Asia Diversifies Energy Supplies Amid Strait of Hormuz Crisis

Asia has been severely impacted by the Strait of Hormuz crisis, which reduced shipping to a trickle after Iranian attacks and a US naval blockade. The region relies heavily on Gulf oil and gas, causing economic fallout six months ago.

In response, Asian countries implemented fuel conservation measures such as price caps, alternate driving days, and work-from-home mandates for civil servants. These measures were temporary solutions, and the region is now seeking more permanent solutions to reduce reliance on imported energy.

Japan's Prime Minister Sanae Takaichi announced the $10bn POWERR Asia initiative in April, which aims to help Southeast Asian economies procure oil and petroleum products and build up strategic stockpiles. Other countries such as Vietnam, Thailand, and India are also increasing their strategic reserves, with some aiming for 90-day minimum benchmarks.

China's latest five-year plan includes provisions for more pipelines and expanded LNG storage, which was drafted before the crisis began but has been reinforced by it. The region is prioritizing reducing exposure to single fuel suppliers or chokepoints.