Iran War Winner #1: Lithium – Fat Tail Daily

There is another a quiet winner from the Iran war that barely makes the front page.

Battery Energy Storage Systems (BESS).

Bloomberg laid it out in a piece this week. The war has lifted demand for anything that cuts reliance on expensive fossil fuels:

Source: Bloomberg

BloombergNEF expected global storage installations to jump about a third in 2026. With fuel disruptions sticking around, that number only goes up.

A Chinese battery maker flagged a sharp Q1 profit lift tied to the Iran upheaval. A Vietnamese developer is swapping a planned LNG-to-power project for renewables plus storage.

This is happening in real time.

Australia is already the largest battery market on a per capita basis. Waratah Super Battery is outcompeting gas at the evening peak.

The IEA reckons batteries are now one of the most attractive options in any power investment.

So goes the money, so goes the market.

Here’s where it gets interesting for us as Australian investors.

BESS runs on lithium. Every gigawatt-hour switched on is lithium demand that was not in the base case two years ago.

Total demand currently across all use cases: ~1 million metric tons.

EV demand is not sleeping either.

Spot battery-grade lithium carbonate ripped from around US$13,400 per tonne in early December to over US$26,000 by late January. And the lithium price is having another crack (price in CNY):

Source: Tradingeconomics

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Now the supply side

Very few projects intended to address this deficit are ready for financing by banks. Binding offtakes, DFS, permits, water, power, tailings.

The list of requirements is long.

S&P Global warns that even aggressive development of the entire post-Preliminary Economic Assessment (PEA) pipeline leaves a gap.

Around US$37 billion of capital is needed to chase the 2030 deficit.

Hard-rock projects typically take 10 to 17 years from discovery to first tonne.

Brines take 13 to 15.

Project development always takes longer than the market thinks.

Always.

That’s the setup.

BESS demand pulled forward by the Iran war, EV demand rocketing because of pain at the pump, and a pipeline that cannot respond.

In my view, this makes lithium the best-performing metal price of 2026.

Copper can only go so far, silver went vertical and broke down, and gold is consolidating.

Uranium is a potential dark horse.

But when sentiment turns on a commodity that spent three years being hated, the re-rate in the right stocks can be violent.

It’s not all bad news in the stock market.

You just need to know where to look.