Industry Weighs Impact of Mideast Conflict on Local Solar Imports, Manufacturing
The overall impact from the Iran conflict on solar manufacturing projects in the Middle East is likely to be limited, given that most of these projects are at an early stage of development, according to market participants. However, prolonged logistical disruptions could lead to delays in solar products exported to the region and trigger price fluctuations.
The Middle East is not only a key destination for China’s solar module exports, it has also emerged in recent years as a new hotspot for photovoltaic manufacturing investment.
China’s Downstream Exports to Middle East Face Short-Term Uncertainty
Industry sources have noted that the recent clashes has so far had limited trading impact on Chinese downstream modules and cells, as market participants continue to monitor developments closely. One market source noted that the crisis is still in its early stages, while its longer-term implications for the solar industry have yet to become fully apparent.
According to global think tank Ember, China’s solar shipments to the Middle East in 2025 consisted mainly of cells and modules, totaling 1.24 gigawatts and 25.9GW, respectively, while wafer shipments were low at 10MW.
Trade sources said the recent events have so far had a significant short-term impact on container shipping, which is the primary mode of transport for solar products to the region. “We have heard that several shipping lines to the Middle East have been suspended, alongside rising freight rates due to the regional tensions, making the situation quite tough at the moment,” a Chinese module manufacturer source said.
MSC Mediterranean Shipping Company has suspended bookings for worldwide cargo to the Middle East region until further notice, stating it will continue to monitor the situation and work with authorities to resume operations once the security situation improves.
Separately, CMA CGM announced that effective March 2, it would impose an Emergency Conflict Surcharge of $2,000 per 20-foot dry container and $3,000 per 40-foot dry container for shipments to or from Iraq, Bahrain, Kuwait, Yemen, Qatar, Oman, United Arab Emirates, Saudi Arabia, Jordan, Egypt’s Port of Ain Sokhna, Djibouti, Sudan and Eritrea.
Several sources expressed concern that the conflict could pose risks to orders scheduled for delivery this year. A Chinese downstream manufacturer said shipments planned for near-term delivery to the Middle East face heightened uncertainty, prompting the company to increase communication with regional customers to discuss contingency plans.
The most immediate solar exposure remains delivery execution, noting that reroutes, booking restrictions and conflict-related surcharges could increase the risk of shipment delays for near-term cargoes, according to trade sources.
War-risk insurance terms have tightened for Gulf-adjacent voyages as underwriters review cover, adding another potential insurance cost for near-term shipment logistics into the region if the conflict persists, trade sources said.
Marine insurers have issued notices cancelling war-risk coverage for vessels operating in the Persian Gulf, with the exclusions scheduled to take effect in early March. However, insurers noted that shipowners may reinstate coverage through buyback facilities, subject to higher premiums and capped liability limits.
In terms of pricing, industry participants said there has been no immediate impact on module prices, as buyers in the Middle East typically sign contracts one to two years ahead of delivery.
The longer-dated nature of these contracts means forward market pricing discussions have remained largely insulated from recent spot market volatility, with buyers able to delay procurement decisions until shipping conditions stabilize.
OPIS assessed the FOB China forward curve price for the first quarter of 2027 loading at $0.126 per watt peak as of April 24, with indications ranging between $0.120/wp and $0.135/wp.
Potential Implications for Local Solar Manufacturing and Investment
According to industry sources and publicly available company disclosures, since 2023 at least 15 photovoltaic manufacturing projects have been implemented or announced across the Middle East. These projects span the full value chain–including polysilicon, wafers, cells and modules–and are located in countries such as the United Arab Emirates, Saudi Arabia, Oman and Egypt.
Several of these projects have already entered construction or commenced operations. United Solar’s 100,000 metric tons per year polysilicon facility in Oman began operations last month. Elite Solar’s 2 GW solar cell and 3 GW module project in Egypt has been operational since January. Atum Solar broke ground in December 2025 on its planned 2 GW solar cell and 2 GW module manufacturing project in Egypt, with completion targeted for 2027. Meanwhile, JA Solar’s 6 GW solar cell and 3 GW module projects in Oman are nearing key construction milestones and are expected to begin operations in the first quarter of this year.
An industry insider familiar with one recently commissioned polysilicon project in the region said the facility had planned to enter a critical phase in March involving trial order deliveries and customer feedback collection, which would inform subsequent production adjustments and price negotiations. That timeline is now expected to be affected by logistics constraints.
“Since production has only recently commenced and customers are still in the trial stage, we have not yet become a stable supplier. Any logistics delays at this point are unlikely to affect customers’ production, and trial customers are generally accommodating,” the source said.
The insider further emphasized that current operations have not been materially impacted, noting that the company maintains approximately nine months of metal silicon inventory as safety stock. By comparison, most polysilicon producers typically hold one to two months of metal silicon as raw material reserves.
Nevertheless, another market participant cautioned that the ultimate impact will depend on the duration and scope of the conflict. If hostilities persist, prolonged logistics disruptions could delay raw material replenishment, increase shipping costs and exacerbate price volatility, the source said, adding that the project’s metal silicon is sourced from other parts of Asia.
From a longer-term perspective, industry participants noted that solar manufacturing projects still under construction or in the planning phase could face extended timelines, potentially influencing investor assessments and capital allocation decisions.
“Investment consortium funding operates on cyclical dynamics,” one industry insider said. “If the conflict becomes protracted and geopolitical uncertainty persists, capital initially earmarked for these solar projects may be redirected to other regions. Over time, this would increase uncertainty surrounding the implementation of such projects.”
According to market sources, two wafer production projects and one solar cell project currently under development in the Middle East are at a critical stage of fundraising, and their progress warrants close monitoring.
Another market participant acknowledged that the current international environment is not conducive to investment in Middle Eastern solar manufacturing. However, the source emphasized that geopolitical tensions are not the decisive factor shaping the region’s long-term industrial prospects. “Ultimately, sustained demand growth in the PV market remains the primary driver of development,” the source said.
Another market observer described the immediate impact on the PV sector as manageable. The longer-term implications, however, will depend on whether the conflict leads to enduring concerns over regional security, including energy security. Such developments could shape the outlook for PV manufacturing in the Middle East in the years ahead, the observer added.
–Reporting by Summer Zhang, szhang@opisnet.com; Brian Ng, bng@opisnet.com; and Jun Won Lee, jlee1@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com