Southeast Asia continues to be at the receiving end of supply chain and energy volatility. While it reacts faster to energy disruption, it has not developed the collective capacity needed to withstand a prolonged disruption and uncertainty.
Since the first escalation in West Asia, Southeast Asian governments have scrambled to secure alternative fallback options with price controls, fuel conservation moves and efforts to protect vulnerable industries. ASEAN convened special measures including ministerial discussions and monitoring mechanisms but efficacy and synergy have been limited. The 59th ASEAN Foreign Ministers’ Meeting (59th AMM), held in Manila on 21 July tried to deepen regional cohesiveness and understanding to be more resilient in facing these upheavals but rooted structural gaps remain barriers, especially regarding power structures and geopolitical realities.
ASEAN still lacks the strong political will and capacity needed to face headwinds as a regional strategic bulwark, lacking a strategic petroleum reserve, automatic burden-sharing arrangement, or enforceable system for allocating scarce supplies. The ASEAN Framework Agreement on Petroleum Security (APSA), modernises regional crisis coordination, but it remains voluntary. It lacks the capacity to compel an energy-surplus member to release oil to a neighbour in times of need.
The region has spoken collectively for an end to hostilities and the restoration of freedom of navigation practices but when actual supplies are threatened, the fallback will still be on national stockpiles, bilateral contracts and separate deals with external powers.
Reaction has been faster and conventional, but without coherent efficacy or direct results.
A strategic vulnerability, not a temporary disruption
More than 20 million barrels of oil passed through the Straits of Hormuz each day, which is one-fifth of global petroleum consumption. Approximately 80 percent of the oil and petroleum products crossing the strait are meant for Asian markets.
Southeast Asia is especially exposed, where the International Energy Agency estimates that the Middle East supplies about 60 per cent of the region’s crude-oil imports, and almost half of the petroleum products refined or consumed in Southeast Asia originate from Middle Eastern crude.
The implications will therefore extend far beyond petrol stations, adding inflation and strains across the entire spectrum. Higher import bills naturally weaken currencies and widen trade deficits, while subsidies allocated to minimise the impact will also transfer the shock from consumers to government budgets.
ASEAN anticipated the danger politically but did not prepare for it operationally.
Resilience will remain highly uneven
The regional response has been divided, leaning towards established external partners, and also influenced by domestic refining and storage capacity, fiscal space to subsidise prices, and the competence of national institutions.
Singapore’s advantages include extensive storage and refining infrastructure, centralised gas procurement, and strategic reserves, and it has indicated that its LNG and diesel stocks could last for months. Yet it remains exposed to international prices, shipping-insurance premiums and LNG interruptions.
Malaysia and Brunei possess stronger physical buffers due to domestic oil and gas production but immunity is not guaranteed. Malaysia has been a net crude-oil importer since 2022, while almost 70 per cent of its crude imports in 2025 originated from countries that will need to use the Hormuz. Fuel subsidies have also created a parallel dilemma in both preventing strains on the people and preserving the national budget.
Indonesia has relatively greater strategic room than other smaller economies because of its domestic production, a sizeable market and the ability to negotiate alternative purchases. Still, Indonesia remains a net oil importer and carries a substantial subsidy burden.
Thailand responded more aggressively initially with alternative sourcing, higher refinery utilisation, price controls and restrictions on refined-petroleum exports, but these measures do not eliminate its heavy dependence on imported crude and LNG.
The Philippines and Vietnam, meanwhile, face some of the greatest structural exposure. Middle Eastern suppliers have accounted for almost the entire Philippine crude imports and almost 90 per cent of Vietnam’s. The Philippines’ liberalised fuel market rapidly transfers international price increases to consumers, while Vietnam’s refining capacity cannot fully compensate for the structural flaw of its concentrated crude-supply structure.
Cambodia, Laos, Myanmar and Timor-Leste consume less energy in relative terms, but structural gaps still persist with limited fiscal buffers, weaker storage systems and dependence on imported refined fuel all make them vulnerable to prolonged price pressures.
All these disparities and readiness gaps create an uneven regional energy perspective and resilience, where richer and more developed states can secure supplies and assurances first, while smaller ones or those void of efficient and layered energy preparedness risk being outbid.
Diversification without integration
The crisis is also exposing ASEAN’s strategic recalibration towards external suppliers.
Russia can benefit by offering crude products outside the Gulf supply system, often at discounted prices. ASEAN imports of Russian fuels and energy products had already almost doubled between 2020 and 2024 even before the current crisis, and now it has accelerated this shift, with Southeast Asian buyers seeking possibly more Russian crude, fuel oil and potentially fertilisers wherever sanctions and payment arrangements permit.
For ASEAN governments, the current pressing context means ideological alignment will matter less than the need for supply-security hedging. They will continue to prioritise needs-based necessity, securing fallback options with players like Russia while maintaining relationships with Gulf producers, the United States, China, India, Japan, South Korea and Australia simultaneously.
India has also emerged as a refining and petroleum-products hub. China continues to be seen as a provider of infrastructure financing, renewable-energy technologies and battery supply chains.
Japan and South Korea are seen to contribute LNG, efficiency technologies and expertise in strategic stockpiling, while Gulf producers will remain indispensable.
Washington is seen as critical for sanctions waivers, maritime deterrence, shipping security and freedom of navigation assurances. The temporary US easing of restrictions on Russian oil has helped Asian markets obtain emergency cargoes.
National autonomy will continue to trump regional pooling
ASEAN is unlikely to emerge as a unified energy purchaser, as each member has distinct context, affiliations, internal capacities, different national oil companies and fiscal positions. They have little incentive to pool their resources unconditionally, while major importers are still quite reluctant to surrender full procurement autonomy and control to a regional institution they deem to be yet to be sufficiently credible.
It now remains more of a marriage of cosmetic necessity.
Future calculations will need different institutional set-up. ASEAN has been moving rapidly in the energy transition strategic formulation, to reduce energy intensity by 40 percent, raise renewables to 30 per cent of primary energy supply and reach a 45 per cent renewable share in installed power capacity, all by 2030. However, this ambitious plan risks becoming a lofty target that will derail the plant to close the regional development gap and risks following the footstep of Europe where a hastily drawn ambitious plan to rapidly switch the energy infrastructure and aims to meet the green energy agenda has backfired with many resorting back to conventional fuels.
Renewable capacity and the likes of electric vehicles and cross-border grids within a few years cannot immediately replace the conventional role of crude oil, diesel, jet fuel and petrochemical feedstocks on which ASEAN’s transport and industrial systems have depended on conventionally for decades.
Europe’s experience has demonstrated the danger of pursuing transition targets with haste without adequate and clear transitional capacity including storage, transmission networks, and diversified backup supplies. When energy security deteriorates such as now, states will face political pressure to return temporarily to coal, oil or other conventional fuels.
More hedging, but not necessarily more unity
Without binding commitments, ASEAN members will continue the need to preserve individual interests first, further upping competition and scramble for energy security and geopolitical interests as opposed to strengthening regional cohesion and synergy.
ASEAN is seen to emerge from the Hormuz crisis being more diversified and more actively multi-aligned, and not necessarily emerging from a more united standpoint.
The region has adapted better over time at managing the symptoms of disruption, but has yet to create to prevent excessive internal rivalry and competition over scarce resources.
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By COLLINS CHONG YEW KEAT Foreign Affairs, Security and Strategy Analyst Universiti Malaya
