What the Hormuz shutdown means for Asean’s energy security, renewables: 10 things to know

Manila: The effective closure of the Strait of Hormuz on February 28, 2026 disrupted passage for roughly a quarter of the world’s daily seaborne oil.

To this day, uncertainty remains and the global fuel crunch continues to raise fears of a deeper supply shock.

Uncertainty over freedom on navigation through the narrow waterway underscores how central Hormuz is to global trade, since even brief disruptions can send oil prices higher and roil shipping routes.

It also highlighted the wider stakes of the conflict, with most countries seeking to keep the corridor open, which Iran has so far rejected.

After failed talks on April 12, US President Donald Trump announced a US naval blockade and warned vessels against paying Iranian tolls.

Here's the effect of the conflict so far on the 11-member Asean bloc.

Asean economies, depend on open sea lanes and imported fuel. A shock at Hormuz quickly feeds into pump prices, power costs and inflation from Manila to Bangkok.

As of late 2025, Asean (Association of Southeast Asian Nations) has 11 member states, with a combined total population of over 700 million people.

Here is the list of the 11 Asean member states:

The region is the world’s third most populous and features diverse economies, with Indonesia having the highest population

TRENDS Research stated that the Asean economy is facing a significant economic "crunch" due to the ongoing US-Iran conflict.

So far, the conflict has resulted in a major energy shock, with Brent crude prices spiking and disruptions in Hormuz threatening 20% of global oil and up to 30% of liquefied natural gas (LNG) supplies. 

The impact is heavily affecting Asean because the region is a net importer of fuel and heavily dependent on the Middle East for energy supplies. 

Philippines: Imports all its crude; about 98% from the Middle East. Petrol prices have surged 76%, diesel near historic highs.

Vietnam: Imports about half its crude; 88% from the Middle East. Prices up roughly 19% despite tax relief.

Thailand, Indonesia, Malaysia: Somewhat cushioned by diversification and domestic output, but using fiscal measures to soften the blow.

Refining and export controls are tightening. Thailand, a refining hub, has begun export restrictions. Countries with little refining capacity — including the Philippines, Cambodia, Laos and Myanmar — are more vulnerable to shortages and price spikes.

Somewhat. Asean draws on Australian LNG and intra-regional suppliers. But Middle Eastern gas still matters, and the halt of Qatari LNG output has added strain. Singapore, where gas made up 93.1% of the fuel mix in 2025, is seeing rising energy bills and contract pressure.

Not immediately. As Ravi Menon noted on April 6, renewables are a long-term answer to fossil vulnerability.

Hydropower and solar are already cost-competitive in parts of Asean, and the bloc targets 45% renewable capacity by 2030. But renewables do not directly replace oil in transport, shipping, aviation or petrochemicals.

Research from the Asia Competitiveness Institute shows:

Hydropower is the cheapest in East Malaysia, Indonesia and Vietnam, as well as the Philippines.

Solar PV is close behind in Indonesia, Cambodia and Vietnam.

Wind remains costlier, though subsidies and scale could reduce costs.

Yes. Solar panels, batteries and critical minerals are heavily concentrated in China’s supply chains.

Shifting away from Middle Eastern oil could deepen reliance on Chinese clean-energy manufacturing.

Interest in nuclear power introduces other supplier ties — to Russia, China, South Korea, France or the US.

Asean’s energy system is vulnerable to single chokepoints and uneven refining capacity. Regional power grid interconnection — key for sharing renewable electricity — still lacks the trust and harmonisation needed to work at scale.

Energy security must mean diversification across fuels, technologies and suppliers, plus stronger regional coordination.

That includes:

Europe can be a good model for the Asean. While the EU does not have a single, centralised strategic petroleum reserve (like the US Strategic Petroleum Reserve), the continent operates under a coordinated framework where individual member states are responsible for maintaining their own national reserves, as per Science Direct.

European strategic oil reserves include:

Renewables are indispensable to Asean’s energy transition, but they cannot carry the burden alone.

The region still needs a broader mix of fuels, stronger interconnections, and clearer crisis-response rules to cushion the shock when wars, shipping disruptions, or supply squeezes ripple through global markets.

That is why diversification matters as much as decarbonisation.

Solar, wind, hydro, paired with batteries and other clean sources can lower exposure over time, but they do not yet provide the backup capacity, storage depth or dispatchable power needed when demand spikes or imports are interrupted.

Long-duration energy storage (such as pumped-storage hydropower) could significantly help boost energy security.

More important, regional coordination is of significant strategic value, because Asean’s energy security is only as strong as its weakest supply line.

Asean cannot afford to treat the energy transition as a one-fuel strategy.

The bloc should keep accelerating renewables, but it must also strengthen grids, expand reserves and align emergency rules across borders.

Otherwise, the next geopolitical shock will again expose how fragile the region’s power system remains.

Without diversification and regional rules for crisis response, Asean’s energy future remains exposed to the next geopolitical shock.