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Middle East and ASEAN Energy Security

A rapid-response analysis examining how ongoing Middle East disruptions affect ASEAN's energy supply chains — covering oil, natural gas, fiscal policy responses, and the region's long-term pathway to energy independence.

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ASEAN Energy Security Insights:
Implications of the Middle East Situation

A rapid-response analysis examining how ongoing Middle East disruptions affect ASEAN"s energy supply chains — covering oil, natural gas, fiscal policy responses, and the region"s long-term pathway to energy independence.

📄 Published: April 2026  ·  9 pages Download Report ↓
About This Report

Middle East and ASEAN Energy Security

About

The ASEAN Centre for Energy (ACE), as the regional intergovernmental energy organisation of ASEAN and the Secretariat of the ASEAN Framework Agreement on Petroleum Security (APSA), is recalling the ASEAN Foreign Ministers" Statement on the Situation in the Middle East on 04 March 2026. ACE acknowledged the role of the Middle East region in the ASEAN energy sector, particularly in oil and gas, as more than half of ASEAN"s crude oil imports are from the region, especially from the United Arab Emirates, Saudi Arabia, and Kuwait.

28% of ASEAN final oil consumption directly disrupted
55% of ASEAN crude oil imports sourced from Middle East
17% of ASEAN natural gas supply from Middle East
Keywords
Energy Security Middle East Crisis Hormuz Strait Crude Oil Supply Natural Gas Supply Shock ASEAN Policy Response Fiscal Measures Demand Management Supply Diversification Electrification Biofuels APAEC AEO9 Energy Transition

Impact Matrix

Impact Analysis · Page 4

The supply shock can be felt across the board — prices at the pump immediately affect communities, as other shortages are slower to reach consumers

Country-by-country impact matrix across all 10 ASEAN Member States, spanning consumption, demand-side, supply-side, and governmental dimensions. Based on available public information as of 26 April 2026.

Consumption Impact
Pump Prices & Fuel
Gasoline & diesel price increases hitting consumers directly and immediately.
Demand-Side Impact
Aviation & LPG
Aviation fuel pressures and LPG shortages affecting households and industry.
Supply-Side Impact
Industry & Fertiliser
Petrochemical force majeures, fertiliser shortages, and market expectation shifts.
Governmental Impact
Fiscal & Macro
Fiscal pressures, downgraded growth forecasts, and rising inflation expectations.
Country Consumption Impact Demand-Side Supply-Side Impact Governmental Impact
Gasoline price Diesel price Aviation fuel LPG shortage Petrochem FM Fertiliser Mkt expectations Fiscal impact Growth forecast Inflation forecast
BRN
KHM
IDNsubsidisedsubsidised
LAO
MYSsubsidisedsubsidised
MMR
PHL
SGP
THA
TLS
VNM

● = Impact confirmed. "subsidised" = pump price absorbed by government subsidy. Based on available public information as of 26 April 2026.

Policy Response

Policy Response Mapping · Page 5

Short-term fiscal policy and demand management remain the most applied interventions — diversifications and monetary policy require longer time to reach markets

A matrix of 12 policy instruments across 4 categories deployed by ASEAN Member States in response to the supply shock. Based on available public information as of 26 April 2026.

Key Finding

"Demand measures will regain some losses. Rerouting out-of-ASEAN exports for intra-ASEAN can add relief, but is fiscally inefficient and will not close the gap. Diversifications and other measures are needed."

Country Fiscal Policy Demand Management Supply Diversifications Monetary Policy
Subsidy Tax cuts Price control Budget realloc. Fuel rationing Travel reductions Energy savings Alt. sourcing Safe passage Dom. refining FX policy CB rate policy
BRN
KHM
IDN
LAO
MYS
MMR
PHL
SGP
THA
TLS
VNM

● = Policy measure deployed. Based on available public information as of 26 April 2026.

Oil Analysis

Oil Supply Analysis · Page 6

ASEAN"s dependence on oil imports — up to 28% of final consumption set to be directly disrupted

Daily movement of crude oil and oil products across ASEAN"s supply chain, showing the scale of Middle East exposure at each node. ME = Middle East, ROW = Rest of World.

28%of final oil consumption directly disrupted
55%of ASEAN crude imports from Middle East
7.5mmBOE daily oil products demand
4.7mmBbl daily crude oil supply
1.5mmBblASEAN domestic crude production
~ROW importCrude from Rest of World
3.2mmBblCrude import from ME (55%)
→
4.1mmBblASEAN domestic refineries
+ 0.2 mmBbl Out-of-ASEAN
+ 0.2 mmBbl Intra-ASEAN trade
→
3.8mmBOEASEAN oil products production
7.5mmBOETotal oil products demand
ROW import 85% · ME import 15%
ME crude-to-product 13%
Intra-ASEAN trade 20%
Out-of-ASEAN 9%
Direct domestic use 55%
Recovery Scenarios · Page 7

Recovery takes time even with an ambitious reopening assumption — demand measures and export rerouting help, but gaps remain

Modelled supply recovery trajectory from Hormuz closure (March 2026) through reopening assumption (May 2026) to supply normalcy in Q3–Q4 2026.

March 2026
Closure of the Hormuz Strait
Immediate 28% supply loss. Gasoline & diesel prices spike across all 10 Member States.
April 2026
Last ASEAN shipment arrives
Final ME shipments in transit reach ASEAN ports. Supply gap becomes fully apparent.
May 2026 (assumption)
Hormuz Strait reopening
Shipment normalcy expected to return in 1–2 months. Production recovery in 4–6 months.
Partial Mitigation Breakdown

From the −28% supply loss: +8 pp from demand measures, +9 pp from export rerouting & diversification — leaving a residual 11 pp gap that requires structural action.

Demand Measure Contributions (% effectiveness share)

Odd-even plate restriction
42%
Fuel price increase
28%
Fuel rationing with coupons
14%
Driving restrictions (one day/week)
11%
Driving speed limit reduction
5%

Natural Gas Analysis

Natural Gas Analysis · Page 8

Around 17% of ASEAN"s natural gas supply comes from the Middle East — translating to a 3% disruption in consumption

Daily movement of natural gas across ASEAN"s supply chain. Power savings or increasing domestic production can recoup losses, but rerouting ASEAN exports is fiscally inefficient.

17%of ASEAN gas from Middle East
3%disruption in gas consumption
4.2mmBOE total gas product supply
3.3mmBOE gas product demand
3.6mmBOEASEAN domestic gas production
ROW import (50%)Rest of world LNG supply
ME import (17%)Middle East gas supply
0.6mmBOEIntra-ASEAN trade (7%)
→
4.2mmBOEGas product supply total
Losses (22%)Distribution and pipeline losses
→
3.3mmBOEGas product demand
Direct domestic energy use (39%)
Out-of-ASEAN (25%)
Direct non-energy use
ACE Assessment

"Demand measures will regain some losses. ASEAN exports more natural gas than it consumes, but rerouting exports is fiscally inefficient. Diversifications and other measures are needed."

Mitigation Pathways

💡 +3 pp recovery
Electricity Savings
Achieving a 20% reduction in power demand through efficiency measures can recover approximately 3 percentage points of the gas supply loss — partially compensating for the ME disruption.
+3 pp of demand recovered
⛏️ Medium-term
Increasing Domestic Production
Accelerating domestic gas extraction in Indonesia, Malaysia, and other producing Member States can supplement supply — but requires lead time and investment decisions made now.
+3 pp additional recovery

Long Term Resilience Pathway

Long-term Resilience Pathway · Page 9

Medium- and long-term actions can reduce dependence — most energy-use dependences are replaceable with electrification and biofuels

A four-tier framework for systematically reducing ASEAN"s structural dependence on Middle East energy imports, from immediately actionable to longer-term technological transitions through 2050.

Today 2030 2035 2040 2045 2050
⚡
Tier 1 · Immediately Replaceable
Advancing electrification and grid reliability

Through investments in the ASEAN Power Grid (APG), accelerated EV adoption, electric cooking, and regional biofuel and renewable energy trade — these end-uses can be decoupled from fossil fuel dependence with existing technology and near-term investment.

ASEAN Power Grid (APG) Electric vehicles Electric cooking Regional biofuel trade Renewables diversification
📅 Commit & plan today · Results land: 2030–2035
🚛
Tier 2 · Replaceable with More Investment
Substituting medium- and heavy-duty transport fuels

Expanded biofuel provision and electrification for freight, buses, domestic shipping, and medical transport — replacing harder-to-electrify transport modes through scaled investment and regional coordination on fuel standards.

Heavy freight electrification Bus fleet transition Domestic shipping biofuels Medical transport
📅 Commit & plan today · Results land: 2035–2040
✈️
Tier 3 · Non-replaceable, but Redesignable
Redesigning hard-substituting industries

Aviation and petrochemical sectors cannot be immediately electrified, but can be redesigned through improved efficiency and long-term technological substitutions — sustainable aviation fuels (SAF), green hydrogen derivatives, and circular petrochemistry.

Sustainable aviation fuel (SAF) Petrochemical efficiency Green hydrogen Technology substitution
📅 Commit & plan today · Results land: 2040–2045 (with residual)
🌾
Tier 4 · Structurally Non-replaceable
Managing demand from no-substitution sectors

Certain uses — ammonia for agricultural fertilisers, lubricants, bitumen for roads, and medical-grade plastics — have no viable technological substitutes within the 2050 horizon. Demand management, strategic stockpiling, and circular economy approaches are the primary levers.

Ammonia / fertilisers Lubricants Bitumen / road materials Medical-grade plastics
📅 Manage demand indefinitely · Residual dependence remains post-2050
ACE Recommendations

The time to commit and plan is now

Actions committed today will determine whether ASEAN reaches its resilience milestones in 2030, 2035, 2040, and beyond. Development work must begin immediately for results to land on time.

Short-term
Deploy Fiscal & Demand Measures
Activate subsidies, price controls, fuel rationing, and energy savings programmes to bridge the immediate supply gap.
Medium-term
Accelerate Diversification Investments
Commit to APG, EV infrastructure, biofuel standards, and alternative sourcing agreements to reduce ME dependency structurally.
Long-term
Plan for 2050 Resilience
Design policy frameworks today for hard-to-abate sectors, ensuring ASEAN"s energy security through technology and demand redesign.

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ASEAN Energy Security Insights: Implications of the Middle East Situation

ASEAN Energy Security Insights: Implications of the Middle East Situation

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