europe, Bernstein says Stellantis, parent of Chrysler and Jeep, seems to carry the biggest exposure given its broader problems.

Eunice wrote, “The impact of rising gasoline pump prices is already being seen in Stellantis’ 11% stock price slump since its close last Friday,” and added that the company’s push back toward HEMI V8 engines while writing off electrification looked badly timed.

Stellantis said this week that it is “closely monitoring developments across the affected countries” and that it is “not yet possible to fully assess the potential impact on local operations.”