Governments across Asia are racing to secure alternative energy sources as the closure of the Strait of Hormuz stretches fuel reserves to critical levels, with several nations warning they could run dry within weeks.
The Philippines has emerged as one of the most vulnerable nations, with President Ferdinand Marcos Jr declaring a national energy emergency last week, making him the first leader to do so amid the conflict. The Philippines’ 90% dependency on Middle East oil imports has left it severely exposed to the Hormuz blockage.
The Philippines’ energy secretary, Sharon Garin, recently warned lawmakers that the country could run out of fuel within two months if backup suppliers are not secured in the next month and a half. “The worst-case scenario is we run dry; this country runs dry,” Garin stated before a Senate committee.
However, Marcos said on Friday that the country had since secured sufficient crude supply until June 30, while ordering the energy department to continue sourcing from Russia, Japan, China, and South Korea. “My instruction to them is, ‘Do not stop. Continue looking for additional supply because we do not know how long this situation will last’,” the president added.
The crisis is reverberating across Southeast Asia. Vietnam suspended environmental and consumption taxes on petrol, diesel, and jet fuel until April 15 at a cost of approximately $270mn a month to state coffers, as petrol prices surged 21% and diesel 84% since the start of the war, according to top fuel trader Petrolimex. Vietnam Airlines has announced it is cancelling dozens of domestic flights from April due to jet fuel shortages.
In Thailand, the shortage is spreading across transport, tourism, and agriculture, with fishermen stranded at docks and farmers contending with diesel shortages and fertiliser hoarding, while Myanmar has introduced an alternating odd-and-even vehicle rationing system and Cambodia has been forced to import additional fuel from Singapore and Malaysia.
South Asia is facing equally severe pressures. Bangladesh, which imports around 95% of its oil, has seen petrol stations in some districts run dry despite rationing, while Pakistan closed schools for two weeks. It also shifted universities to online classes and adopted a four-day government workweek to conserve fuel. Sri Lanka declared every Wednesday a public holiday and introduced a mandatory fuel pass for vehicle owners, with
stockpiles projected to run dry within weeks.
The supply shortage has compounded disruptions to energy flows from Qatar, one of Asia’s primary LNG suppliers. The Minister of State for Energy Affairs HE Saad bin Sherida al-Kaabi, who is also QatarEnergy President and CEO, previously announced that Iranian strikes on the Ras Laffan gas facility damaged two LNG processing trains and one gas-to-liquids plant, destroying approximately 17% of Qatar’s LNG export capacity, resulting in an estimated $20bn in lost annual revenue.
“The damage sustained by the LNG facilities will take between three and five years to repair,” stated al-Kaabi, who also announced that QatarEnergy declared force majeure on some of its long-term LNG supply contracts, affecting customers in Italy, Belgium, South Korea and China, as production and supply disruptions caused by the US-Israeli war on Iran rippled through global energy markets.