BANGKOK (AP) — Global energy trade is in turmoil. War around the Persian Gulf Transportation of oil and natural gas is disrupted, causing prices to soar.
Asia is most at risk because it relies heavily on imported fuel, much of which is transported through the Strait of Hormuz, a narrow shipping corridor. 1/5 of world trade Found in crude oil and liquefied natural gas (LNG).
About 13 million barrels of oil per day passed through the corridor in 2025, according to energy consultancy Kpler. This represents about one-third of offshore crude oil, which is unrefined petroleum that is processed into fuels such as gasoline and diesel.
About one-fifth of the world’s LNG, natural gas that has been cooled to a liquid form to make it easier to store and transport, flows through the strait. More than 80% of LNG shipped through the strait in 2024 went to Asia, according to the U.S. Energy Information Administration.
Since then, iran war Oil prices rose 15% to about $84 a barrel, the highest level since July 2024.
US President Donald Trump said on Tuesday that the US would provide risk insurance to shippers and could deploy the Navy to protect ships if necessary. However, the chaos is spreading beyond the region. Tight supplies mean richer countries compete for scarce goods more than poorer ones, leaving more vulnerable economies running out of fuel. This has been seen during past energy shocks caused by causes such as: Russia will invade Ukraine in 2022.
“This crisis, with recent developments including the closure of the Strait of Hormuz, will not only increase oil and gas prices, but also halt global economic activity,” Zulfiqar Yurnadi said. Association of Southeast Asian Nations energy center.
China and India could face major risks
For Asia’s two most populous countries, their huge size increases the risks.
China is the world’s largest importer of crude oil, and India is the third largest importer. If oil prices continue to rise, they will have ripple effects on the broader economy, putting strain on transport, industry and household budgets.
China is the largest buyer of Iranian oil, but the Chinese government prioritizes energy security and has alternatives, including major oil companies. Use of renewable energy. According to Kupler, it imported about 1.4 million barrels per day from Iran last year, or about 13% of its total seaborne oil imports.
Most of these cargoes are already at sea, and Kpler estimates they will be able to cover demand for another four to five months. China also has significant strategic oil reserves, but the exact amounts are a state secret.
You can buy more from Russia. Independent Chinese refiners, known in the industry as “teapots,” are major buyers of crude oil from Iran, Russia and Venezuela, often at steep discounts because of the risks associated with Western sanctions. Despite war-related disruptions, global supplies are generally sufficient.
“Therefore, China is unlikely to have difficulty procuring enough crude oil to power its economy or meet domestic demand,” said Muyu Xu, senior oil analyst at Kpler. “The real question is, what’s the price?”
India may resume purchasing Russian crude oil Despite pressure from President Trump.
The oil reserves are enough for less than a month. Vibhuti Garg, an energy analyst at the Institute of Energy Economics and Financial Analysis (IEEFA) in Delhi, said the next two weeks are critical and if the conflict drags on, the situation could deteriorate rapidly, causing fuel costs to rise and inflation to rise.
“It’s a very volatile situation,” Garg said.
The main risk is rising prices for fresh produce, which is susceptible to supply shocks. At the same time, the economy may slow due to a weaker rupee and higher borrowing costs, it said.
Japan, South Korea and Taiwan are the most exposed
Few regions are more exposed to the disruption of energy flows in the Middle East than East Asia.
According to the Ministry of Economy, Trade and Industry, Japan imported 2.34 million barrels of crude oil per day in January, about 95% of the month’s total imports. Japan is often ranked as the world’s second-largest LNG importer.
South Korea relies almost entirely on imports for energy. According to the Korea International Trade Association, the country procures about 70% of its crude oil and 20% of its LNG from the Middle East.
Taiwan also imports almost all of its LNG. Although it is trying to reduce its dependence on the Middle East, it still sources about a third of its products from Qatar. LNG production stopped After the attack on the facility.
Japan and South Korea have large energy supply reserves. Meanwhile, Taiwan announced in March that it had enough supplies and had future contingency plans.
But analysts say the reserves are a temporary buffer, and energy-intensive industries such as Taiwan’s semiconductor industryremains vulnerable.
IEEFA’s Grant Hauber said governments were in “hope for the best and prepare for the worst” mode, warning that some may regret not diversifying sooner into renewable energy, a “natural hedge” against disruption.
Fossil fuels dominate the energy mix in all three East Asian economies. According to the International Energy Agency, renewable energy supplies less than 10% of electricity in South Korea and Taiwan, and about 22% in Japan.
Southeast Asia
Measures to address energy issues
Energy-hungry developing countries in Southeast Asia face the risk of being outbid on price by richer countries as supplies tighten.
In Singapore, authorities have warned businesses and households to prepare for soaring utility bills.
In Manila, authorities have banned non-essential travel and personal use of official vehicles in a bid to reduce fuel use.
In Thailand, authorities are urging people to save energy as motorists queue up at gas stations as prices soar.
Full-time delivery workers and drivers are essential to keeping goods and people moving in Thailand’s crowded urban centers and depend on fuel to make a living. Somit Sutar, 64, a taxi driver in the northern city of Chiang Rai, said he didn’t know how to continue working while saving fuel.
“Gasoline was already expensive, and this war is going to make the problem even worse,” Starr said.
The government has suspended oil exports to boost domestic reserves, but says it could last up to 61 days while it ramps up natural gas production from the Gulf of Thailand and Myanmar.
Thailand is heavily dependent on spot market LNG and is “highly exposed to price and geopolitical fluctuations,” said Amy Kong of the Brussels-registered research group Zero Carbon Analytics. That leaves it vulnerable to bidding wars with wealthier countries.
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Gosar reported from Hanoi, Vietnam. Associated Press Business Writer Jang Ho Him in Hong Kong contributed to this report.
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