Asia Faces Energy Crisis: Fuel Rationing and Rising Costs Amid Middle East Conflict

Across Asia, nations heavily reliant on Middle Eastern oil are scrambling to mitigate the impact of soaring energy costs triggered by the ongoing conflict in the Middle East. Governments are implementing emergency measures, including fuel rationing, reduced energy consumption initiatives, and financial assistance programs, to shield citizens from the economic fallout.

Rising Fuel Prices and Supply Disruptions

The current crisis represents the largest supply disruption in the history of the global oil market, according to the International Energy Agency. Asia, which imports approximately 60 percent of its oil from the Middle East [1], is particularly vulnerable, especially as a significant portion of these imports transit through the Strait of Hormuz.

Government Responses Across Southeast Asia

Several Southeast Asian countries are taking immediate steps to address the energy crunch:

• Thailand: The government has urged citizens to reduce air conditioning usage to conserve energy, with news anchors even ditching jackets on air [1].
• Philippines: The Philippines has initiated emergency powers and is providing cash handouts for drivers of public transport vehicles. Government agencies have been instructed to cut electricity and fuel use by 10 to 20 percent [1]. The country depends on the Gulf for 90% of its oil requirements [1].
• Vietnam: Officials are encouraging employers to allow staff to work from home [1].

Broader Asian Impacts

The crisis extends beyond Southeast Asia. In India, rising cooking gas prices are impacting small businesses like tea stalls, with owners fearing reduced profits [3]. Domestic LPG prices have increased significantly, pushing rates to their highest level in over two years [3]. Hoarding of LPG and a return to firewood use are likewise being reported [3].

Shift Towards Electric Vehicles

The escalating oil prices are accelerating the transition towards electric vehicles (EVs) in Southeast Asia. Indonesia, leveraging its substantial nickel reserves, is emerging as a central hub in the global EV supply chain. Battery-electric vehicle (BEV) sales in Indonesia surged from just 5 units in 2020 to over 103,000 by 2025 [2]. Sales of traditional internal combustion engine (ICE) vehicles have declined by nearly 20 percent between 2024 and 2025, while BEV sales have increased by 138.8 percent during the same period [2].

Looking Ahead

The energy crisis underscores the vulnerability of Asian economies to geopolitical instability in the Middle East. The long-term implications include a continued push for energy diversification, increased investment in renewable energy sources, and a faster adoption of electric vehicles. The situation remains fluid, and governments will need to adapt their strategies as the crisis evolves.