Global Energy Crisis Intensifies Amid Iran Conflict, Prompting Policy Responses Across Asia
The global energy crisis is deepening following the closure of the Strait of Hormuz, a key shipping route responsible for transporting around 20 per cent of the world’s daily oil supply. The disruption, which began on Saturday (28 February), has significantly affected global energy markets and driven oil prices upwards.
Rising tensions linked to the US-Israel war on Iran have pushed Brent crude prices above USD 110 per barrel, raising concerns about supply shortages and economic stability worldwide. The situation has prompted governments across Asia and beyond to introduce emergency measures aimed at reducing fuel consumption and maintaining energy security.
Fuel Restrictions, WFH Policies, and Emergency Measures
Countries across Asia are responding swiftly to the ongoing energy crisis, implementing a mix of fuel restrictions, remote working policies, and subsidy adjustments to mitigate the impact of rising energy prices.
In the Philippines, President Ferdinand Marcos Jr. declared a national energy emergency on Tuesday (24 March), citing risks to fuel supply and energy stability.
“A national energy emergency is hereby declared in light of the ongoing conflict in the Middle East and the dangers it poses to the availability and stability of the country’s energy supply,” reads the executive order released Tuesday night, as quoted by AFP.
The declaration enables the government to secure fuel contracts through advance payments and deploy an emergency fund of 20 billion pesos (approximately Rp5.61 trillion or US$333 million). The fund will be used to purchase up to two million barrels of fuel, including refined petroleum products and liquefied petroleum gas (LPG).
To conserve energy, the Philippine government has also suspended certain aircraft operations and shifted electricity production from gas to coal. The country is planning to increase coal imports from Indonesia, having already imported around 38 million tonnes last year.
Myanmar, Singapore, and Malaysia Adjust Consumption and Pricing
Myanmar is introducing a digital rationing system for fuel purchases, using barcode and QR code technology to regulate how much fuel individuals can buy. The nationwide policy is expected to take effect in the coming weeks.
Singapore is preparing for a potential increase in electricity tariffs of up to 11 per cent. Authorities are urging households and businesses to conserve energy while providing enhanced financial support for eligible residents.
Malaysia is reviewing the implementation of work-from-home (WFH) arrangements within the public sector to reduce fuel consumption. At the same time, the government is increasing subsidies for RON 95 petrol and diesel to cushion the impact of rising prices.
Prime Minister Anwar Ibrahim noted a sharp rise in subsidy costs. Fuel subsidies increased from RM700 million to RM3.2 billion within a short period.
Meanwhile, RON 97 petrol prices rose to 4.55 ringgit per litre, while diesel prices reached 4.72 ringgit per litre in Peninsular Malaysia.
Thailand, Vietnam, and Cambodia Encourage Energy Efficiency
Thailand has moved away from fuel price caps, allowing domestic prices to fluctuate according to market conditions. Authorities are also encouraging civil servants to work remotely and set the air conditioning at 26°C in government offices.
Vietnam is accelerating its transition to renewable energy, with plans to adopt E10 biofuel nationwide by April 2026. The government aims to reduce fossil fuel consumption by 10 per cent and is encouraging remote working and reduced use of private vehicles.
Cambodia is facing fuel shortages, with around one-third of petrol stations reportedly closed. The government has increased fuel imports from Singapore and Malaysia to stabilise supply.
Indonesia’s Position in the Energy Crisis
Indonesia has not declared an energy emergency but is preparing precautionary measures. Finance Minister Purbaya Yudhi Sadewa confirmed that a work-from-home policy has been approved in principle and is awaiting an official announcement.
The policy is expected to be formally introduced by the Coordinating Minister for Economic Affairs as part of broader efforts to reduce fuel consumption and maintain economic stability.
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Asia-Pacific and Western Countries Take Preventive Action
Beyond Southeast Asia, several countries are implementing measures to secure energy supply amid the ongoing Iran war and global uncertainty.
China has instructed major refineries to suspend exports of diesel and petrol, while Japan has cancelled fuel exports for March and requested increased liquefied natural gas (LNG) supply from Australia.
South Korea has increased reliance on coal-fired and nuclear power, raising nuclear plant utilisation to 80 per cent and considering additional support for vulnerable households.
Australia has temporarily lowered diesel quality standards to boost domestic supply, particularly for regional communities and essential industries.
In the United Kingdom, authorities are preparing contingency plans, including possible fuel rationing and reduced motorway speed limits, to manage consumption.
The European Union is also considering temporary measures such as electricity tax reductions and government subsidies to ease pressure on households and businesses.
Bangladesh Faces Severe Fuel Shortages
Bangladesh is experiencing acute fuel shortages, with long queues forming at petrol stations and supplies struggling to meet demand.
The situation has led to widespread frustration among residents and increased pressure on workers, with concerns also raised about safety and distribution inefficiencies.
The association criticised the government’s response, “This situation reflects extreme mismanagement and irresponsibility.”
Outlook: Energy Markets Under Pressure
The closure of the Strait of Hormuz highlights the fragility of global energy supply chains. As tensions linked to the US-Israel war on Iran continue, the risk of prolonged disruption remains high.
Energy analysts, including International Energy Agency (IEA) Executive Director Fatih Birol, have previously warned that geopolitical conflicts could trigger severe supply shocks and destabilise global energy markets.
With countries adopting emergency policies and adjusting consumption patterns, the current energy crisis underscores the urgency of diversifying energy sources and strengthening resilience against future disruptions.
People Also Ask (PAA)
1. What is causing the current global energy crisis?
The crisis is largely driven by geopolitical tensions in the Middle East, particularly involving Iran. The blockade affecting key routes such as the Strait of Hormuz has disrupted global oil flows, leading to supply constraints, price hikes, and volatility in crude oil markets.
2. Why is the Strait of Hormuz important?
It is a critical shipping route through which around 20 per cent of the world’s daily crude oil supply is transported. Any blockade or disruption in this passage directly impacts global oil distribution and energy markets.
3. How are countries responding to the energy crisis?
Governments are implementing measures such as fuel rationing, subsidies, and remote working policies to reduce energy demand. Many are also increasing the use of coal and renewable sources to support power plants and maintain stable electricity supply.
4. Is Indonesia affected by the energy crisis?
Indonesia has not declared an emergency but is preparing mitigation measures. These include a potential work-from-home policy and strategies to reduce energy consumption, while ensuring fuel supply for domestic power plants remains stable.
5. Will fuel prices continue to rise?
Fuel prices are expected to remain volatile due to ongoing supply disruptions and rising global energy demand. Continued uncertainty surrounding the Iran conflict and global oil supply may lead to further price hikes in the near term.
Cover: Photo by Gustavo Fring/Pexels
