A conflict thousands of miles away translates almost immediately into school closures.
Since Iran effectively shut down traffic through the Strait of Hormuz in late February, oil prices have periodically climbed past a hundred dollars a barrel, and the consequences have been spreading unevenly across Asia ever since. The strait is not a minor corridor — roughly a fifth of the world's oil moves through it, and for Asia that number is even more pointed: about 80% of the oil and petroleum products and nearly 90% of the liquefied natural gas that passed through the strait in 2025 were headed to Asian ports. When that flow constricts, Asia feels it first and hardest.
Not every country in the region feels it the same way. The fault lines run along familiar economic geography. Bangladesh, Pakistan, and Sri Lanka depend heavily on imported oil and gas to keep their lights on and their transport moving, but they lack the foreign exchange reserves to compete aggressively in a market where prices are spiking and suppliers are choosy. When energy gets expensive and scarce simultaneously, these governments face a brutal arithmetic: pay for fuel, or pay for something else.
Wealthier neighbors — Japan, South Korea, Singapore, Hong Kong — have deeper pockets and can outbid poorer rivals for available supply. But structural exposure doesn't respect bank balances. These economies are also deeply wired to Gulf energy, and their strategic reserves, while substantial, have limits. Both Japan and South Korea have made record draws from their state oil stockpiles since the conflict began. Those reserves, however, are sized for emergencies measured in months, not years — roughly 200 days of supply for each country. China stands apart, holding large domestic production capacity alongside significant stockpiles of both oil and LNG, giving it a cushion the others simply don't have.
Governments across the region have moved quickly, if not always elegantly, to manage the pressure. The most visible responses have been about cutting how much fuel people use in the first place. The Philippines, Pakistan, and Sri Lanka have all shifted to four-day working weeks or extended public holidays to reduce commuting. Pakistan has also pushed hybrid work arrangements for public employees. Schools have not been spared: Bangladesh moved up university Ramadan holidays, and Pakistan shuttered schools for two weeks starting March 10, pushing higher education online.
Myanmar's military government went further, imposing fuel rationing and restricting private vehicles to alternating days based on license plate numbers — an odd-even system that cities from Beijing to Manila have used in past crises. Thailand took a softer approach, raising the recommended thermostat setting for air conditioning to 27 degrees Celsius and encouraging workers to swap suits for short sleeves, a small gesture that nonetheless signals how seriously officials are taking demand reduction.
On the subsidy side, Indonesia has committed tens of billions of dollars to keep fuel and electricity affordable for households and businesses. Thailand has capped cooking gas prices and is pushing biodiesel as an alternative. Pakistan tried targeted subsidies for farmers and the transport sector but has already been forced to pull back as the crisis drags on — a preview of what may await other lower-income governments if the disruption continues.
The most consequential shift may be happening in the power sector, where the pressure to keep the lights on is overriding years of climate commitments. Thailand has brought two mothballed units at the Mae Moh coal plant back online. South Korea and Japan have loosened restrictions on coal generation, allowing older plants to run harder. These are not decisions made lightly, but they reflect a hierarchy of priorities: stability now, emissions targets later.
What the crisis has exposed is not a surprise to anyone who studies energy systems — it is the confirmation of a long-standing vulnerability. Asia's dependence on a single geographic chokepoint, combined with limited fuel diversification and, for many countries, thin fiscal buffers, means that a conflict thousands of miles away can translate almost immediately into school closures, rationing, and policy reversals at home. The stopgap measures now in place — shorter work weeks, reserve drawdowns, coal restarts — buy time. Whether that time is used to accelerate investment in renewables, nuclear capacity, and regional energy integration, or simply to wait for the strait to reopen, will shape the region's energy posture for years to come.
Notable Quotes
These are stopgap measures. If disruptions persist, countries may be forced to rethink their energy strategies more fundamentally.— Gokcay Balci and Ebru Surucu-Balci, University of Leeds and University of Bradford
The Hearth Conversation Another angle on the story
Why does the Strait of Hormuz matter so much more to Asia than to, say, Europe or the Americas?
Because Asia is where the Gulf's energy actually goes. Nearly all of the oil and almost all of the LNG that moves through the strait is bound for Asian ports. Europe has more diversified supply routes. Asia built its growth on Gulf fuel.
So when the strait closes, Asia is essentially first in line to feel the pain?
First and deepest. And within Asia, the pain isn't distributed evenly — it lands hardest on countries that can't afford to outbid competitors for whatever supply is still available.
What separates a country like Japan from a country like Bangladesh in this crisis?
Mostly money and reserves. Japan can draw from stockpiles and pay premium prices. Bangladesh has neither the reserves nor the fiscal room to absorb a sustained price spike without making painful cuts elsewhere.
The four-day work week responses — are those serious policy or mostly symbolic?
Probably both. They do reduce fuel consumption in a measurable way, but they also signal to populations that the government is acting. In a crisis, visible action matters politically even when the practical effect is modest.
What's the significance of countries restarting coal plants they had already shut down?
It tells you where coal sits in the hierarchy of priorities. Climate commitments are long-term. Keeping the grid stable is immediate. When those two things conflict, the immediate one tends to win.
Is there a risk that this crisis permanently reverses the move away from coal in Asia?
That's the real question. Short-term restarts can become long-term dependencies if the infrastructure gets recommissioned and the political will to phase it out again weakens. The crisis gives coal a second life it might not easily give back.
China seems to be in a different position from everyone else here.
Significantly different. Domestic production, large stockpiles, and the financial scale to absorb shocks — China has buffers that no other Asian economy can match right now.
What would it actually take to reduce Asia's vulnerability to this kind of chokepoint disruption?
Diversified supply routes, more domestic generation — renewables, nuclear — and regional energy-sharing arrangements. None of those are quick. The crisis might accelerate the conversation, but the infrastructure takes years to build.