IEA warns Hormuz disruption exposes Southeast Asia's energy import risks

By Romel S. Gurky

Disruptions to oil and gas flows through the Strait of Hormuz have exposed structural vulnerabilities in Southeast Asia's energy system, prompting calls for stronger energy diversification and regional cooperation, according to the International Energy Agency (IEA).

In its latest Southeast Asia Energy Outlook 2026, the IEA said the Middle East supplies about 60% of Southeast Asia's crude oil imports, while nearly half of the oil products refined or consumed in the region originate from Middle Eastern crude.

The disruption of shipments through the Strait of Hormuz has led to shortages of petrochemical feedstocks, chemical products and liquefied petroleum gas (LPG) across the region, the agency said.

The IEA estimates Southeast Asia's energy import bill will reach US$160 billion this year and could rise to US$400 billion, or about 5% of regional GDP, by mid-century under current policy settings.

The report said Southeast Asia is expected to account for 20% of global energy demand growth over the next decade, second only to India. Governments are increasingly considering domestic energy resources to strengthen energy security, including oil and gas development, renewable energy, coal and nuclear power.

Renewable energy capacity in the region is projected to nearly triple within the next decade under existing policies. The Philippines emerged as the second-largest destination for Chinese solar exports in the first quarter of 2026, with imports about three times higher than a year earlier.

Electricity demand is also expected to grow rapidly through 2050, increasing by an amount equivalent to Japan's current annual electricity generation over the next decade. Growth is being driven by economic expansion, rising cooling demand and increasing electric vehicle adoption. The stock of residential air conditioners in Southeast Asia is projected to triple by 2035.

The report highlighted energy efficiency as a key tool to improve resilience and reduce import dependence, while emphasizing the importance of regional initiatives such as the ASEAN Power Grid to strengthen electricity security and lower costs.

IEA Executive Director Fatih Birol said diversification of energy sources, electrification, efficiency improvements and stronger regional cooperation would be central to enhancing energy security, affordability and sustainability across Southeast Asia.

Editing by Alexander Ginting