Asian countries are taking emergency measures to prevent their countries from spiraling due to the war in Iran, as the Middle Eastern conflict’s impact on the Strait of Hormuz disproportionately rattles the region’s energy markets.
Roughly 20% of the world’s oil and liquefied natural gas flows through the channel. Around 80% of the oil that typically passes through the strait is bound for Asian markets, according to the International Energy Agency. Economies that have been particularly exposed to blockage in the strait include the Philippines, South Korea, Laos, and Thailand.
TRUMP JOKES HEGSETH DOESN’T WANT IRAN WAR TO END
“Right now the closure of the Strait of Hormuz is, in a sense, an Asian crisis,” Singaporean Foreign Minister Vivian Balakrishnan told Reuters on March 23.
The Philippines
The Philippines was the first to declare a national emergency on Tuesday in reaction to spiking energy prices. President Ferdinand Marcos Jr. said the Iranian conflict posed an “imminent danger” to the country’s energy supply. His country is the most vulnerable to the war, according to Maybank Investment Bank, with over 90% of its crude oil imports sourced from Persian Gulf countries. The declaration will last for a year.
Philippine authorities say they have enough fuel to last only around 45 days at typical consumption levels. Marcos is working to procure 1 million barrels of oil to add to the current stock. His emergency declaration allows the Philippine government to exert control over fuel prices and fast-track imports from alternative suppliers.
The government is also subsidizing operators of public transport, providing over $80 to motorcycle taxi drivers and other public transport workers nationwide. Free bus rides have also been provided to students and workers in selected cities, according to the Associated Press.
In addition, the Philippines launched a four-day workweek for many public workers, similar to austerity measures taken in Pakistan. Philippine Ambassador to the United States Jose Manuel Romualdez told Reuters that Manila is working with the Trump administration to allow it to import oil from U.S.-sanctioned countries. Russia is one of the dominant oil suppliers sanctioned by the U.S, though Washington has relaxed certain sanctions on Moscow after the war with Iran destabilized the energy market.
“Nothing is off the table,” Marcos said. “We are looking at everything we can do, whatever suggestion, whatever idea.”
South Korea
South Korea imports about 70% of its crude oil and 20% of its LNG from the Middle East. On Tuesday, President Lee Jae Myung called for an emergency response to the evolving situation, including the swift passage of a “wartime supplementary budget” to aid businesses and residents hit by soaring energy prices.
Leading lawmakers said they are aiming to roll out a roughly $17 billion budget by next month, and plan to expand fuel tax cuts. Fuel tax cuts are going from 7% to 15% for gasoline and from 10% to 25%, and the government is extending the tax cut policy until May rather than the initial expiration in April.
In addition, the government is establishing an emergency economic task force led by the prime minister and has introduced a fuel price cap for the first time in nearly three decades, raising the temporary ceiling on oil prices for the second time in two weeks on Friday.
The government also rolled out a 12-step initiative for citizens designed to reduce energy usage. Residents are being asked to take shorter showers, ride bicycles for short trips, charge phones and electric vehicles during the day, and only use washing machines and vacuums over the weekend.
“With the situation likely to be prolonged, there is a need to further strengthen a preemptive, whole-of-government response system, including preparations for worst-case scenarios,” Prime Minister Kim Min-seok told reporters Wednesday.
India
India is the world’s second‑largest liquefied petroleum gas consumer, the third-biggest oil importer and consumer, and the fourth-largest importer of LNG.
Prime Minister Narendra Modi told both houses of Parliament last week that the debacle in the Strait of Hormuz marked a “concerning situation.” But he struck a reassuring tone, referencing the country’s energy reserves and saying that India has worked to diversify its oil and gas supply. The government particularly sought to alleviate concerns in the cooking industry, ordering a 25% increase in the production of LPG cylinders.
The development comes as around 330 million households rely on LPG for cooking, and roughly 60% of India’s gas comes through the Strait of Hormuz, according to the New York Times.
Cremations in India have largely ground to a halt due to LPG shortages. The largest crematorium in the Indian state of Maharashtra was forced to pause all gas-fired cremations because of the scarcity of fuel, according to India Now magazine. Relief could be coming after at least two LPG tankers have made it safely through the strait last week, according to Indian media. Around 20 Indian-flagged ships remain in the war-hit Gulf region, according to the shipping ministry.
India’s finance ministry cut excise taxes on Thursday for the domestic production of petrol and diesel and increased taxes on aviation fuel and diesel exports, in an effort to keep retail fuel prices down.
“This will ensure adequate availability of these products for domestic consumption,” Petroleum and Natural Gas Minister Hardeep Singh Puri said.
As India looks to stave off losses, the country is reportedly eying expanding energy ties with Russia. If the deal is implemented, India’s imports of Russian crude would increase from 20% of total imports to 40%, according to Reuters.
Thailand
Thailand imports about half of its crude oil from the Middle East. Southeast Asia’s second-largest economy had around 95 days of energy reserves left, as of March 10, according to Energy Minister Auttapol Rerkpiboon, but farmers and fishers are already grappling with fuel shortages, as long queues form at gas pumps across the country. A fisher group warned last week that the multibillion-dollar industry could come to a complete standstill within days if the government does not offer support to help with the cost of fuel, according to the Guardian.
The government rolled out a series of measures to combat the crisis, including plans to buy rice at above market rates, subsidise fertilizer costs, and a seven-point plan to address energy shortages last week. Officials are encouraging people to dress lighter, take off their jackets, carpool, and adjust air conditioning levels. Thai Prime Minister Anutin Charnvirakul’s office has ordered civil servants to work from home, suspend overseas trips, and take the stairs instead of the elevators.
“If the situation escalates, the government may consider mandatory measures including dimming advertising signs at shops, cinemas, and businesses and closing gas stations at 10 p.m.,” the government said in a statement.
Thailand is targeting the situation with assistance to the sectors most affected by the crisis. In the public transport and logistics sectors, hundreds of thousands of truck and public transport drivers are receiving fuel subsidies. Fishermen are being provided with B20 diesel, which is cheaper than conventional diesel. And farmers are being offered lower-priced fertilizer, as around half of the country’s fertilizer supplies come from the Middle East.
Additionally, Thailand lifted its fuel price cap after Deputy Prime Minister and Finance Minister Ekniti Nitithanprapas said price controls had only worsened the country’s situation.
Laos
Laos is a landlocked country and relies predominantly on oil from neighboring Thailand, which has cut exports to Laos by 25% amid the Iranian conflict. Laos was forced to shut down about 1,000 of 2,538 petrol stations nationwide following the import cut, leading the government to take a series of emergency measures, according to the Straits Times.
The government has ordered agencies to limit in-person meetings, and encouraged people to switch to electric vehicles, cycle, and take public transportation. The government has cut the number of school days to three per week for all public and private institutions and introduced a flat bus fare to ease the impact of the fuel crisis.
“Last time I could fill up my bike was Friday, and now I’m running out,” one taxi driver told AFP. “If I can’t find any open stations near my house, I’ll have to stop working for a few days.”
Singapore
Over 90% of Singapore’s electricity is generated from LNG. And last year, around half of its fuel purchases were from Qatar, according to ship-tracking data compiled by Bloomberg. In the wake of the war in Iran, fuel prices at the pump have risen from about $2.23 per quart on Feb. 23 to about $2.69 on March 21, according to TTG Asia, forcing major taxi companies to raise fares.
Singaporean Manpower Minister Tan See Leng revealed on March 20 that his country has energy reserves that will last “for months” and said there has not yet been a need to dip into the government’s emergency supply. But he warned Iran has dealt a lasting blow to energy stability with its strike on Qatar’s Ras Laffan facility, the world’s largest LNG export plant. Rebuilding the facility could take up to five years, Leng said.
“We need to really brace ourselves for a bumpier ride ahead,” he said, highlighting that electricity tariffs could rise, according to the Business Times.
Singapore is urging residents to use energy-efficient appliances, increase air-conditioning temperatures, and install solar panels, as part of an effort to combat the energy crisis.
In addition, the government is utilising a standby LNG facility, established by its Energy Market Authority in 2021, that firms can draw upon if gas supplies are affected. And the country recently launched a new LNG procurement operation known as Singapore GasCo.
Last week, Singapore and Australia announced a pact to deepen their energy relationship.
“We are committed to working together to strengthen energy supply chain resilience, including by deepening regional co-operation, accelerating renewable energy transition, addressing unjustified import and export restrictions, and maintaining open trade flows,” Australian Prime Minister Anthony Albanese and his Singaporean counterpart, Lawrence Wong, said in a statement on March 23.
Japan
Japan imports more than 90% of its crude oil from the Middle East. Around 4 million metric tons of its annual LNG imports, which account for 6% of its total imports, come from the Strait of Hormuz.
With the advent of the Iran war, Prime Minister Sanae Takaichi announced last week that Japan would begin the biggest-ever release of oil from its strategic reserves, starting Thursday. The country further revealed on Thursday that it will relax regulations on coal plants in a bid to free up more energy resources. The government proposed a one-year suspension of a 50% cap on the capacity utilization rate of coal-fired power plants with generation efficiency below 42%.
“There is increasing uncertainty about future LNG procurement,” an industry ministry official told a special government panel. “We believe that it is necessary to increase the operation of coal-fired power plants and save LNG fuel.”
The government has taken a series of additional measures, including introducing subsidies for fuel products to cap gasoline prices and urging residents not to hoard toilet roll, amid fears that its supply could be negatively affected by disruptions to the energy market.
Japan is also accelerating plans to expand nuclear energy production, a measure it hopes could act as a buffer to further upheaval.
Vietnam
Like other countries, the Vietnamese government has urged people to work from home to cut back on energy use. The government took a major step last week in addressing the crisis, announcing that effective midnight Thursday, it would slash fuel taxes to zero. The environmental protection tax, value-added tax, and special consumption tax on gasoline, diesel, and aviation fuel have been cut through April 15. Gas prices dropped by 19% on Friday in response to the changes.
“This is considered an urgent and effective solution to stabilize the petroleum market and ensure national energy security amidst the escalating conflict in the Strait of Hormuz, which is creating the ‘biggest energy bottleneck ever,’ pushing crude oil prices above $100 per barrel and leading to a sharp increase in global and domestic energy prices,” according to the government website.
HOW DOES ISRAEL FIT IN THE US-IRAN TALKS?
The country has run into critical difficulties due to the energy shortage, with major airlines reducing flights by significant margins. Nghi Son Refinery and Petrochemical, Vietnam’s biggest refinery, has said it has been producing at “maximum capacity” and has enough supply to run operations as usual through the end of May.
Like Japan, Vietnam is accelerating efforts to expand nuclear energy production in reaction to the oil and gas shortage. It is carrying out the initiative in conjunction with Russia and advanced the deal last week. On March 23, Vietnam signed an agreement with Russia’s state nuclear energy corporation, Rosatom, to build the Ninh Thuan 1 nuclear power plant.
