Iran Conflict Highlights Global Dependence on Oil and Gas from the Gulf Region

The ongoing conflict involving the US and Israel against Iran has underscored the world’s heavy reliance on energy resources originating from the Gulf region. Since the outbreak of hostilities, oil prices have surged significantly, currently hovering around $100 per barrel. The spike is largely attributed to aerial attacks on maritime and energy infrastructure and the closure of the Strait of Hormuz—through which 20 percent of the world’s oil passes.

The current energy crisis is impacting Asian regions most severely. Countries consuming 90 percent of the total oil and gas supplied through the Strait of Hormuz last year are predominantly in Asia. The general population depends heavily on these energy sources to heat homes, run vehicles, and generate electricity. Disruptions in the Persian Gulf pose the greatest threat particularly to Southeast Asia.

Countries like Malaysia and Indonesia, which are capable oil producers themselves, have been reducing production and increasing imports over recent decades. Jen Nakano, a senior researcher at the Center for Strategic and International Studies, explains, “Crude oil from the Middle East is typically classified as ‘heavy sour’ or ‘medium sour.'” She adds, “Processing these types of oil requires significant financial investment,” presenting ongoing challenges for many nations.

The Philippines imports 95 percent of its crude oil from the Middle East. In response, its president has advised public sector workers to reduce fuel consumption by working only four days a week. Similarly, Thailand’s energy minister has announced fuel-saving measures, including limiting air conditioning temperatures in public offices to 26 degrees Celsius.