The war in the Middle East between the United States (US) and Israel on one side and Iran on the other, going on for almost two months now, has had a disrupting effect on the energy supply passing through the region. In particular the current tussle between the US and Iran over Strait of Hormuz is likely to exacerbate the energy crisis globally.

Strait of Hormuz is a narrow strait in the Persian Gulf region located between Iran and Oman. Normally 20% of the world’s oil supply passes through this strait on daily basis. Out of this 20%, around 80% of the oil reaches Asia. While China and India remain major importers, Southeast Asian countries like the Philippines, Indonesia and Thailand are also among the principal importers of oil and gas from the Middle East. With the US taking steps to block the Strait of Hormuz, there are concerns of energy supply being disrupted as even the Gulf countries are finding it difficult to export their oil outside the region.

Southeast Asia is one of the regions in the world that is heavily dependent on the Middle East for energy supplies. The Philippines imports almost 100% of its oil from the Persian Gulf and nearly 25% of its total energy supplies from the Middle East. Vietnam is heavily dependent on Kuwait for its oil and gas requirements. The energy crisis caused by the US-Israel-Iran war is going to be the prime area of focus during the Association of Southeast Asian Nations (ASEAN) Summit scheduled to be held in the Philippines on May 7 and 8.

The energy crisis has forced the Southeast Asian countries to adopt several measures like rationing, incentives to teleworking for avoiding transportation costs, subsidies and fuel price caps. Among various measures, Southeast Asia is also working towards speeding up transition to renewable energy to reduce dependence on fossil fuels. These measures could provide a temporary relief, but in the long run, Southeast Asia would need to work towards stability in the energy sector which can be achieved only through generating energy through renewable sources.

The need to rush towards energy transition is not just because of the recent disruptions in the oil and gas supply. Southeast Asia’s rising energy demands also make it imperative for the region to diversify its energy supplies. According to a report by Boston Consulting Group published in January 2026, the electricity consumption in Southeast Asia increased by 24% from 2021 to 2025 and 70-80% of the electricity demand is met by fossil fuel sources – coal and gas.

Recognizing the challenge, the ASEAN policymakers initiated taking steps towards energy transition. On March 13, the region’s economic ministers issued a joint statement in which they linked turbulence in energy market directly to economic stability. They also called for diversification, faster renewable deployment, stronger strategic reserves and renewed momentum behind the ASEAN Power Grid and the trans-ASEAN Gas Pipeline.

To put in action the strategic policy changes for energy transition, large investment in renewable energy – wind, solar and hydropower – is required. Already Southeast Asian countries are working in this direction. These countries have increased investment in renewable energy from $30 billion in 2015 to $47 billion in 2025.

Transition to renewable energy could usher in many benefits for Southeast Asian countries. First, it will reduce the cost of electricity. In the past decade, the cost of generating renewable energy has gone down which has made it competent against generating electricity from coal. Generation of electricity from renewable sources would reduce demand for electricity from traditional sources thereby bringing down the cost of electricity.

Second, renewable energy would lead to a more stable economy as dependence on oil and gas imports will come down. At present, this dependence also means that the importing countries do not control the supply.

Third, reduced use of fossil fuels would reduce air pollution, a challenge which many Asian countries are facing.

Southeast Asia has a vast untapped potential for generating renewable energy. In countries like Indonesia, Vietnam and the Philippines more than 90% of this potential has remained untapped.

While Southeast Asia has clarity about diversifying its energy needs and shifting to renewable energy, it is important to rapidly implement the steps that the policymakers in the region have identified. It would make the region less dependent on fossil fuel and in turn make it more capable of absorbing shocks that global geopolitical tensions create.

Mr. Niranjan Marjani is a political analyst and researcher based in Vadodara, India.