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Thu, 12 Mar 2026

Thu, 12 Mar 2026 How Iran war laid bare the world's reliance on Gulf oil and gas

Countries around the world are feeling the impact of the conflict and the resulting energy price shock.
The ongoing conflict in the Middle East has led to a significant increase in oil prices, with a barrel of crude oil trading at over $100. The Strait of Hormuz, a vital waterway for energy shipments, has been closed due to air strikes and military attacks, causing disruptions to global oil supplies. Asian countries are particularly vulnerable to the energy crisis, as they rely heavily on imported oil from the Middle East. South East Asia is highly exposed to the blockage in the Persian Gulf, with nearly 90% of its oil and gas passing through the Strait last year. Ordinary people in the region are affected by the high prices, which are used for heating homes, fueling vehicles, and generating electricity. Countries such as Malaysia and Indonesia have increased their imports of oil over the past decade despite having domestic production capabilities. This is due to the type of oil produced in the Middle East being "heavy sour" or "medium sour", which requires specific refineries that are not easily adaptable to alternative suppliers like the US. The Philippines, for example, gets 95% of its crude oil from the Middle East and has implemented measures such as a four-day working week for public workers to save fuel. Other countries in the region have also introduced similar measures, including working from home and setting higher air conditioner temperatures in public offices. Food prices are also affected by the rising transportation costs, with many Asian countries relying heavily on imports. Singapore, for instance, imports 90% of its food, while Indonesia gets all its wheat from outside the country. Governments in Asia are taking steps to mitigate the effects of the energy crisis, including capping fuel prices and providing subsidies to oil wholesalers. China, however, is well-placed to weather the storm due to its large oil reserves and ability to import Iranian oil under US sanctions. The International Energy Agency (IEA) has agreed on a plan to release millions of barrels from national stockpiles, with Japan and South Korea participating in the effort. However, Europe's reliance on Middle Eastern energy has decreased since it turned away from Russian oil and gas after the Ukraine invasion.