Middle East Conflict Triggers Energy Crisis Across Asia

Asian nations are implementing emergency energy conservation measures as ongoing conflict in Iran disrupts critical oil and gas supplies through the Strait of Hormuz. Countries like Japan, South Korea, and Vietnam are releasing strategic reserves and cutting consumption as fuel prices surge across the region.

Nations across Asia are implementing emergency measures to safeguard energy supplies and shield citizens from rising costs as military conflicts involving Iran severely impact oil and gas deliveries through crucial shipping routes.

The energy shortage is affecting Asia more severely than other regions due to the continent’s dependence on imported fuel, with much of it transported via the Strait of Hormuz — a vital waterway now facing significant disruption. Since hostilities between Israeli and U.S. forces against Iran, along with Iranian counterattacks on Israel and Gulf states began on February 28, fewer than 90 ships — primarily from India, Pakistan, and China — have successfully navigated the strait.

“The countries that are exposed to that supply disruption are not so much in Europe, or in the Americas, they’re actually really in the Asia region,” said Michael Williamson of the United Nations Economic and Social Commission for Asia and the Pacific.

Ramnath Iyer from the U.S.-based Institute for Energy Economics and Financial Analysis warns Asia should brace for “cascading impacts into all economic activities.”

Japan faces particularly severe exposure to strait disruptions, depending on the passage for approximately 93% of its petroleum imports. Fuel costs are already rising sharply — regular gasoline reached about 175 yen ($1.09) per liter on Thursday, climbing from roughly 144 yen ($0.91) just one month earlier.

Japanese authorities have responded by releasing 15 days worth of private oil stockpiles, then tapping a month’s supply from government reserves. Ministry officials report the nation maintained approximately 250 days of reserves at the close of last year.

However, public anxiety is increasing. Experts caution about potential parallels to the 1970s oil crisis — also sparked by Middle Eastern turmoil — which caused severe shortages and lengthy fuel lines. Pressure is mounting to accelerate renewable energy adoption, as Japan trails other developed countries in wind and solar capacity.

South Korea receives roughly 70% of its oil and 20% of its liquefied natural gas from Middle Eastern sources. Higher petroleum costs have created lines at discount fuel stations, while delivery personnel, truck drivers, and greenhouse operators struggle with increased expenses. Nevertheless, supply interruptions remain contained, and government representatives say reserves could sustain the country for approximately seven months.

Seoul is implementing additional measures to strengthen energy security by removing national restrictions on coal power generation, planning nuclear output increases, and evaluating potential resumption of Russian crude oil and naphtha purchases — essential for plastics production.

While China relies heavily on strait shipments — the world’s largest by volume — the nation remains relatively protected. Substantial strategic oil and gas stockpiles, combined with expanding renewable sources now comprising about 30% of its energy portfolio, have helped China weather immediate impacts.

Chinese citizens are nonetheless experiencing higher travel and fuel expenses. Airlines are increasing international route fares to counter soaring fuel costs, with some budget carriers doubling ticket prices on busy routes, according to domestic media reports.

Vietnam’s export-focused manufacturing sector faces rising fuel and shipping costs that are increasing production expenses. Government media reported steel, textile, and footwear producers confronting higher input prices, while retailers indicate suppliers are requesting price hikes or temporarily halting deliveries.

Climbing diesel costs are also elevating transportation and farming expenses. Tourism and passenger travel face mounting pressure. Officials warned of potential jet fuel shortages in April, encouraging airlines to review schedules and prepare for possible service reductions.

Vietnamese authorities say they are employing price controls to prevent sharp fuel cost increases and maintain market stability.

Energy supply interruptions have also affected Thailand, where LNG generates more than half of electricity, with approximately 40% imported from Middle Eastern countries.

Thailand’s emergency energy strategy halted petroleum exports, increased coal production and hydroelectric generation, and instructed government facilities to reduce energy usage.

As Thailand turns to spot markets for expensive LNG purchases, specialists warn energy costs will climb as national subsidy funds are exhausted.

Indonesia has managed to avoid raising energy prices thus far, but this protection may end after Eid al-Fitr, the Islamic celebration concluding Ramadan.

With the conflict continuing, analysts predict Indonesia will soon confront a challenging decision: maintain expensive subsidies protecting consumers from higher prices, or reduce them to remain within budget constraints — risking increased inflation.

The Philippines has distributed cash payments of 5,000 pesos ($83) to approximately 139,000 tricycle taxi operators in Manila to help counter rising fuel expenses. The initiative will expand nationally to include other public transport drivers, while fuel subsidies will extend to fishermen and farmers.

Government offices have also adopted four-day work schedules to reduce energy consumption, and proposals are under consideration to lower biofuel costs.

To address the energy shortage, Pakistan mandated two-week school closures and reduced government vehicle fuel allowances by 50% for two months.

Officials report alternative oil supply channels are being investigated, including imports from Saudi Arabia. Energy shipments are also arriving through the Red Sea port of Yanbu.

For conservation purposes, next week’s Pakistan Day parade was cancelled. The anniversary will be observed with a simple flag ceremony instead.

India has increased domestic cooking gas production and prioritized household distribution. Industry associations say this action has reduced supplies for commercial users including hotels and restaurants.

Nearly half of India’s crude oil imports and LNG transit through the strait. LPG serves as the primary cooking fuel for millions of households, making reliable supplies essential for daily life and broader economic stability.

Two Indian-flagged LPG tankers have crossed the strait since fighting began, easing some supply pressure.

Nepal’s only petroleum distributor, the government-operated Nepal Oil Corporation, began rationing cooking gas by filling cylinders to only half capacity — approximately 7.1 kilograms (15 pounds) — to extend supplies to more families.

Gasoline prices increased by roughly 10% and authorities encouraged households to adopt induction cookers to reduce gas consumption.