Energy Resilience in an Age of Disruption

The global energy system has proven to be surprisingly adaptable in the face of disruption. When the Iran war disrupted passage through the Strait of Hormuz, nearly one-fifth of global oil supplies and liquefied natural gas were affected. However, thanks to years of investment in resilience, worst-case scenarios have been largely avoided.

The United States, Japan, and Europe drew on large oil stockpiles during this time, while China leveraged the flexibility it had built into its refineries, petrochemical industry, and transport system. Saudi Arabia and the United Arab Emirates redirected oil through pipelines that bypassed the Strait of Hormuz.

While these shock absorbers have limits, regional coalitions can help countries pool reserves, coordinate emergency responses, build interconnected infrastructure, or secure alternative supplies at better rates. ASEAN countries are already exploring the possibility of creating a regional fuel reserve in response to the Hormuz crisis.