By Haley Zaremba of OilPrice.com
The war in Iran has exposed a critical vulnerability in Southeast Asia’s energy markets. The region is heavily dependent on fossil fuel imports, and demand is continuing its steep growth trajectory even as global crude oil prices remain punishingly high. Though the Strait of Hormuz is finally reopening, restoring flows of crude oil out of the Persian Gulf and toward Asian buyers, global oil markets have a long road toward recovery. Luckily, the wheels are already in motion to electrify the continent and move away from heavy dependence on imported oil and gas, but the interim will be a rocky chapter for energy security in the rapidly developing region.
When the Strait of Hormuz initially closed in February, in response to the United States and Israel’s military campaign in Iran, Asian markets were hit hard and hit early by the cutoff. Southeast Asian nations were especially vulnerable to price volatility because of the region’s relatively high dependence on energy imports and low capacity to absorb market shocks thanks to economic constraints.
In the weeks and months after the Strait closed, the Philippines declared a national energy emergency, and governments across the region turned to energy rationing, work-from-home mandates, and even four-day work weeks to manage the strain. However, the same crisis has also READ MORE AT SOURCE »
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