Asia’s Energy Dependence Meets a Narrow Strait

Disruptions in the Strait of Hormuz are triggering a critical energy access shock across Asia, where roughly 25% of oil, LNG, and propane supplies originate from the Middle East. With oil prices reaching $100 per barrel and Dubai crude trading at a historic $20 premium over Brent, the region faces tightening supply chains that extend beyond fuel to power generation and food security. While Asia maintains 65 to 70 days of crude reserves, the lack of a similar buffer for LNG is particularly acute due to infrastructure damage in Qatar. This shortage has already forced a 15 to 25 percent price surge in petrochemicals and fertilizers, impacting global manufacturing of electronics and automobiles. In response, regional governments are rationing energy, releasing strategic crude reserves, and reverting to coal to maintain grid reliability despite environmental costs.