Southeast Asia Faces $245 Billion Import Bill as Hormuz Disruption Reshapes Regional Energy Supply
The Strait of Hormuz closure has stripped 15 million barrels of daily Asian crude supply, pushing Southeast Asia's 2035 import bill toward $245 billion.
ICE Brent crude front-month held at $107.93 a barrel on Thursday (2026-09-10), up more than one percent on the session, as the Strait of Hormuz disruption continues to reverberate through Asian crude markets. The price has held well above pre-war levels for months, reflecting a supply shock that has proved far more durable than traders initially priced in.4
Southeast Asia is absorbing the brunt of it. The IEA warned in a report released on Tuesday (2026-06-16) that the Iran war has exposed major vulnerabilities for a region sourcing around 60% of its crude from the Middle East, with nearly half of the oil products refined or consumed regionally derived from Middle East crude. The region's energy import bill is now projected at $160 billion in 2026 and, without faster diversification, could climb to $245 billion by 2035 — triple the $80 billion paid in 2024, the IEA found.3,2
The Hormuz closure is the mechanism. Former IEA chief Nobuo Tanaka, speaking at a hydrogen industry event in Malaysia during the week of June 8 (2026-06-08), said Asia is facing a third oil shock. The chokepoint closure has cost the region 15 million barrels daily in lost supply, Tanaka noted, with roughly 84% of crude shipments through Hormuz normally destined for Asian markets. China, which sources nearly 50% of its oil imports through that single passage, has been hit particularly hard.1,4
Iraq illustrates the depth of the supply collapse. Production dropped from over 4 million barrels per day to just 1.4 million, and exports in April fell to 10 million barrels for the month, down from 93 million barrels before the conflict, according to figures the Iraqi oil minister reported in May (2026-05). Kpler data cited by Reuters in March showed Asian crude imports from the Middle East had averaged 14.74 million barrels per day in 2025. That flow has been severely interrupted.1
The price signal alone understates the physical dislocation. JKM Asian LNG held at $24.68 per MMBtu on Thursday (2026-09-10), flat on the session, while Southeast Asian gas shortages have separately disrupted power supply and threatened to slow the region's decarbonisation plans. WoodMac noted that Indonesia is placing greater emphasis on accelerating solar deployment alongside selective gas development in response. Gas shortages have also caused disruptions to supplies of liquefied petroleum gas used for cooking, petrochemical feedstocks, and chemical products.6,2
IEA executive director Fatih Birol said in June that diversification of energy sources and supply routes is now a central priority for the region. Easier stated than executed. Southeast Asia's energy infrastructure was built around the assumption of stable, affordable Middle East supply, and rewiring those chains — geographically and financially — takes years and capital that smaller regional economies do not have on hand. The IEA's longer-range forecast puts the import bill at $400 billion by mid-century under current policy settings, equivalent to around 5% of the regional economy.3,2
Electrification is the IEA's preferred structural answer. Tanaka pointed to EVs, solar, and AI-driven data centres as the foundations of what he called the age of electricity. Electric vehicle sales in Southeast Asia more than doubled in 2025 to around half a million units, with one in five cars sold in the region now electric, the IEA found. But that pace must be measured against demand growth that is itself accelerating — the IEA projects the regional stock of air conditioners alone will increase from nearly 50 million units in 2020 to around 300 million by 2040, a cooling surge that will strain whichever energy system replaces the current one.1,3,4
Chinese manufacturers dominate global battery, EV, and solar panel production, and emerging markets including Vietnam and Indonesia are developing their own energy equipment assembly capacity, Asian Power reported on August 4 (2026-08-04). Faster deployment of domestically manufactured solar and storage could reduce oil import dependence for power generation, even as transport and industrial sectors remain exposed.5
Iraq's export recovery and any easing at Hormuz would take significant pressure off Asian crude prices quickly. Until either happens, Southeast Asian policymakers are managing an import bill rising faster than their diversification capacity — and the $245 billion figure the IEA projects for 2035 assumes progress that the current crisis has made harder to deliver.3,1