Southeast Asia's $160 Billion Import Bill Signals Oil Exposure as Hormuz Squeeze Persists
The IEA says the region's energy import bill could triple to $245 billion by 2035; WoodMac warns elevated prices are already stalling the power transition.
ICE Brent crude front-month traded at $99.82 a barrel on Wednesday (2026-09-23), holding near $100 roughly six months after the commodity spiked to $119 on March 9 — its highest since the 2022 energy crisis — when Iran's closure of the Strait of Hormuz halted tanker traffic. The price is well off its peak, but has not fully retreated. WoodMac analysts warned on August 6 (2026-08-06) that persistently high prices and gas shortages were already derailing Southeast Asia's power transition, slowing supply investment and decarbonisation simultaneously.4,6
Around 84% of crude shipments through the Strait of Hormuz are destined for Asian markets, IEA data show. China sources nearly 50% of its oil imports through that chokepoint. Sixty percent of overall Asian crude oil imports come from the Middle East, and former IEA chief Nobuo Tanaka told a hydrogen event in Malaysia during the week of June 8 (2026-06-08) that the Hormuz closure had cost the region an estimated 15 million barrels a day in supply. He called it a nightmare scenario come true.4,1
Iraq, a primary Middle East supplier to Asian refiners, took the sharpest production hit. Output fell from over 4 million barrels a day to just 1.4 million barrels a day after the Strait closed. The Iraqi oil minister reported in May that April exports had collapsed to 10 million barrels, down from 93 million barrels before the conflict between the United States, Israel, and Iran began.1
The financial toll is accumulating fast. Southeast Asia's energy import bill is projected to reach $160 billion this year, up from $80 billion in 2024, according to the IEA. A report the agency released on Tuesday (2026-06-16) warned the bill could reach $245 billion by 2035 without faster diversification of supply and routes, and could balloon to $400 billion by mid-century under current policy settings, equivalent to around 5% of the region's economy.2,3
IEA executive director Fatih Birol said after the June 16 (2026-06-16) report: "Diversification of energy sources and supply routes is now a central priority." The Middle East supplies around 60% of Southeast Asia's crude oil imports, and nearly half of the oil products refined or consumed in the region derive from Middle East crude. The supply disruption has also caused shortages of LPG for cooking, petrochemical feedstocks, and chemical products.3,2
Tanaka framed the Hormuz closure as Asia's third oil shock and argued the structural response must be electrification — EVs, solar, data centre-linked grid investment. Southeast Asian EV sales roughly doubled in 2025, reaching around half a million units, with one in five cars sold regionally now electric, according to IEA figures.1,3
But the transition is being squeezed by the same crisis it is meant to address. WoodMac's August (2026-08-06) analysis of Indonesia found the country accelerating solar deployment alongside selective gas development in direct response to supply shocks, yet warned that gas shortages could simultaneously slow decarbonisation progress. It is a bind Indonesia cannot resolve quickly.6
China is the dominant variable in how quickly Southeast Asia can diversify its energy equipment supply. It controls supply chains in batteries, EVs, and solar panels. Vietnam and Indonesia are building out their own assembly capacity, but China's lead in that supply chain remains substantial, Asian-Power reported in August (2026-08-04).5
The IEA projects regional air conditioner stock will grow from around 50 million units in 2020 to roughly 300 million by 2040 — a structural electricity demand driver running well ahead of most grid-diversification timelines in the region. Data centre electricity consumption was running at about 1.5% of global demand in 2024 and is projected to stay below 3% globally by 2030 even with rapid AI adoption, the IEA said, limiting that particular source of near-term grid pressure.4
Southeast Asia is on track to account for around 20% of global energy demand growth, the IEA said. With Iraqi export volumes still far below pre-conflict levels and ICE Brent front-month at $99.82 on Wednesday (2026-09-23), the 2026 import bill is unlikely to ease materially unless tanker flows through Hormuz recover, and there is no sign yet that they have.2,1,4