Hormuz closed: East Asia’s energy shock and strategic shift

The recent coordinated strikes by the US and Israel on Iran, followed by Tehran’s closure of the Strait of Hormuz, have triggered a crisis that extends far beyond the Middle East. While the world watches the military escalation in the Middle East, the most profound economic and strategic reverberations are being felt in East Asia — a region whose industrial machine and power grids are disproportionately fuelled by Gulf energy.

If the Hormuz Strait remains closed, East Asia faces not just an oil price shock, but a structural energy crisis that will expose deep vulnerabilities in its supply chains. The conventional wisdom that stockpiles offer sufficient protection is dangerously misleading. While oil buffers are substantial, the region’s reliance on just-in-time liquefied natural gas (LNG) deliveries creates a fragility that, if ignored, could translate into power shortages, industrial slowdowns and a fundamental reordering of energy security strategies.

The Strait of Hormuz is the world’s most critical energy chokepoint, with 20 million barrels of oil passing through it each day — one-fifth of global oil consumption — and up to one-third of the world’s supply of LNG. Critically, 84% of that crude and 83% of that LNG was destined for Asian markets. If Hormuz remains closed, East Asia becomes the primary shock absorber.

Yet the exposure is not uniform. The region’s economies fall into distinct risk archetypes shaped by Gulf import dependence, the weight of oil and gas in their energy mix, and the depth of their strategic reserves.

China stands apart. With energy self-sufficiency reaching 84.4% in 2025 and a primary energy mix of self-sufficient coal and renewables, Beijing has built considerable insulation. Oil and gas account for just 18.2% and 8.9% of primary energy consumption — lower than in many Asian and Western economies. Although over 70% of oil and 40% of gas are imported, Beijing has diversified both sources and routes.

The Middle East supplies roughly half of crude imports and a quarter of LNG, but alternative corridors now exist: Russia, Central Asia and Africa supply growing volumes, with pipelines and Arctic routes bypassing Hormuz entirely. Furthermore, its oil reserves — estimated at 100 days of imports — and gas storage covering 35 days of demand provide a meaningful buffer. While price spikes will hurt, China is unlikely to face physical shortages, at least in the short term.

At the other end of the spectrum are Japan and South Korea. These two economies are the most Gulf-dependent on crude oil — Japan imports roughly 95% of its oil from the region, South Korea about 70%. Yet they are also the best prepared for an oil shock. Japan’s emergency reserves of roughly 254 days and South Korea’s 208 days mean that an immediate physical shortage is unlikely. Their vulnerability is primarily financial: skyrocketing freight costs, insurance premiums, and spot market prices that could squeeze refiners and manufacturers.

The real pressure point, however, lies with the gas-heavy economies. For example, Taiwan, where oil and gas together account for nearly two-thirds of primary energy consumption. Japan holds about three weeks of LNG consumption, while Taiwan holds roughly ten days. Once those inventories are exhausted, the crisis shifts from economic inflation to power-sector reliability and industrial continuity.

Southeast Asia’s emerging economies — Thailand, the Philippines, Vietnam, Cambodia, Myanmar and Laos — face an even more acute challenge. Even where Gulf import shares vary, these countries generally combine high oil dependence, thinner stock coverage, and limited LNG storage. They are also more vulnerable to being outbid in tight global markets, translating supply disruptions into domestic price spikes, fiscal stress from fuel subsidies, and intermittent shortages.

The energy exporters — Malaysia, Indonesia, Brunei, and Timor-Leste — are not insulated either. They face second-order risks from refinery feedstock needs, regional product-market tightness, and macroeconomic volatility as Asian buyers scramble for non-Gulf barrels.

East Asian governments’ reactions to the US-Israel strikes reveal a region navigating carefully between alliance commitments, energy dependence and strategic autonomy.

China, Malaysia, Brunei, North Korea, and Timor-Leste have explicitly condemned the strikes as violations of Iran’s sovereignty and the UN Charter. Beijing has moved quickly, dispatching a special envoy and calling for an immediate halt to military operations. This is not merely moral posturing; it is strategic positioning. By framing the US as the aggressor, China reinforces its narrative as a responsible stakeholder and a defender of international law against unilateralism.

Japan and Taiwan have taken a notably different approach. Both have refrained from criticising the US action and instead pivoted to condemning Iran’s “nuclear ambitions” and “destabilising regional actions”. For Tokyo, caught between its alliance with Washington and its energy dependence on the Middle East, this rhetorical shift allows it to stand with its ally while avoiding direct confrontation with its energy suppliers. For Taiwan, the reflex is purely geopolitical: aligning with the US narrative in a crisis.

The rest of the region — including South Korea, Indonesia and most ASEAN states — has retreated into crisis-management neutrality. Their statements focus on protecting citizens, ensuring energy security, and calling for diplomacy, assigning blame to neither side. This is the language of hedging, reflecting acute sensitivity to energy prices and a deep desire not to be caught in great-power crossfire.

As the disruption persists, East Asian governments will inevitably shift from market monitoring to active demand-side management. We will see prioritised power-sector reliability, rationing of discretionary fuel use and potentially export controls on refined products. This is more likely in economies where refining and aviation margins surge quickly under Hormuz stress, creating domestic inflation and distribution pressure even before absolute shortages materialise.

Two long-term structural shifts are likely to accelerate. First, East Asia will intensify diversification away from Gulf hydrocarbons. The US, Russia, Central Asia, Africa and Latin America will become more attractive sources, contingent on political relationships. This will, in turn, narrow the time frame for global fossil fuel demand and weaken the foundation of the Gulf’s economic prospects.

Second, the energy transition will gain new urgency. If fossil fuel imports are subject to the whims of geopolitics, domestic renewables and nuclear power become not just climate policy but national security imperatives.

For the US, the strategic cost is significant. Entanglement in another Middle East war creates an opening for China. Beijing is unlikely to seek a proxy conflict, but it will expertly manage the crisis with Moscow, stabilise regional spillovers and leverage US-China channels to extract concessions on issues like Taiwan and the South China Sea and even beyond.

More broadly, as the crisis persists, the US image and credibility in East Asia are likely to erode — less because governments “switch sides”, and more because they internalise US unilateralism as a volatile risk factor. This will push most states toward greater strategic autonomy and selective reliance on alternative diplomatic platforms, potentially leaving Japan and Taiwan more exposed to isolation on issues where regional majorities prioritise de-escalation and economic stability over alignment signalling.

The closure of Hormuz is a stress test East Asia did not ask for. It reveals that while the region has planned for oil shocks, it remains dangerously exposed when it comes to gas. When the rhetoric of “restraint” gives way to the reality of power constraints and industrial pain, East Asia will confront a sobering truth: its energy security, for all its stockpiles and diversification efforts, remains hostage to a narrow stretch of water 7,000 kilometres away. How the region navigates this crisis — and how it reorders its energy architecture in its aftermath — will shape not only its economic future but its geopolitical orientation for decades to come.

Related: Strait of Hormuz blockade: Why Beijing is better prepared than you think | The costs of quick power: America’s Iran strike