Indo‑Pacific Confronts Prolonged High Energy Costs and Ripple Effects
While the United States and Iran have entered a fragile ceasefire, countries across the Indo-Pacific continue to face significant energy disruptions. Hydrocarbon supply bottlenecks have driven a sharp increase in energy prices, with the prolonged “oil shock” spilling over into other fuels — most notably coal, which has risen by around 23 percent since the war began.
The impact has been particularly severe in vulnerable markets. In the Philippines, diesel prices have surged by up to 153 percent and gasoline by 63 percent, making it one of the hardest-hit countries in the region. Beyond consumers, industries are also under pressure. India’s manufacturing sector, for example, has been strained by liquefied natural gas (LNG) shortages following force majeure declarations by QatarEnergy and other Gulf producers, forcing a shift toward coal as a substitute fuel.
With limited prospects for a near-term decline in prices, governments across the Indo-Pacific have moved quickly to implement short-term mitigation measures. Based on regional data, BGA identifies four primary approaches: demand reduction, price suppression, reserve deployment and export controls. The choice of strategy reflects each country’s political priorities, fiscal capacity and energy profile.
Countries with significant strategic reserves, such as Japan, have released stockpiles to stabilize domestic prices and are considering further disbursements. Others have focused on shielding consumers from price shocks. Indonesia, prioritizing political stability, has expanded fuel subsidies in practice by holding prices steady, including for higher-grade fuels.
Meanwhile, countries with strong refining capacity are prioritizing domestic supply. India has invoked the Essential Commodities Act to increase refinery output for local markets, while China has curtailed exports to retain supply domestically.
Demand-side measures are also widespread, particularly in countries with limited fiscal space or domestic energy capacity. Cambodia has launched public campaigns to reduce electricity consumption and limit official travel. The Philippines has taken more aggressive steps, including implementing a four-day workweek for public officials and offering free bus rides to reduce reliance on private vehicles.
At the same time, the persistence of high energy prices is accelerating longer-term policy shifts across the region. Governments are increasingly focused on diversifying supply and reducing dependence on hydrocarbons. Singapore, for instance, is advancing the Association of Southeast Asian Nations (ASEAN) Power Grid to strengthen regional energy integration and reduce reliance on LNG. It is also exploring nuclear energy through capacity-building partnerships with the United States, while reinforcing energy ties with Australia to secure more stable supply.
Overall, the Iran conflict has underscored the Indo-Pacific’s vulnerability to external energy shocks, prompting both immediate policy responses and a renewed push toward structural energy transition.
Below is BGA’s market analysis and insights from our teams across the region on the impact of the Iran conflict on energy security in countries across the Indo-Pacific.
For further questions or comments, please contact BGA Director of Energy, Climate and Resources (ECR) Chayamon Srisongkram, BGA Director of ECR Mardika Parama or BGA Head of Research Murray Hiebert.
Australia
| Energy Price (in USD per liter) | Energy Availability |
| Gasoline: $1.58 per liter, up 41 percent since February Diesel: $2.23 per liter, up 83 percent since February | Gasoline: Widely available Diesel: Widely available LPG: Widely available LNG: Widely available |
Impact of Crisis on Energy Supply
Although Australia is highly dependent on imports of crude and refined oil, the government says fuel shipments to Australia have been secured well into May. Before the crisis, Australia’s fuel stockpile was approximately 36 days of petrol, 30-34 days of diesel and 29-30 days of jet fuel. Currently, the country’s fuel stockpile is 39 days of petrol, 29 days of diesel and 30 days of jet fuel. Shortages at service stations have been relatively small and are falling. About 97 percent of Australia’s service stations have diesel, and 98 percent have petrol. The government’s April 1 cuts to the fuel excise have reduced the petrol price by around 33 cents per liter; however, the price of diesel has only fallen by around four cents per liter.
Short-Term Government Responses
The government has developed a four-level National Fuel Security Plan and currently has Australia at Level 2. Up to 762 million liters of petrol and diesel will be released from the Australia’s domestic reserves, targeting local market pressures.
The government has extended its subsidy for the country’s last two refiners until 2030. The government is prioritizing diesel supply to regional New South Wales farmers during sowing and seeding season. The fuel excise on petrol and diesel has been cut for three months, effective April 1. The government has deferred the next scheduled increase in the Heavy Vehicle Road User Charge by six months. States and territories have agreed to forgo increased GST revenue on fuel transactions.
AUD 1 billion (US$690 million) in interest-free loans has been made available for manufacturing, fertilizer and fuel businesses dealing with the economic costs of the conflict. Export Finance Australia has been given new powers to underwrite fuel purchases from international markets.
Prime Minister Anthony Albanese has engaged international counterparts from oil-supplying countries and reminded them that Australia is a reliable supplier of LNG. Albanese visited Singapore from April 9-11. In a joint statement, Albanese and Singapore Prime Minister Lawrence Wong committed to a legally binding protocol to the Singapore-Australia Free Trade Agreement on economic resilience and essential supplies, establishing an Australia-Singapore economic resilience dialogue and holding an energy ministerial dialogue.
Expected Policy Shifts
The Middle East conflict has brought energy security into policy focus and invited debate on Australia’s energy transition. Albanese believes previous economic mindsets have “put our nation in this position of vulnerability” and “put multinational firms ahead of Australian gas users.” The government will continue to invest in renewable energy initiatives and may accelerate the establishment of a domestic east coast gas reserve.
Nevertheless, measures to buttress Australia’s fuel stockpile should not be ruled out ahead of the May 12 budget. A “windfall tax” on surging LNG profits appears unlikely. The government will continue to strengthen arrangements with Singapore, Korea, Malaysia and Japan to ensure long-term fuel supply. The center-right opposition, which opposes the government’s net-zero goal, has called for fast-tracking of mining exploration and coal and gas projects which it claims is partly hindered by recent changes to the federal environmental protection act. The center-right Queensland state government has announced it will unlock Australia’s first oil field in 50 years and has called on the federal Labor government to expedite approval. Other state governments may come under pressure to take similar measures.
Cambodia
| Energy Price (in USD per liter) | Energy Availability |
| Gasoline: $1.38 per liter, up 48.4 percent since February Diesel: $2.05 per liter, up 115.8 percent since February | Gasoline: Widely available Diesel: Widely available LPG: Widely available LNG: Widely available |
Impact of Crisis on Energy Supply
Geopolitical tensions involving the United States, Israel and Iran have disrupted global energy flows, driving oil prices higher worldwide. Cambodia, which is an oil-importing country, has seen retail gasoline rise to $1.38 per liter and diesel to $2.05 as of early April — representing a 48.4 percent increase in gasoline prices and a 115.8 percent increase in diesel prices compared to late February. The Cambodian government has confirmed that the country is not facing a fuel shortage, with imports stable and 21 days of reserves maintained. Still, higher fuel prices are increasing transportation, logistics and cooking energy costs, adding inflationary pressure and weakening consumer purchasing power.
Short-Term Government Responses
Amid a sharp spike in global oil prices linked to Middle East disruptions, the Cambodian government moved quickly in March 2026 to stabilize domestic fuel markets and shield its economy. Emergency measures included eliminating import duties and customs tariffs on fuel, reducing the value-added tax on gasoline and diesel from 10 percent to 4 percent and maintaining a direct fuel subsidy of $0.065 per liter, with additional discounts triggered at thresholds.
In early April, Cambodia reduced the value-added tax to zero percent on diesel and liquefied petroleum gas (LPG) to ease the impact of rising global energy prices. Demand pressures were eased through directives requiring ministries to cut fuel and electricity use, limit nonessential travel and shift meetings online.
Addressing supply risks, the minister of energy told Reuters that Cambodia shifted fuel imports toward suppliers in Singapore and Malaysia to offset disruptions from Vietnam and China. Sub-decree No.52, issued in early March, signaled a structural pivot by slashing import duties on renewable energy equipment and electric vehicles, including by cutting electric vehicle tariffs from 35 percent to zero percent.
Expected Policy Shifts
The unpredictable Middle East conflict has become a catalyst for Cambodia to accelerate long-term energy policy shifts. The government is actively diversifying supply sources, reducing reliance on Gulf and regional neighbors, while opening preliminary talks with Australia to secure LNG for new power generation. Partnerships with global majors such as Total and Chevron are helping mitigate short-term risks and broaden upstream engagement.
Structurally, Cambodia is pursuing a pragmatic transition: it has committed to raising renewable and clean energy to 70 percent of electricity generation by 2030, advancing electrification and building a 900-megawatt LNG plant to replace coal and integrate solar. Cambodia also plans to establish its first oil refinery within three years. This underscores the country’s risk-management approach: ensuring supply security during transition while maintaining momentum. The sequenced strategy blends immediate resilience with long-term diversification.
China
| Energy Price (in USD per liter) | Energy Availability |
| Gasoline: The National Development and Reform Commission (NDRC) raised gasoline by CNY 695 ($101.79) per ton March 10. Diesel: The NDRC raised diesel by CNY 670 ($98.13) per ton March 10. No further official domestic announcements confirmed. | Gasoline: Widely available Diesel: Available nationwide with some industrial users facing strain LPG: Industries face tightened supply LNG: Industries face tightened supply |
Impact of Crisis on Energy Supply
The NDRC raised retail fuel prices March 10, with gasoline up CNY 695 ($101.79) per ton and diesel up CNY 670 ($98.13) per ton. State-owned China National Petroleum Corporation, Sinopec and China National Offshore Oil Corporation were directed to maintain production and ensure stable supply. The NDRC’s Price Monitoring Center noted that developments in the Middle East would be the key factor in global oil price trends ahead. This is the only confirmed domestic energy intervention in the official record to date.
No official source has disclosed data on crude import volumes, refinery run rates, LNG reserve levels or strategic reserve usage at any point during the crisis. Commercial and media sources report a subsequent price ceiling, a fuel export ban and cuts to Sinopec refining runs. None of these have been confirmed in official statements.
The Ministry of Foreign Affairs’ assessment of the economic damage sharpened April 1. Spokesperson Mao Ning said the conflict’s spillover was causing “more extensive disruptions to the stability of global energy supply, unimpeded operation of industrial and supply chains and global economic growth.”
Short-Term Government Responses
On the domestic side, the January 2025 Energy Law gives the government authority to direct state-owned enterprise production and supply (as invoked on March 10) and to authorize strategic reserve releases. No release has been announced. The 15th Five-Year Plan approved at the “two sessions” in March designates energy security as a national priority and plans infrastructure investment exceeding CNY 7 trillion ($1 trillion) in 2026. No emergency fiscal measures were included in the government work report.
Diplomatically, China has been more active than at any prior stage of the crisis. Foreign Minister Wang Yi has made 26 confirmed calls with parties including Iran, Israel, Russia and the Gulf states. Special Envoy Zhai Jun visited Saudi Arabia, the United Arab Emirates, Bahrain and Egypt in March and met the Iranian ambassador in Beijing March 20. The Ministry of Foreign Affairs confirmed March 31 that three Chinese ships transited the Strait after coordination with relevant parties, the only official evidence of movement through the waterway. China and Pakistan issued a joint five-point peace initiative the same day. On April 8, China and Russia jointly circulated a draft United Nations Security Council resolution on the Strait of Hormuz, calling for a ceasefire, dialogue and respect for navigational rights.
Expected Policy Shifts
A ceasefire was announced April 8, brokered by Pakistan and welcomed by China. By the following day, the strait remained effectively closed, with Iran reimposing restrictions after Israeli strikes on Lebanon that Tehran said violated the ceasefire terms. The Ministry of Foreign Affairs confirmed that China had held talks with the United States on the Iran war in recent days, without disclosing details.
The situation remains fluid. The March 10 fuel price adjustment and the state-owned enterprise directive are the only confirmed domestic interventions on record. Beijing has not disclosed reserve or supply data publicly. The gap between its active diplomatic record and its near-silent domestic energy record is notable. The 15th Five-Year Plan’s treatment of energy security as a national priority points to longer-term moves to reduce Gulf exposure through domestic electrification, whatever the near-term outcome of the conflict.
India
| Energy Price (in USD per liter) | Energy Availability |
| Gasoline: $1.01-$1.09 per liter. No price change since February Diesel: $0.94-$1 per liter. No price change since February | Gasoline: Widely available Diesel: Widely available LPG: Local shortage for households, particularly in certain across tier 2 and tier 3 towns LNG: Tightened supply across tier 2 and tier 3 towns in the transportation sector as well as in certain industries, such as power generation, refineries and ceramics, moving to cheaper alternatives due to high spot prices |
Impact of Crisis on Energy Supply
The impact of the Iran crisis on India’s energy supply is varied depending on the energy source in question and has generally exposed sharp asymmetries in India’s energy resilience.
Approximately 90 percent of India’s LPG supply transits the Strait of Hormuz. Its effective closure has triggered domestic and commercial cylinder price hikes of between 7 percent and 18 percent. The government moved quickly to raise domestic refinery output by 30 percent, invoking the Essential Commodities Act and initiating diplomatic engagement to secure Iranian tanker clearance.
LNG has suffered a severe and structurally damaging blow. Since India sources 45 percent of its LNG from Qatar and holds no strategic gas reserves, the system had almost no capacity to absorb the Ras Laffan shock. Force majeure was declared across the supply chain, spot prices nearly doubled to $24 per million British thermal units and India was forced into partial diversification via the United States, Australia and Russia, all at significantly higher freight costs and with reduced supply certainty.
India’s strategic petroleum reserves, standing at 64 percent of capacity and covering approximately six demand days, offer limited insulation. A 30-day U.S. Treasury waiver allowed India to secure roughly 30 million barrels of Russian crude, though this arrangement remains both temporary and politically conditional.
Across all three commodities, the crisis has reinforced that India’s energy system is geographically concentrated, poorly buffered by strategic reserves and acutely exposed to any disruption. The risk gradient is highest for LPG, followed by LNG and crude.
Short-Term Government Responses
India’s response to the current oil shock reflects a calibrated posture that prioritizes short-term stability over structural correction. While near-term supply disruptions are assessed as manageable, the macroeconomic transmission — via inflation, external balances and currency pressure — is becoming more pronounced, elevating economic risk without yet triggering a shift in the government’s policy stance. New Delhi’s approach is anchored in price cushioning and market stabilization, drawing on inventories, fiscal buffers and administrative measures.
Coal’s role will be tactically reinforced in the near term as a reliability anchor, even as its share of installed capacity is not expected to grow materially. The policy framing will emphasize coal as a bridge and grid-stabilization tool rather than a baseload expansion strategy — a distinction that preserves climate optics while meeting near-term reliability requirements.
In the short term, affordability is dominating India’s energy policy, shaped by electoral sensitivities and the need to shield households and industry from price volatility. Over the medium term, the focus will shift toward energy security and growth through diversification, reserve expansion and alternative fuel infrastructure. In the longer run, climate objectives and strategic autonomy increasingly converge, with domestic renewable capacity positioned as the principal hedge against external supply shocks and geopolitical chokepoints.
Expected Policy Shifts
Diversification is likely to intensify, reflected in the expansion of India’s supplier base from 27 to 41 countries and increasing weight placed on nontraditional geographies such as the Americas and Africa to dilute exposure to Gulf chokepoints.
Indian public sector entities are expected to push harder for long-term and diversified LNG supply arrangements at stable pricing, even as they explore the creation of domestic protection and indemnity insurance mechanisms to reduce vulnerability to Western underwriting decisions during geopolitical stress. This marks a shift from spot market optimization toward resilience-driven contracting.
On buffers, phase II of the strategic petroleum reserve is being fast-tracked, adding an estimated seven days of additional crude cover and signaling a growing policy emphasis on physical resilience alongside price management. Over the longer term, the accelerated renewable energy integration is expected to reduce India’s dependence on fossil fuels, gradually aligning energy security objectives with climate and strategic autonomy goals.
Indonesia
| Energy Price (in USD per liter) | Energy Availability |
| Gasoline: Subsidized: $0.58 per liter. No hike since February Non-subsidized: $0.72 per liter, up 4.2 percent since February Diesel: Subsidized: $0.40 liter. No hike since February Non-subsidized: $0.85 per liter, up 7.4 percent since February | Gasoline: Widely available, with some isolated cases of shortages in furthermost regions. Diesel: Widely available LPG: Local shortages. Some regions in East Java, Madura, West Nusa Tenggara report shortages, while other regions report intermittent or irregular supply. LNG: Industries face tightened supply, including ceramics, fertilizer, glass industries and power plants. |
Impact of Crisis on Energy Supply
Unlike several regional peers, the Indonesian government maintains that the country is not facing a war‑induced energy crisis. Authorities have reaffirmed that fuel supplies remain adequate and that both subsidized and unsubsidized fuel prices will be kept stable, with subsidized prices frozen through the end of 2026.
Nonetheless, the introduction of daily caps on subsidized fuel purchases — while not affecting household consumption — is expected to strain logistics and freight operations.
Fuel inventories for gasoline and diesel remain above minimum safety thresholds overall, though subsidized RON 90 gasoline has reportedly slipped marginally below the 21‑day benchmark.
LPG represents the most acute vulnerability, with intermittent shortages reported across multiple regions. While market estimates placed LPG stocks at seven to eight days in early April, the Ministry of Energy and Mineral Resources disputes this assessment, claiming that additional imports from the United States and Australia have lifted national stockpiles above 10 days.
Indonesia does not import LNG, but the bulk of domestic production remains locked into inflexible long‑term export contracts — primarily with Japan and Korea — limiting supply reallocation. As a result, key domestic users including ceramics, fertilizers and power generation are experiencing tightened LNG availability.
Short-Term Government Responses
The government has instructed state-owned Pertamina to find immediate alternative sources to replace its crude and fuel imports from the Middle East, such as Australia, African countries and the United States, including by leveraging reciprocal trade arrangements under which Indonesia has pledged to increase imports of U.S. energy products. However, Pertamina reportedly continues to face tightened supply conditions, amid concerns about potential legal exposure associated with procuring crude and fuels at unusually high spot-market premiums.
Separately, the Ministry of Energy and Mineral Resources and the Special Task Force for Upstream Oil and Gas Activities have urged international oil companies operating in Indonesia to prioritize sales to domestic refineries — particularly Pertamina — rather than exporting production overseas.
The administration of President Prabowo Subianto has largely focused on preserving political stability, but several indicators suggest the absence of a coordinated strategy. For example, the government has chosen not to raise either subsidized or unsubsidized fuel prices. At the same time, it has instructed that fuel availability be maintained, with little indication that it will help absorb the pressure.
Expected Policy Shifts
Pertamina is reportedly exploring the procurement of crude oil and refined fuel supplies from South America, alongside further diversification of imports from Africa and traditional partners such as the United States, Canada and Australia.
In parallel, the government is advancing an ambitious energy transition agenda, including the development of 100 gigawatts of solar power capacity, the conversion of diesel-fired power plants, the electrification of up to 120 million fossil fuel-powered motorcycles, the transition from LPG stoves to electric alternatives, broader vehicle electrification and an increase in the biodiesel blending mandate to B50.
However, despite the appearance of a strategic shift toward renewable and alternative energy, progress remains constrained by the absence of enabling policies. Key legislative frameworks — most notably the long-delayed renewable energy bill — have yet to materialize, limiting the effectiveness and credibility of these stated ambitions.
Japan
| Energy Price (in USD per liter) | Energy Availability |
| Gasoline: $1.13 per liter, up 7.7 percent since February Diesel: $0.99 per liter, up 12 percent since February | Gasoline: Widely available Diesel: Widely available LPG: Widely available LNG: Widely available |
Impact of Crisis on Energy Supply
Japan remains heavily dependent on the Middle East for crude oil, with approximately 94 percent of imports sourced from countries such as the United Arab Emirates, Saudi Arabia and Kuwait and around 93 percent transiting through the Strait of Hormuz. In contrast, LNG imports are more diversified — primarily sourced from Australia and Malaysia — with Middle Eastern dependence limited to roughly 10 percent.
Amid the effective disruption of Hormuz transit, Japan’s crude imports fell by around 30 percent in March compared to February, reaching the lowest level since comparable data became available in 2013. Concerns are growing that declines may persist into April and beyond. Despite government subsidies keeping retail gasoline prices below JPY 170 ($1.07) per liter, rising import costs have significantly dampened consumer sentiment.
On the industrial side, higher maritime insurance premiums and freight rates are adding to import costs. Downstream sectors are also affected, with declines in gasoline output and petrochemical feedstocks such as naphtha impacting a wide range of industries, including synthetic resins. For the April–June quarter, prices of industrial materials are expected to rise, with roughly two-thirds of key items — including chemicals and aluminum alloys — projected to increase, heightening downside risks to business confidence.
Short-Term Government Responses
The government has strengthened measures on both supply security and price stabilization. Japan maintains petroleum reserves equivalent to approximately eight months of consumption, combining public and private stockpiles. Since mid-March, private reserves have been deployed as an initial response, followed by selective releases from national reserves. The government is reportedly considering an additional release equivalent to around 20 days of consumption, with further releases potentially as early as May.
At the same time, efforts are underway to diversify procurement routes and secure alternative supplies. Prime Minister Sanae Takaichi has emphasized that, by balancing reserve drawdowns with non-Hormuz procurement, Japan has secured sufficient supply beyond the current year, aiming to stabilize public sentiment.
While the government is preparing contingency plans for demand-side measures such as energy conservation, no formal calls for restraint have been issued so far, given concerns over economic impact. Energy authorities are also urging utilities to diversify procurement and strengthen inventories while facilitating smoother fuel procurement. On the pricing side, gasoline subsidies and electricity and gas support measures are being flexibly deployed to mitigate the burden on households and businesses.
Expected Policy Shifts
Japan’s structural vulnerability — stemming from its high dependence on Middle Eastern crude — is likely to accelerate further key policy shifts. These include further nuclear restarts and potential lifetime extensions to secure stable baseload power; expanded deployment of renewables alongside grid and storage enhancements; the diversification of LNG suppliers and expansion of long-term contracts; and
the promotion of decarbonized thermal power through hydrogen, ammonia and carbon capture, utilization and storage.
In particular, the need to secure large-scale, stable, low-carbon power to support the rapid growth in artificial intelligence and data usage is becoming increasingly urgent. This is expected to strengthen momentum toward renewed reliance on nuclear energy. Energy security is also becoming more tightly integrated with industrial policy, driving efforts to reinforce domestic supply chains and secure critical resources. Over the medium to long term, Japan will seek to reduce dependence on specific regions while strengthening energy cooperation across the Indo-Pacific, balancing decarbonization with supply resilience.
Korea
| Energy Price (in USD per liter) | Energy Availability |
| Gasoline: $1.34 per liter, up 17 percent since February Diesel: $1.33 per liter, up 25 percent since February | Gasoline: Widely available Diesel: Widely available LPG: Widely available LNG: Widely available |
Impact of Crisis on Energy Supply
The government raised its crude oil resource security alert from level 2 (caution) to level 3 (alert) April 2 after crude inventories fell by more than 20 percent. Seven Korean vessels carrying 14 million barrels of crude, about one week’s worth of consumption, remain detained in the Strait of Hormuz.
The natural gas crisis alert was also raised from level 1 (interest) to level 2 (caution). However, authorities claim that supply can be managed through the end of 2026 because they quickly secured alternative sources following QatarEnergy’s force majeure.
Naphtha cracking center petrochemical firms have reduced operations or halted production. The government is mobilizing measures to stabilize supply, currently estimated at around 90 percent of normal levels. It has also warned of potential disruptions to urea imports, 34 percent of which come from the Middle East.
Short-Term Government Responses
The government extended the fuel price cap on gasoline, diesel and kerosene for two weeks on April 9. While this has limited retail price increases, refiners note a growing disconnect from global price trends.
Korea has secured around 110 million barrels of crude for April-May via alternative routes outside the Strait of Hormuz, equivalent to about 70 percent of typical import volumes, and has activated a strategic petroleum reserve swap program.
Temporary export restrictions on naphtha were introduced March 27 for five months to stabilize domestic supply. Measures include banning stockpiling, redirecting exports domestically and supporting alternative imports.
The ruling and opposition parties agreed on a KRW 26.2 trillion ($17.1 billion) supplementary budget April 10 to address energy prices, supply chains and household stability. This includes KRW 5 trillion ($3.4 billion) in compensation for refiners’ losses under the fuel price cap and KRW 300 billion ($202.1 million) in contingency fuel subsidies.
Expected Policy Shifts
The crisis is likely to accelerate diversification away from Middle Eastern energy. Refiners are expanding U.S. procurement, and the government is pursuing increased U.S. imports through trade talks and sourcing crude from alternative suppliers and routes. Korea Gas Corporation is also diversifying LNG imports toward Oceania, Canada and the United States.
Korea is increasing reliance on alternative energy, particularly nuclear. Plant utilization will rise from around 70 percent to over 80 percent, with maintenance accelerated to bring reactors back online by early June. The supplementary budget also allocates KRW 500 billion ($336.9 million) to energy transition and renewables, signaling continued expansion.
Malaysia
| Energy Price (in USD per liter) | Energy Availability |
| Gasoline: Unsubsidized: $1.08 per liter, up 71 percent since February Subsidized: $0.50 per liter. No increase since February. Malaysia has reduced individual subsidy allocation from 300 liter to 200 liter. Diesel: $1.69 per liter, up 125 percent since February | Gasoline: Local shortage; particularly affecting petrol stations under the Shell brand in sporadic locations. Diesel: Local shortage, particularly affecting gas petrol stations under the Shell brand in sporadic locations. LPG: Widely available LNG: Widely available |
Impact of Crisis on Energy Supply
The global energy crisis continues to strain Malaysia’s oil, LNG and LPG supply, with cargo delays and regional disruptions driving greater reliance on costlier imports. Tight feedstock availability is transmitting pressure downstream, particularly to petrochemicals and fertilizers, where input costs are rising and production lead times are lengthening.
Concurrently, higher crude benchmarks, alongside elevated refinery premiums, freight and insurance costs, are amplifying domestic fuel price pressures. This complicates subsidy calibration and constrains the extent of cost pass-through to end users.
Energy-intensive sectors, including manufacturing, transport, logistics and food production, remain the most exposed. These industries are contending with margin compression, operational uncertainty and increased earnings volatility.
Short-Term Government Responses
Amid persistent market volatility, the Malaysian government has focused on safeguarding supply continuity and containing domestic price pressures. This includes coordinated emergency procurement with Petronas, strengthened supply chain monitoring and diversification of import sources, particularly from Brazil, Canada and Suriname, as outlined by Prime Minister Anwar Ibrahim.
Targeted fuel subsidies for RON95 petrol and diesel remain central to cushioning households and key industries, complemented by tighter enforcement to reduce leakages and ensure domestic availability. On the demand side, public-sector energy conservation measures have been introduced to ease near-term pressures.
While these interventions have helped moderate immediate price shocks and alleviate cost-of-living strains, their overall effectiveness is increasingly constrained by fiscal limits and the growing burden of subsidy commitments.
Expected Policy Shifts
Over the longer term, the crisis is accelerating a structural recalibration of Malaysia’s energy strategy toward greater diversification, resilience and transition. Policymakers are moving to reduce concentration risk by expanding supply partnerships beyond traditional Gulf sources, which currently account for a significant share of crude imports, while intensifying domestic upstream exploration and production to strengthen energy self-sufficiency.
In parallel, implementation of the National Energy Transition Roadmap is gaining traction. This includes faster deployment of renewables, particularly solar, as well as renewed consideration of nuclear energy as a stable, low-carbon baseload option within the future energy mix.
Importantly, investment priorities are shifting from short-term price intervention toward building systemic resilience. This marks a broader policy transition toward enhancing energy security, advancing decarbonization and reinforcing Malaysia’s long-term strategic autonomy.
Philippines
| Energy Price (in USD per liter) | Energy Availability |
| Gasoline: March 31-April 6, 2026: $1.47-$1.90 per liter March 6-9: $0.90-$1.28 per liter Up 48 percent to 63 percent since early March Diesel: March 31-April 6: $1.95-$2.44 per liter March 6-9: $0.77-$1.11 per liter Up 119 percent to 153 percent since early March | Gasoline: Local shortage Diesel: Local shortage LPG: Local shortage LNG: Widely available |
Impact of Crisis on Energy Supply
The Department of Energy (DOE) continues to assure the public that the Philippines has sufficient fuel inventories averaging over 50 days, giving the country ample time to replenish supplies. While price adjustments are unavoidable due to rising international prices, shipping risks and insurance costs, the DOE is actively coordinating with industry players to ensure continuity of supply, prevent hoarding and cushion the impact on consumers. The DOE added that inventory levels exceed the 15-day minimum inventory requirement, which indicates that the country has significant fuel supply to manage the demand.
Short-Term Government Responses
The DOE has undertaken proactive measures to ensure continuity of supply, along with the Department of Foreign Affairs, to engage with foreign ambassadors and embassies, which have been largely cooperative in resolving supply and shipping concerns. The department has assisted the DOE in identifying alternative sources of energy and has also engaged directly with Iran’s Foreign Ministry, securing assurances from Iran’s foreign minister on the safe, unhindered and expeditious passage of Philippine-flagged vessels and energy shipments.
In supporting the continuity of oil supply, the DOE and the Philippine National Oil Company have confirmed the arrival of 900,000 barrels of diesel in April, sourced through international traders, with deliveries staggered throughout the month.
Moreover, the DOE, together with the Energy Regulatory Commission, suspended certain market mechanisms, including the operations of the Wholesale Electricity Spot Market effective March 26 and implemented the modified administered price, which shifts pricing from market-driven rates to regulated, technology-specific pricing. This is aimed at preventing extreme price volatility, ensuring continued generator operations despite rising fuel costs and maintaining overall grid reliability.
Expected Policy Shifts
The Philippine government, through the Senate and the House of Representatives, has continued to hold hearings on the impact of the global energy crisis and possible government interventions. Among the key areas discussed are legislative and fiscal measures to help mitigate the effects of rising fuel prices and supply risks.
The DOE has reiterated its call for Congress to consider amendments to the Oil Deregulation Law, particularly to allow limited regulatory flexibility during extraordinary circumstances, such as war or severe supply disruptions. Looking ahead, the DOE emphasized the need to establish clear triggers for regulatory intervention, including defined thresholds for fuel inventory levels, price volatility and the declaration of national emergencies.
On the possible suspension of excise taxes on fuel, the Department of Finance and the Department of Economy, Planning and Development clarified that the Development Budget Coordination Committee has already submitted its recommendations to the president, pursuant to the government’s emergency powers to temporarily suspend or adjust fuel excise taxes. The proposed suspension or adjustment of fuel excise taxes would carry a 15‑day effectivity period, with the adjustment potentially taking effect by April 13, subject to presidential issuance.
Singapore
| Energy Price (in USD per liter) | Energy Availability |
| Gasoline: $2.71 per liter, up 20 percent since February Diesel: $3.63 per liter, up 80 percent since February | Gasoline: Widely available Diesel: Widely available LPG: Widely available LNG: Widely available |
Impact of Crisis on Energy Supply
- Singapore’s energy situation remains stable, with no immediate need to draw on fuel reserves or implement rationing measures. At present, Singapore has indicated that it maintains several months’ worth of stockpiles, though the precise figures are not disclosed, and will continue to explore ways to expand these reserves as a buffer against supply disruptions.
- This resilience is underpinned by its position as a leading global oil trading and refining hub, ranked third in oil trading and sixth in refinery exports, which ensures continued access to diversified energy sources. Prior to the conflict, Singapore’s refineries had a combined capacity of about 1.2 million barrels per day, with exports directed to countries like Indonesia, Malaysia and the wider region. In particular, Singapore supplies more than one-quarter of Australia’s refined fuel imports, including about 55 percent of its petrol. Australia, in turn, provides over one-third of Singapore’s LNG needs as well as crude oil for refining operations. Singapore has affirmed that it has no plans to restrict exports.
- Nevertheless, against this backdrop of interdependence, Singapore is taking proactive steps to strengthen its long-term energy security. Australian Prime Minister Anthony Albanese’s toured Jurong Island, the heart of Singapore’s refining and petrochemical operations, during his official visit to Singapore April 10. Subsequently, Singapore and Australia announced plans to develop a legally binding protocol on economic resilience and essential supplies under their free trade agreement. The protocol will cover energy and other critical sectors, underscoring a shared commitment to maintain open trade flows. This will complement Singapore’s existing Agreement on Trade in Essential Supplies with New Zealand, further reinforcing its broader network of trusted supply arrangements. That said, Singapore remains subject to global market pressures. As a price taker in international energy markets, it is expected to face sustained elevated oil prices, which may persist even after hostilities subside due to damage sustained by oil facilities in the Middle East.
Short-Term Government Responses
- To support businesses and households amid these pressures, the Singapore government announced close to SGD1 billion (US$777 million) in additional measures April 7. Key initiatives include increasing the corporate income tax rebate for 2026 from 40 percent to 50 percent. Eligible companies can benefit from a higher cash grant component of SGD 2,000 ($1,600) and a higher benefit cap of SGD 40,000 ($31,400). The Energy Efficiency Grant base tier will be expanded to all sectors and extended to March 31, 2028, with further details to be provided later this year. In addition, the government indicated its readiness to share cost increases for critical public sector contracts where disruptions would have significant public impact, including major infrastructure projects such as the Cross Island MRT Line and public housing developments. Targeted support is also being assessed for firms in the energy and chemicals sector, which have been significantly affected by feedstock supply disruptions, with agencies engaging industry players to determine appropriate measures.
Expected Policy Shifts
The conflict has underscored Singapore’s reliance on energy imports, reinforcing the need to strengthen energy security through the diversification of supply sources. In the near term, Singapore will continue to scale domestic solar deployment and advance regional electricity imports. It is also working to deepen cooperation with its ASEAN partners, including supporting the development of an ASEAN Power Grid to enhance regional energy connectivity. Over the medium to long term, Singapore continues to explore additional energy sources to diversify its fuel mix, including nuclear energy. While no decision has been made, the government is building capabilities through international partnerships. That said, Singapore indicated it will take a cautious approach, positioning itself as a fast adopter rather than a first mover in nuclear adoption, indicating that it will closely monitor technological, safety and regulatory developments before committing to deployment.
Taiwan
| Energy Price (in USD per liter) | Energy Availability |
| Gasoline: $1.02 per liter, up 18.6 percent since February Diesel: $0.98 per liter, up 16.7 percent since February | Gasoline: (Widely available) Diesel: Widely available LPG: Widely available LNG: Widely available (sufficient until May) |
Impact of Crisis on Energy Supply
As of April 4, Taiwan’s energy reserves remain above statutory requirements, with crude oil stocks exceeding 140 days and LNG over 11 days. To bypass the blockade of the Strait of Hormuz, 46 percent of affected crude shipments have been rerouted through the Red Sea, while the remaining 54 percent has been secured via spot purchases from Australia and other regions. Furthermore, state-owned CPC Corporation has secured 2 million barrels of crude from the Persian Gulf; should the channel remain navigable over the next two weeks, this shipment — arriving in May — will provide an additional 15-day supply.
Regarding the more critical LNG supply, 94 percent is currently managed through spot scheduling, primarily from the United States and Australia (accounting for 51 percent combined). While schedules for April and May are finalized, for June, 10 shipments have been secured with five additional cargoes still being pursued. Notably, the Minister of Economic Affairs revealed that an energy minister from a major power has offered assistance, though the specific country remains undisclosed.
For indirect impact, rising petrochemical costs have triggered shortages and price hikes for consumer goods like plastic bags. Although stabilization measures and mixed agricultural price trends have temporarily contained consumer price index and inflation risks, authorities expect spillover effects in April. Industrially, the semiconductor sector remains insulated due to high helium recycling and North American sourcing. In contrast, the petrochemical and specialty chemical sectors face feedstock risks, though niche players retain flexibility through diversified sourcing and strong pricing power.
Short-Term Government Responses
The Executive Yuan has prioritized “market order” through heavy intervention. Electricity rates are frozen for at least six months since April, and CPC Corporation continues to absorb fuel price volatility, despite its debt ratio exceeding 92 percent. To stabilize plastics supply, the government accelerated a naphtha cracker startup and launched a “fair price” program to support material access and distribution. CPC has also secured U.S. crude spot cargoes and rerouted shipments via the Red Sea to maintain reserves. LNG supply is secured through May, with efforts ongoing to procure five additional June cargoes. Meanwhile, inspections aim to deter hoarding, alongside targeted subsidies for medical supplies, fertilizers and agricultural fuel.
Expected Policy Shifts
The crisis has accelerated a pivot in energy policy. Most notably, President Lai Ching-te and Premier Cho Jung-tai signaled that the decommissioned NPP-2 and NPP-3 plants meet restart conditions, declaring that “anti-nuclear sentiment is not a sacred cow.” This policy shift is driven by the power demands of artificial intelligence development, energy security under potential blockades and political pressure from shifting international trends and domestic public opinion. Structurally, Taiwan is also diversifying away from Gulf dependence by strengthening ties with the United States and Australia. CPC recently signed a long-term deal with U.S. LNG company Cheniere Energy, aiming to raise the share of U.S. gas imports to 25 percent by 2029.
Thailand
| Energy Price (in USD per liter) | Energy Availability |
| Gasoline (Gasohol 95/E10): $1.37 per liter, up 24 percent from February 23 Diesel (B7/standard diesel): $1.58 per liter, up 68.8 percent from February 23 | Gasoline: Widely available Diesel: Widely available LPG: $0.48 per liter at gas stations (officially listed price for major suppliers) LPG availability: Widely available; cooking gas prices were frozen through May to limit pass-through to households. LNG: No standard consumer retail per-liter benchmark. LNG is procured mainly through utility and industrial contracts rather than retail pump pricing. LNG availability: Widely available, but at higher cost and with tighter procurement conditions if Middle East disruption persists. Thailand is replacing roughly 5 percent to 10 percent of LNG supply linked to the Middle East and is discussing additional volumes with Malaysia; no major industrial force majeure has been reported. |
Impact of Crisis on Energy Supply
Thailand has not experienced nationwide physical fuel scarcity, but the Iran conflict has sharply raised import costs and exposed the country’s dependence on Middle East crude and LNG. The Energy Ministry said April 9 that Thailand still had 109 days of oil reserves, while crude imports from the Middle East account for 52 percent of total imports. This means the immediate impact is less about outright shortage and more about cost escalation, refinery margin spikes and logistics risk flowing into transport, farming and power costs.
For gas and power, supply has remained operational, but procurement risk has increased. Thailand has been seeking replacement LNG cargoes because roughly two to three LNG vessels per month normally come from the Middle East, and officials estimate about 5 percent to 10 percent of LNG supply may need diversification if disruption continues. To preserve LNG, Thailand has also increased generation from its largest coal plant, indicating stress in fuel choice rather than a collapse in electricity supply. The most exposed sectors are transport, agriculture, aviation, fishing and gas-reliant power generation, with broader cost spillovers into industry through freight and electricity.
Short-Term Government Responses
Bangkok’s response has focused on cushioning prices, reducing demand, and protecting strategic supply. The government ordered civil servants to work from home, restricted overseas official travel, raised office air-conditioning settings and signaled that stronger conservation measures could follow if the crisis worsens. It has also considered earlier petrol-station closures and other demand-management tools.
On price management, the government used emergency powers to cut ex-refinery diesel prices by THB 2 ($0.062) per liter, with an expected retail pass-through of around THB 2.1 ($0.065) per liter. Officials had also been weighing an oil-tax reduction earlier in the crisis, but fiscal space is constrained because the Oil Fund was already in a THB 38 billion ($1.2 billion) deficit in late March. In parallel, Thailand froze cooking-gas prices through May and tightened crude palm-oil export controls to protect biodiesel feedstock and domestic supply. These steps should help slow pass-through, but they do not remove Thailand’s structural exposure to imported fuel and shipping disruption.
This means the government is actively cushioning volatility but not eliminating underlying exposure to imported energy and shipping disruption.
Expected Policy Shifts
The crisis is likely to reinforce three medium-term shifts in Thai energy policy. First, Thailand is moving toward greater supply diversification, especially for LNG, with officials already citing the United States, Australia, South Africa and Malaysia as alternative sources. This suggests a stronger policy preference for avoiding concentrated Gulf exposure, even if Middle East supply remains part of the mix.
Second, the shock strengthens the case for domestic substitutes such as biodiesel and for keeping domestic gas production strategically relevant. The government has explicitly linked the crisis response to higher biofuel use and energy-security measures, while the broader regional trend shows utilities shifting toward coal and other domestic or contract-secured fuels when LNG becomes too volatile.
Third, the government’s April 9 policy statement suggests the crisis will be absorbed into a broader reform agenda rather than treated as a temporary emergency only. Bangkok signaled continued consumer subsidies, electricity-market opening, green financing, carbon-credit infrastructure and support for clean-energy generation. In practice, this points to a dual-track strategy: stronger short-term energy security tools alongside a longer-term push for diversification, cleaner domestic generation and reduced exposure to imported oil.
Vietnam
| Energy Price (in USD per liter) | Energy Availability |
| Gasoline: $0.89 per liter, up 16.8 percent since February Diesel: $1.25 per liter, up 71 percent since February (April 10, 2026, compared to February 26, 2026) | Gasoline: Moderately available Diesel: Industries face tightened supply LPG: Industries face tightened supply LNG: Industries face tightened supply |
Impact of Crisis on Energy Supply
The crisis has tightened the supply of imported crude oil for Vietnam’s two biggest operational refineries, Nghi Son and Dung Quat, which serve about 70 percent of the country’s petroleum demand. Both refineries have confirmed that they can secure sufficient feedstock to operate at full capacity by the end of May. Nghi Son has been more severely affected, because it was initially designed solely for Kuwaiti crude under a long-term contract. However, it will start importing non-Kuwait sources starting in June. That same month, Dung Quat plans to increase its use of domestic crude oil to meet about 90 percent of its capacity. Further negotiations for alternative sources from West Africa, the Mediterranean and the United States are ongoing.
No physical imported coal shortage has been reported because most of the main importers are based outside of the Middle East, including Australia, Russia and Indonesia. Similarly, most of the LNG imports are sourced from Malaysia (43 percent), the United States (17 percent) and Brunei (16 percent), with the only exception being Saudi Arabia (10 percent). Nevertheless, import prices have increased because contracts are tied to global market prices. It is therefore expected that retail electricity prices may be further adjusted to reflect higher operational costs for baseload sources, including coal and LNG-fired power plants.
LPG supply constraints have also led to higher domestic prices. Since March, gas prices were adjusted several times, with a cumulative increase of $7.4 per 12-kilogram LPG gas cylinders.
Short-Term Government Responses
To tackle the impact from supply disruption due to the conflict, the government has combined a series of fiscal and administrative measures. The aim is to balance supply and demand, avoid price shocks and strengthen long-term energy conservation and diversification.
The government has implemented the following short-term measures to stabilize the petroleum market:
- Approved advance payments from the state budget to the Fuel Price Stabilization Fund.
- Completely waived most-favored-nation import tariff; the environmental tax for gasoline (excluding ethanol), diesel and jet fuel products; and the special consumption tax for gasoline. This will be in effect until April 15, then government will consider an extension until June 30.
- Accelerated ethanol production and import for the early E10 biofuel rollout from April instead of June.
- Approved in principle the prioritization of crude production for domestic demand.
- Directed the urgent construction of national strategic reserves alongside Nghi Son, Dung Quat and Long Son refineries to increase the national reserve capacity to 90 days of net import, from the current 20-30 days.
The government has called for the following measures to stabilize the electricity market under Directive 09/CT-TTg and Directive 10/CT-TTg:
- The further adoption of energy efficiency and saving measures to reduce electricity consumption to 30 percent for public lighting and 50 percent for billboard and decorative lighting.
- The adoption of battery energy storage systems to support grid balancing, while encouraging the self-production and use of rooftop solar and wind energy.
Besides domestic measures, the government has also used energy diplomacy to help businesses secure alternative LNG, LPG and oil contracts from countries outside of Middle East, including Russia, the United States, Australia, Japan and Korea while seeking supply assurance for existing contracts with Qatar, Angola and the United Arab Emirates.
Expected Policy Shifts
The conflict is unlikely to cause major shifts in Vietnam’s long-term energy policy, but it may push the government to actively resolve many policy bottlenecks in the sector to enhance supply security.
In the long term, the government is expected to accelerate the development of nuclear power and renewable energy, combined with storage solutions, to reduce reliance on import fuels while maintaining stable supply. LNG continues to play an important role in the power mix and in many ongoing projects, making solid progress despite the current market turbulence.
The conflict will also prompt the government to reconsider its national petroleum reserve strategy to better respond to external shocks.
