IEA Warns Southeast Asia Energy Import Bill Could Triple as Hormuz Disruption Drags On
Southeast Asia's energy import costs could hit $245 billion by 2035, triple the 2024 level, as the Middle East conflict keeps key supply routes closed and oil prices elevated.
ICE Brent crude front-month was trading at $105.90 a barrel on Thursday (2026-09-17), holding well above pre-war levels, while Dubai crude, the benchmark most relevant to Asian term contract buyers, was at $118.84 a barrel. For Asia's refiners, those numbers reflect a supply chain that has been stressed since March and has yet to stabilise.
Southeast Asia's energy import bill is on track to reach $160 billion in 2026, the International Energy Agency projected, and could climb to $245 billion by 2035, triple the $80 billion the region spent in 2024. Under current policy settings, that bill could reach $400 billion by mid-century, roughly 5% of the region's total economy, the IEA warned.2,3
The Strait of Hormuz sits at the centre of that exposure. Around 84% of crude shipments through the strait are destined for Asian markets, according to IEA data, and China sources nearly 50% of its oil imports through that single chokepoint. Across Asia more broadly, 60% of crude oil imports originate from Middle East producers, which in 2025 translated to an average daily import rate of 14.74 million barrels, according to Kpler figures cited by Reuters in March 2026.5,1
The strait's closure has pulled 15 million barrels a day from the market, according to former IEA chief Nobuo Tanaka, speaking at a hydrogen industry event in Malaysia during the week of June 8 (2026-06-08). Iraq has borne the worst of it — output fell from more than 4 million barrels a day to 1.4 million barrels a day, and the Iraqi oil minister reported in May 2026 that April exports had collapsed to 10 million barrels, down from 93 million barrels before the conflict began.1
The IEA formalised its assessment in a report released on Tuesday, June 16 (2026-06-16), describing the Iran war as a wake-up call for Southeast Asia's power sector. The Middle East supplies around 60% of the region's crude oil, and almost half of regional oil products are derived from Middle East crude. Disruption has extended downstream: shortages of liquefied petroleum gas used for cooking, petrochemical feedstocks, and chemical products have spread across the region.2,3,4
"Diversification of energy sources and supply routes is now a central priority," IEA Executive Director Fatih Birol said.3
Southeast Asia's power developers are navigating the collision between short-term gas supply pressure and longer-term transition targets. Gas shortages are disrupting planned capacity additions, with the added risk of slowing decarbonisation, Wood Mackenzie said. Indonesia has responded by accelerating solar deployment alongside selective gas development, WoodMac said.7
Tanaka's case for electrification as the path forward has gained some grounding in the data. IEA figures show EV 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. China dominates the supply chains underpinning that shift, from batteries to solar panels and EV components, though Vietnam and Indonesia are expanding assembly capacity.1,3,6
Future demand complicates the transition arithmetic. The IEA projects the regional stock of air conditioners will grow from nearly 50 million units in 2020 to around 300 million by 2040, a structural increase in electricity load that will intensify import dependence unless regional generation capacity expands to match it. Data centres are a smaller but growing variable: the IEA estimated they accounted for roughly 1.5% of global electricity demand in 2024 and projects their share will stay below 3% by 2030, even under rapid AI adoption.5
Iraq's crude output, still at 1.4 million barrels a day against a pre-war level above 4 million, is the most direct measure of supply yet to return. Until those barrels move again, every refiner from Busan to Singapore that built procurement around Middle Eastern crude remains exposed to the chokepoint that spent decades looking like a fixed feature of global trade.1