Middle East oil shocks send S-E Asia scrambling for alternatives, but cleaner mix is no easy choice

The crisis may be a catalyst – or obstacle – for the region’s renewable energy transition goals

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Benicia Tan

Published Mon, Mar 16, 2026 · 07:06 AM

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The oil crisis could push governments to diversify into renewables – or return to domestically produced coal, a fossil fuel which the region has struggled to phase out. PHOTO: REUTERS

[SINGAPORE] Oil supply shocks since the onset of the Iran conflict have laid bare South-east Asia’s exposure to fuel from the Middle East, with key sectors such as agriculture, industry and transportation heavily dependent on imported crude oil.

The region is disproportionately dependent on energy imports from the Middle East, with an energy mix still dominated by fossil fuels. Neither is the region’s electricity mix spared from the crisis, with several economies obtaining most of their power generation from liquefied natural gas (LNG) imports.

Across the region, governments have introduced energy-saving measures. Thailand has encouraged public employees to work remotely and instructed government offices to set air conditioning temperatures at 26 degrees Celsius, while the Vietnamese government has urged the use of public transport to save fuel.

Oil Fossil fuels Energy transition Renewable energy Iran Middle East Asean Power Grid