The attack on Iran by the US and Israel and the responses by Iran have resulted in the largest disruption of energy flow in modern history. In particular, the de facto closure of the Strait of Hormuz disrupted 34% of global crude oil trade flow and 19% of the global LNG trade flow. This is truly a global energy crisis.
While the crisis is global, Asia has been hit much more severely than other parts of the world. Asia depends on uninterrupted passage through the Strait of Hormuz for its energy supply much more than other regions such as Europe. Japan’s reliance on Middle East crude oil was 94% before the attack. The dependence of the Philippines, Vietnam, Thailand and South Korea was 96%, 87%, 74% and 69%, respectively.
Richer Asian economies have deeper petroleum reserves and can afford to secure emergency LNG supplies – while developing countries are left exposed.
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To make matters worse, the reserve level of the countries in South-East Asia has been very modest. Japan and South Korea have a high level of SPR (strategic petroleum reserve) managed by their governments, but many countries in the region still lack such systems.
LNG has been very important for Asia as it lacks the pipeline connection that supported Europe prior to Russia’s invasion of Ukraine. Furthermore, Asia is more dependent on LNG coming through the Strait: Its dependence on this route was 27% in 2025, compared with 7% for Europe. The reserve level of LNG is generally limited to a few weeks due to the difficulty caused by boil-off losses during storage, as well as the lack of underground gas storage capacity compared to Europe, which can make a crisis of LNG supply more serious.
So energy supply vulnerabilities have been exposed dramatically in Asia. This is why we may see this year’s events particularly as the “Asian energy crisis”.
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To make matters worse, the reserve level of the countries in South-East Asia has been very modest. Japan and South Korea have a high level of SPR (strategic petroleum reserve) managed by their governments, but many countries in the region still lack such systems.
LNG has been very important for Asia as it lacks the pipeline connection that supported Europe prior to Russia’s invasion of Ukraine. Furthermore, Asia is more dependent on LNG coming through the Strait: Its dependence on this route was 27% in 2025, compared with 7% for Europe. The reserve level of LNG is generally limited to a few weeks due to the difficulty caused by boil-off losses during storage, as well as the lack of underground gas storage capacity compared to Europe, which can make a crisis of LNG supply more serious.
So energy supply vulnerabilities have been exposed dramatically in Asia. This is why we may see this year’s events particularly as the “Asian energy crisis”.
Why developing Asia has been hit more severely
Within Asia, the impact from the crisis varies. While Singapore and Taiwan are heavily dependent on Middle Eastern LNG, they have been procuring LNG from the spot market at premium prices. The richer economies can pay their way out of the crisis.
On the other hand, developing economies such as Pakistan and Bangladesh, heavily dependent on LNG from the Middle East, have difficulty in replacing the lost volumes from the LNG spot market as the price is too high for them. Pakistan introduced an additional two-week holiday for schools as well as planned power outages. Other developing economies in Asia, such as Sri Lanka, Laos and Cambodia, have been facing difficulties securing gasoline and diesel fuel. Sri Lanka has turned Wednesday into a holiday. The Asian energy crisis is hitting the people in developing Asia much more than the other, richer regions.