How the Iran war is reshaping energy decisions across Asia

The effects of the Iran war are beginning to show up far from the battlefield.

Across Asia, governments are adjusting in real time. Some are declaring emergencies. Others are rationing fuel, releasing reserves, or urging citizens to conserve energy. Flights schedules are being reconsidered, tourism bookings are slowing, and fuel queues are forming.

In India, Prime Minister Narendra Modi told Parliament the country must prepare for this moment much like it prepared during Covid, warning that disruptions to the Strait of Hormuz could affect energy security, shipping and trade.

Across the region, countries are moving from caution to contingency planning. And in one country, the response has already escalated to a national emergency.

Philippines: A national energy emergency

The Philippines has taken one of the most dramatic steps in Asia so far, declaring a national energy emergency as concerns over fuel supply intensify.

President Ferdinand Marcos Jr warned of the "imminent danger" to the country’s energy security and signed an executive order allowing authorities to accelerate fuel procurement and coordinate emergency measures. The declaration is expected to remain in place for up to one year.

Officials have also warned that grounding flights due to jet fuel shortages is a "distinct possibility", highlighting how quickly disruptions could affect travel and trade. Some government offices have already shifted to four-day work weeks to reduce fuel consumption.

For a country heavily dependent on imported fuel, the move signals how seriously Manila is reading the situation.

Thailand: Tourism and transport under strain

Thailand is beginning to see visible strain. Long queues have formed at petrol stations, with some outlets reporting diesel shortages.

The tourism sector is also feeling the pressure. Trekking operators in Chiang Mai report inquiries dropping sharply, while around 1,000 Thailand-bound flights have reportedly been cancelled. Officials warn that if airspace disruptions last eight weeks, Thailand could lose 600,000 international arrivals and 41 billion baht in tourism revenue.

Transport operators are also concerned. Fuel accounts for 60 to 70 percent of bus operating costs, and even small price increases could affect travel during the Songkran holiday period.

Authorities are now exploring contingency measures, including expanding biofuel use, diversifying imports, and increasing coal-based power generation if needed.

Malaysia: Subsidies surge

Malaysia’s response has focused on stabilising domestic prices. Prime Minister Anwar Ibrahim said the country’s fuel subsidy bill jumped from RM700 million to RM3.2 billion within a week, as global oil prices climbed.

Despite being an oil producer, Malaysia imports refined fuel, making it vulnerable to global price increases. Officials say supply remains stable but have urged consumers not to panic buy.

Rising fuel costs are beginning to affect transport, food prices and household spending, adding pressure to public finances.

Indonesia: Remote work and domestic prioritisation

Indonesia has taken precautionary steps to conserve fuel. The defence ministry has introduced one day of remote work per week, aimed at reducing commuting and lowering fuel consumption.

Authorities are also prioritising domestic energy supply, reflecting concern about potential shortages if disruptions continue.

Singapore: Contingency planning

The impact on Singapore’s energy access appears to be less severe when compared against its Asian neighbours. Minister-in-charge of energy and science & technology Tan See Leng stated on March 20 that the country does not need to dip into its energy stockpiles of LNG and diesel yet, and assured that supplies are enough to last for months.

Singapore is also one of Asia’s largest refining hubs with around 1.3 to 1.5 million barrels per day of capacity, has also begun contingency planning. The city-state is particularly important for New Zealand. Since the closure of Marsden Point in 2022, New Zealand now imports 100 percent of its refined fuel, with Singapore its largest supplier. Recent energy data shows New Zealand imported about 3,595 kilotonnes of fuel from Singapore, more than any other country. With shipments typically taking up to three weeks, any disruption to crude supply or refining in Singapore could ripple quickly into New Zealand’s fuel market.

Singapore and Australia have also signed an agreement to protect oil supplies and coordinate emergency responses, underscoring broader regional concern.

South Asia: Pressure builds, India steps forward

South Asia is among the most vulnerable regions, with many countries heavily dependent on imported fuel and limited reserves.

India: Preparedness, panic buying and regional leadership

India has been watching developments closely. Speaking in Parliament, Prime Minister Narendra Modi warned that disruptions to the Strait of Hormuz could affect India’s energy security, trade and shipping routes. He noted that India has built 5.3 million metric tonnes of strategic oil reserves, with another 5 hundred thousand metric tonnes under development.

Modi also flagged another layer of concern. Around nine million Indians live and work in the Gulf, including in the UAE, Saudi Arabia, Kuwait and Qatar. Any escalation could affect remittances, oil supply and the safety of Indian nationals.

India imports roughly 85 percent of its crude oil, much of it from the Middle East. Early signs of pressure are already emerging. In Bengaluru, premium petrol prices have crossed ₹112 per litre, pushing up transport costs.

India has also received short-term flexibility on energy imports. In early March, the United States issued a 30-day waiver allowing Indian refiners to purchase Russian oil loaded before March 5, with deliveries permitted until early April. The move, aimed at stabilising global supply amid the Iran conflict, provided India temporary breathing space as it diversified fuel sources.

Restaurant associations and delivery platforms in cities such as Bengaluru and Mumbai are discussing fuel surcharges as logistics costs rise. There are also reports of restaurants planning to shut for a few days each week to manage LPG shortages.

One restaurant owner in New Delhi told AMC the uncertainty is real.
“You never know when things suddenly escalate and we have nothing to fall back on. So we are planning ways to sustain supplies for longer,” he said, adding that his family had bought multiple hot plate stoves for emergencies.

Sellers have reported rising demand for such stoves in recent days.

According to local media reports, panic buying has also been reported across several cities, with long queues forming outside petrol pumps. Crowded fuel stations were reported across multiple cities as consumers rushed to fill tanks.

Petrol pump operators, however, reassured consumers that there was no shortage of fuel and urged people not to panic buy.

Officials also moved to calm markets, saying petrol and diesel supplies remain stable. Domestic LPG production has been stepped up, hoarders targeted, and online bookings encouraged. India has also secured safe passage for three LPG tankers through the Strait of Hormuz.

At the same time, India has stepped into a regional leadership role, supplying 45,000 tonnes of diesel to Bangladesh through the India-Bangladesh Friendship Pipeline.

Pakistan: Closed-door cricket

In Pakistan, authorities have urged people to reduce travel amid rising fuel costs. The Pakistan Super League has been played behind closed doors, a striking move in a country where cricket is central to public life.

The government has also closed schools for two weeks, raised high-octane fuel prices by 60 percent, and introduced a levy expected to generate 9 billion rupees per month.

Bangladesh: Fuel queues and rationing

Bangladesh is facing tightening supplies, with long queues forming at petrol stations and some pumps running dry. The country imports more than 90 percent of its fuel.

Motorists have reportedly waited hours, sometimes overnight. Authorities have capped fuel sales while seeking external financing to secure imports.

Sri Lanka: Rationing returns

Sri Lanka has introduced a weekly public holiday and a four-day work week to conserve fuel.

Officials warn fuel stocks could last only 25 days at current consumption. Bus operators say 90 percent of fleets could be taken off roads without fare increases.

Fuel rationing and number-plate allocation systems have also returned.

Tourism bookings are already slowing.

Nepal and Bhutan: Watching closely

Nepal is seeing long queues outside LPG refill centres, while Bhutan is facing rising transport and construction costs.

Northeast Asia: Reserves and conservation

Japan

Japan has announced its largest-ever release of strategic oil reserves to stabilise markets. The government has also introduced fuel subsidies to cap prices and urged calm as anxiety about shortages grows.

Japan imports over 90 percent of its oil, much of it from the Middle East, making it highly exposed to disruptions. Officials are also considering increasing thermal and coal-based power generation if supply pressures deepen.

South Korea

South Korea has taken similarly urgent steps. Seoul announced a record release of 22.46 million barrels from strategic reserves, one of the largest in the country’s history.

South Korea imports around 70 percent of its oil from the Middle East, making it one of Asia’s most exposed economies.

The government has launched a nationwide energy-saving campaign, encouraging reduced driving, lower office energy use and flexible working arrangements. Officials are also preparing supplementary budget measures to support affected industries.

South Korea is also significant for New Zealand’s fuel supply. After Singapore, South Korea is New Zealand’s second-largest supplier of refined fuel. As mentioned, with South Korea importing around 70 percent of its crude oil from the Middle East, any disruption to supply or refining capacity could ripple into New Zealand’s fuel market.

China

China is monitoring closely and may rely further on coal, which already accounts for 55 percent of electricity generation. The country also holds 3-4 months worth of oil in strategic reserves.

Although China remains the world’s biggest importer of oil, stricter government controls on energy prices have limited the effect of the current shock. Furthermore, years of deliberate planning to reduce external dependencies and vulnerabilities are paying off. China’s oil imports are not as dependent on the Gulf region as some Asian nations, with less than half of the China's oil and gas imports come from the Gulf.

Taiwan and Vietnam

Taiwan imports 97 percent of its energy and is preparing contingency plans. Vietnam may lean further on coal, which accounts for around 50 percent of electricity.

Conclusion

The responses across Asia are varied, but they point to a shared concern. Energy security is once again shaping decisions.

For New Zealand, these developments matter. Asia remains central to trade, tourism, students and supply chains. When fuel uncertainty spreads across the region, the effects often travel further than expected.

The conflict may be centred elsewhere, but across Asia, governments are already adjusting to what comes next.

 -Asia Media Centre