Iran war pushes countries into “energy triage” on energy use and price
Countries facing the escalating war with Iran are moving into “energy triage,” with governments weighing whether to curb energy demand, draw down reserves, or absorb higher costs as supplies tighten and prices rise, the Associated Press reported. Asia is where the pressure is most acute, in part because many countries depend on imported fuel delivered through the Strait of Hormuz, where disruptions can quickly reverberate through shipping, refineries, and households.
The AP report described a central dilemma: conserving power can slow industrial activity, while prioritizing essentials such as cooking gas can strain other parts of the economy. Vietnam’s energy-intensive export sectors are among the areas analysts warn could see production costs rise or factory output slow if fuel costs climb or conservation measures intensify.
In Southeast Asia, governments have begun tightening energy use. In the Philippines, officials switched to a four-day workweek to cut back on fuel consumption and reduce government energy use by a fifth, and the government also directed offices to turn off computers during lunch breaks and keep air conditioning no lower than 24°C (75°F). Vietnam urged people to work from home, and in Thailand the prime minister asked officials to take the stairs rather than use elevators.
The AP report said the rationing and conservation efforts are already showing trade-offs for ordinary businesses. In Hanoi, a vegetable seller, Dieu Linh, said even a 10% increase in fuel costs would eat into thin margins, adding that when costs rise slightly, “the profit is almost gone.”
At the same time, Southeast Asia’s governments are competing for limited supplies at higher prices, and AP reported that some countries have tightened policies to protect reserves. Vietnam asked refineries and fuel distributors to keep fuel supplies high, while Thailand stretched its roughly two-month oil reserve and sought other domestic energy sources. Thailand also halted exports to protect its limited reserves, which the report said contributed to shortages that have closed nearly a third of Cambodia’s roughly 6,000 gas stations.
Beyond Southeast Asia, countries are also using strategic reserves while searching for longer-term alternatives. The AP report cited U.S. Energy Information Administration data saying more than 80% of the LNG that passed the Strait of Hormuz in 2024 went to Asia, much of it to Japan, South Korea, and Taiwan. Japan’s first line of defense is a strategic oil stockpile designed after shocks from the 1970s Arab oil crisis, which the report said amounts to around 254 days’ worth of supplies.
Japan began releasing about 45 days’ worth of oil reserves this week to prevent fuel prices from surging as crude oil imports slow, the report said. The AP said analysts also view reserve draws as temporary, describing the releases as a “buffer” for refineries rather than a lasting increase in total supply unless countries can buy oil released by others. The AP report cited the energy consultancy Kpler’s Muyu Xu saying that tapping reserves does not increase a country’s overall supply unless it can buy oil released by other nations.
Japan’s stockpile strategy is meant to keep energy-intensive industries running, with the AP report naming companies such as Toyota, Mitsubishi, and Nippon Steel that depend on steady fuel supplies. South Korea, meanwhile, plans to release 22.46 million barrels from reserves under the International Energy Agency’s largest-ever coordinated stock draw, though analysts told the AP that prolonged disruptions could force production slowdowns and that the fundamental difficulties would not be solved by stockpile releases.
India and Indonesia prioritize households but face pricing and shortage pressures
In South Asia, AP reported that India is prioritizing household needs for limited liquefied petroleum gas, used for cooking and also to power cars. The report said India has absorbed more than half of the increase driven by global market disruptions under a federal scheme aimed at keeping prices low for poor households, citing Indian Petroleum Minister Hardeep Singh Puri.
However, the AP report said the pressure is already reaching restaurants and hotels in India, with eateries shortening hours, closing temporarily, or adjusting menus by trimming long-simmered curries and deep-fried snacks. Analysts cited by the AP said demand at India’s scale limits how long the government can cap prices, and that shortages could worsen quickly if subsidies lapse, with Ember think tank’s Duttatreya Das warning that gas supplies are the most immediate concern and that “You can’t store a lot of gas.”
Indonesia, with a population of about 287 million, is also confronting shortages and pricing choices. AP reported that the government has promised to maintain fuel prices through Eid al-Fitr, marking the end of Ramadan, but that Energy Shift Institute analyst Putra Adhiguna said there is “no clarity about what will happen after that,” which the report linked to the possibility of higher fuel prices later. The AP also reported that Thailand’s subsidy strategy could create similar pressure if subsidies end, potentially raising living costs and triggering panic if reserves fall further.
The AP said those constraints could force Indonesia to choose between keeping subsidies that protect customers or cutting funding to meet budget limits, a trade-off that could feed inflation. Adhiguna warned that with limited reserves—AP said Indonesia has about a 20-day reserve—price fluctuations could be swift and that the situation could reach “a breaking point.”
European Union looks to clean-energy strategy while targeting bills
The energy squeeze has also reached Europe. The AP reported that the European Union is doubling down on a clean energy strategy designed to cut consumption and rein in prices across the 27-nation bloc, and that officials met in Brussels to discuss ways to improve energy security. European Commissioner for Energy Dan Jørgensen told the AP that the bloc is looking at immediate measures to reduce people’s energy bills and to help businesses and “our most vulnerable citizens.”
As countries adjust policies—whether through rationing, stock draws, or price supports—the AP report framed the wider problem as one of competing priorities under disruption: governments can protect households or aim to keep industrial activity moving, but the same limited supply and logistics bottlenecks can make both goals harder at the same time.
AP reported contributions from Ghosal in Hanoi, Elaine Kurtenbach in Bangkok, Sam McNeil in Brussels and Piyush Nagpal in New Delhi.