Southeast Asia’s energy system under strain from war on Iran

Rising tensions in the Middle East have exposed Southeast Asia’s growing reliance on imported energy and are testing the region’s economic resilience, say experts.

BANGKOK: The latest military escalation involving Iran is unfolding thousands of kilometres from Southeast Asia. But for a region that depends heavily on imported oil and gas, the economic effects could arrive quickly, testing energy security, inflation control and long term planning, say experts.

Instability in the Persian Gulf, sparked by targeted air strikes by Israel and the United States on Iran since Feb 28, is disrupting shipping routes and unsettling markets, with policymakers facing renewed questions about how secure the region’s energy supplies really are.If the fighting drags on, it could push up electricity prices and fuel costs across Southeast Asia, and shape long-term decisions about the region’s energy mix.

“The conflict provides a powerful demonstration of the risks of relying on imported fossil fuels,” Indra Overland, head of the Centre for Energy Research at the Norwegian Institute of International Affairs, told CNA.

Broad upheaval in shipping and aviation routes have stretched into a second week; thousands of flights have been cancelled, including at major hubs such as Dubai, Doha and Abu Dhabi, affecting passenger and cargo transport across Asia, Europe and the Middle East.