Middle East War Plunges Asia into Major Energy Crisis, Forcing Region to Reorganize Supplies, Ration Fuel, and Expand Strategic Partnerships
The war in the Middle East triggers an energy shockwave that hits Asia hard. Between export restrictions, shortages, and diplomatic maneuvers, countries in the continent are engaged in a race against time to secure their oil and gas supplies. The visit this week by Indonesian President Prabowo Subianto to Tokyo illustrates this urgency.
“It is vital to maintain rational economic relations,” declared the Indonesian president to Japanese business leaders after signing agreements for long-term projects in oil, gas, and geothermal energy. “The geopolitical situation in the Middle East creates strategic uncertainty for the security of our energy supply.”
The largest economy in Southeast Asia and the fourth most populous country in the world, Indonesia, could announce restrictions on fuel consumption and distribution, joining Sri Lanka, which has implemented rationing and reduced the workweek to four days, or the Philippines, which has declared an energy emergency. Myanmar, on the other hand, now enforces alternate-day car usage.
Tokyo’s Assistance
In this context, Jakarta is exploring short-term bilateral agreements to strengthen liquefied natural gas (LNG) supplies to Tokyo in exchange for liquefied petroleum gas (LPG), according to Djoko Siswanto, head of the Indonesian oil and gas regulator SKK Migas. Discussions between Prabowo Subianto and Japanese Prime Minister San Takaichi also focus on enhancing energy security cooperation, although no LNG for LPG exchange has been confirmed yet.
Japan, relying on nearly 95% of its oil and 11% of its LNG from the Middle East, emerges as a crucial partner for the entire region. Inpex, the Japanese producer, is exploring similar agreements with India, considering an exchange of LPG for naphtha and crude oil. Vietnam and the Philippines have also sought Tokyo’s assistance to secure their supplies.
But the situation complicates with China’s ban on refined fuel exports. This decision, along with similar measures in Thailand, has significantly impacted Vietnam, which relies on its neighbors for over 60% of its aviation fuel. “If the crisis continues, Asian countries may need to establish multilateral frameworks to assist each other and negotiate with other sources of supply,” warns Hiroshi Hashimoto, a researcher at Japan’s Institute of Energy Economics.
The Russian Route
Facing these restrictions, Russia emerges as an unexpected alternative supplier. South Korea imported Russian naphtha after the temporary lifting of American sanctions, while India increased its purchases of Russian oil. Sri Lanka, Thailand, and Bangladesh are also in negotiations with Moscow. However, the American waiver expires on April 11, making the agreements urgent and uncertain.
For smaller countries like New Zealand, the situation is particularly critical. Prime Minister Christopher Luxon has been in contact with Singapore, Malaysia, South Korea, and the President of the European Commission. “Unless we multiply options, we are too small to be considered in a frantic fuel search in two or three months,” emphasizes Energy Minister Shane Jones.
Real-time data from maritime specialist Kpler confirms the magnitude of the crisis. “We estimate that Asia will be, for now, the region that will suffer the most,” warns Jean Maynier, president of Kpler. “This will not be enough for China, it will not be enough to cover the needs of large countries like the Philippines or Indonesia. It is a real energy crisis.”
Ghost Fleets
The impact is already being felt in the Strait of Hormuz, a strategic passage for over 20% of the world’s oil trade, where traffic has dropped by 95% since the conflict began. “Currently, there is almost no crude oil arriving in Asia. Clearly, stocks are depleting,” notes Mr. Maynier. The situation has led some actors to resort to “ghost fleets,” vessels operating outside traditional routes to transport sanctioned oil or bypass regulations. “These ghost ships try to disable their tracking devices and evade surveillance, usually because they are involved in smuggling or trying to export cargo under sanctions,” he adds.
Facing these disruptions, the region must improvise makeshift solutions while seeking long-term strategic partnerships. Asia is entering an era where energy security becomes a matter of economic and geopolitical survival, where every liter of fuel counts, and where international cooperation could make the difference between scarcity and stability.
