Article: The Guardian
The ongoing war involving Iran has triggered a major energy crisis across Asia, the world’s largest oil-importing region. The conflict has severely disrupted shipping through the Strait of Hormuz, a crucial maritime chokepoint through which a large share of global oil and liquefied natural gas is transported. With tanker traffic reduced and energy exports disrupted, oil markets have become highly volatile and governments across Asia are scrambling to prevent shortages.
According to the report, several countries have already introduced emergency policies to conserve fuel and stabilize prices. South Korea has capped fuel prices, Thailand has implemented consumer subsidies, and Bangladesh and Myanmar have begun rationing fuel supplies. Other governments, including Vietnam and the Philippines, are encouraging work-from-home policies and energy-saving measures to reduce consumption. Larger economies such as China, Japan, and India have strategic reserves and more diversified energy sources, which provide some protection from immediate shortages.
However, analysts warn that if the disruption continues, the region could face deeper economic consequences. A prolonged shutdown of Gulf energy exports could exhaust reserves, drive up prices, and potentially trigger wider economic instability across Asia and global energy markets.
Despite countries in East Asia and Oceania not being at war, they are still economically affected. Asian markets are the most affected by the closure, as most oil and LNG are destined for Asia. This thereby puts greater pressure on the U.S and Israel to enact military operations in Iran to reopen the Strait as soon as possible, as their allies feel the pressure of high oil prices. The high prices caused by a war started by the U.S and Israel could weaken ties, especially for states not threatened by Iranian influence. The global price of oil is nearing $100 a gallon, but in Thailand, they spend tens of millions of dollars a day to keep prices artificially low. The question, therefore, becomes, if the war does not end soon, how long can prices stay artificially low?
East Asian states have already taken action to preserve their oil supply. For instance, Bangladesh started rationing fuel sales last week and closed all its universities. The situation has become so serious that Bangladesh will likely continue to deploy military at oil depots and police at fuel stations. Myanmar’s solution is even more atypical. Drivers with even-numbered plates can drive on even dates, and drivers with odd-numbered plates can drive on odd dates. As oil currently appears poised for further gains, east asian nations will likely take further measures to conserve their oil supply. For instance, canceling events, shortening school or work weeks, and restricting vehicles that don’t meet certain standards.
In International relations, we have discussed geopolitics and strategic geography. The Strait of Hormuz is a desirable waterway as millions of barrels per day are transported through it. Iran borders the Strait and uses it as a chokepoint. By closing the Strait, we discussed how they gain significant leverage on the U.S., as oil prices are priced globally.