Global Energy Markets Brace for Disruption as Hormuz Conflict Intensifies
A widening energy shock triggered by escalating conflict in and around the Strait of Hormuz is forcing nations across Asia and beyond into emergency mode, prompting a return to coal, strict fuel controls, and rationing measures. What began as a supply disruption is now impacting daily life, from power outages to transportation limitations.
Strait of Hormuz: A Critical Chokepoint
Disruptions through the Strait of Hormuz, a vital artery for global oil and gas shipments, have squeezed Liquefied Natural Gas (LNG) supplies and compelled countries to increase their reliance on coal to bridge the gap Chatham House. The effective blockade of the strait during the US-Israeli war with Iran has increased the chance of accidents and forced ships into alternative routes with their own risks.
Asian Nations Respond to Energy Crisis
India
India is increasing coal consumption to meet peak summer demand, while simultaneously deploying naval task forces to monitor and safeguard commercial shipping routes through the region The Statesman. Two Indian-flagged liquefied petroleum gas (LPG) carriers, Jag Vasant and Pine Gas, have successfully transited the Strait of Hormuz, offering reassurance over energy supply continuity.
South Korea
South Korea has relaxed limits on coal-based power generation in response to tightening LNG supplies.
China
China, the world’s largest consumer and producer of coal, has ramped up coal capacity in recent years to bolster energy security and continues to rely on it despite expanding clean energy initiatives.
Southeast Asia
Indonesia is prioritizing domestic coal use over exports, tightening regional availability. Thailand, the Philippines, and Vietnam are also leaning more heavily on coal-fired generation to manage shortages.
Demand Control Measures Implemented Globally
Pakistan
- Schools and colleges have been closed for two weeks.
- A four-day working week with 50% work from home has been implemented for government staff.
- Fuel allocations to departments have been halved, and non-essential vehicles have been taken off the roads.
Sri Lanka
- Midweek public holidays have been declared for schools, universities, and non-essential workers.
- A QR-based National Fuel Pass has been reintroduced, with strict weekly fuel caps.
Bangladesh
- Universities, foreign curriculum schools, and coaching centers have moved to online instruction.
- Fuel rationing has been in place since March 8th.
- Five-hour rolling blackouts and the shutdown of most fertilizer plants due to gas shortages are being experienced.
Bhutan
- A ban on fuel sales in jerry cans has been implemented to prevent hoarding.
- Work from home arrangements are active, with priority supply allocated to emergency services.
Philippines
- A four-day work week has been implemented for government staff.
- The private sector is being urged to shift to remote work.
- Non-essential official travel has been banned.
Vietnam
- Businesses are being advised to adopt work from home policies.
- There is a push for increased use of public transport, cycling, and carpooling.
Myanmar
- An odd-even vehicle scheme has been implemented to reduce fuel consumption.
Cambodia
Approximately one-third of petrol stations were shut by mid-March.
Laos
- Remote work has been implemented for civil servants.
- Rotational shifts are being used to reduce commuting.
Beyond Asia: A Global Crisis
South Africa
“Controlled allocation measures” have been adopted as diesel shortages impact several provinces.
Egypt
- Malls, restaurants, and government offices are closing early.
- Illuminated billboards are being switched off.
Kenya
- Fuel rationing is being enforced, and exports have effectively been halted.
Modern Zealand
- Air New Zealand has canceled over 1,000 flights due to rising jet fuel costs.
- The government is considering reviving a ‘car-less day’ policy.
Slovakia and Slovenia
- Fuel quotas and rationing limits have been imposed to maintain supply.
Fragile Balance and Future Outlook
Even as some shipments continue to navigate disrupted routes, supplies are being diverted to critical sectors like fertilizers instead of power generation. The current crisis underscores Asia’s dependence on imported energy and the speed with which disruptions can ripple through economies and daily life. The US-Israel-Iran war has triggered energy shocks and trade disruption, placing India at a strategic crossroads as oil routes, exports, markets, and diplomacy face mounting uncertainty Economic Times. The situation remains volatile, and continued monitoring of geopolitical developments is crucial.
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