How has Southeast Asia reacted to rising Middle East energy prices?

Mar. 31, 2026, marks the end of the first month of the Iran War, and as many observers feared, it has ended with the vital Strait of Hormuz effectively closed.

The International Energy Agency estimates that 25 per cent of the world’s seaborne oil trade transits through the Strait, and of that 80 per cent is bound for Asian markets, predominantly India and China.

In addition, 19 per cent of the world’s trade in natural gas also passes through the Strait.

So with the Strait having been blocked for over a fortnight, unsurprisingly, fuel prices in the region have spiked, forcing many countries in Southeast Asia to take drastic measures, mostly by governments, but many by individuals.

The price of gas

Perhaps the most obvious signal of the fuel crisis is, well, the price of fuel.

In Malaysia, the price of unsubsidised RON95, 95 Octane petroleum, has increased 60 sen (S$0.19) a litre, with diesel going up 80 sen (S$0.26) a litre, to about RM3.87 (S$1.24) and RM5.52 (S$1.48) a litre, according to its Ministry of Finance, on Mar. 25.

The increase in fuel prices has led drivers to rush to refuel their vehicles before fuel prices increase further, leading to long lines, as seen in cities like Jakarta, where drivers rushed to refuel on the mere rumour that prices were about to increase.

In cities like Hong Kong, drivers have taken to crossing the border into China to escape petrol prices that have risen over S$5 a litre, causing long lines in neighbouring Chinese cities.

www.mothership.sg/2026/03/hong-kong-fuel-price-go-china/

These lines are also exacerbated by fears that petrol supplies might run out in recent weeks in Thailand and Laos.

Over the Hari Raya holidays, Malaysian authorities warned those travelling to Thailand that they may encounter petrol stations that had run out of fuel.

This is not just a Southeast Asian phenomenon, with Australia reporting empty petrol stations, as well as heated confrontations about drivers hoarding petrol.

@mothershipsg An Australian social media figure, Willem Powerfish, filmed a man pumping containers of petrol amid a fuel crisis in Australia and posted the video on his Facebook page on Mar. 24. According to 7News, a fuel emergency plan had just been proposed to cap fuel purchases at A$40, allowing motorists to only buy about 16 litres at a time. However, according to news.com.au, Australia Energy Minister has ruled out implementing the fuel limit, saying the proposal is “a bit out of date”. #mothershipabroad #australia #tiktokaustralia #fyp ♬ original sound - Mothership

Work from home

Governments have reacted swiftly, moving quickly to reduce energy where it can.

Malaysia, Thailand, Indonesia, and the Philippines are amongst the countries that have turned to work-from-home mandates for civil servants, encouraging them to only come into the office four days a week.

Some of these measures were already in place by Mar. 12, less than two weeks into the war, indicating how difficult they foresaw the situation getting, and how quickly.

An expert Al Jazeera spoke to at the time said they're "trying to manage the supply situation before it even comes close to hitting them”.

Thai PBS news anchors showed solidarity with those asked to work from home and raise air conditioning temperatures by symbolically taking off their suits, encouraging others to wear fewer layers of clothing, trading formality for less energy use.

CNA reports that Indonesia has limited refuelling to 50 litres per vehicle, in an effort to "ensure fuel distribution", said economic affairs coordinating minister Airlangga Hartarto.

The Philippines has also declared a national energy emergency, which The Diplomat says would give the Philippines President Ferdinand Marcos Jr the legal means to tackle hoarding, profiteering and supply manipulation.

The country is critically dependent on oil from the Gulf, gaining almost 90 per cent of its oil from the region, and its experience is a warning for governments about the political turmoil they might face, with Marcos facing heavy political pushback about whether his measures were sufficient or if they were “piecemeal”.

Subsidies

Governments have addressed high energy prices in different ways.

Malaysia subsidises petroleum, providing up to 300 litres of RON95 petrol for Malaysian citizens driving Malaysian cars at RM1.99 (S$0.64) a litre.

In light of the fuel crisis, Malaysia has committed to continuing the subsidy at the cost of RM4 billion a month, or S$1.3 billion.

However, it has also cut the subsidy from 300 litres to 200 litres temporarily, a move that might invoke protests at other times appeared to be accepted in light of current difficulties.

Australia has similarly moved to ease the hit to drivers' wallets, on the one hand, urging moderation and using the bus, and on the other, halving the national fuel excise.

But again, this has not come without cost, with Reuters estimating its price tag to be A$2.55 billion (S$2.27 billion) per month.

Some countries, seeing the fiscal onslaught that subsidies would bring, have done the reverse.

The Nation reported that Thailand’s government had ended blanket subsidies, prompting newly elected Thailand Prime Minister Anutin Charnvirakul to apologise publicly for the “turmoil caused by the management of oil prices”.

Malaysia’s government also had to fight back against false infographics, suggesting that the government was raising the price of fuel by over 200 per cent.

Home truths

Singapore is, of course, not immune.

Petrol prices have risen sharply, and the price of diesel is overtaking petrol for the first time in recent memory.

Singapore’s government has also been actively engaged in the matter. A recent phone call between PM Wong and Australian Prime Minister Anthony Albanese led to an  agreement that, among other things, reaffirmed both countries’ commitment to strengthening energy security and supporting the flow of essential goods, such as petroleum oils and LNG, between them.

Queues are also forming at some petrol stations, although it is to find cheaper options, rather than a fear of shortage.

Government relief arrived recently in the form of U-Save vouchers, but some might note: these were prescheduled.

But on the other hand, the government has been signalling the possibility of this type of crisis for some time, hence the repeated warnings of unprecedented geopolitical volatility.

Tanker War

But at the moment, Singapore's best response to this crisis is really their response to the last Strait of Hormuz crisis, the Tanker War in the 1980s, during the Iran-Iraq War, where belligerents decided to take pot shots at tankers trying to exit the gulf.

During the economic crisis that ensued from that time, there was little Singapore could do to mitigate energy concerns, being a small country with no oil and gas resources of its own, as explained in an episode of Asianometry.

Instead, Singapore did what Singapore does: it compensated for a lack of resources with planning and industrial policy, carving out an essential niche for the country, turning itself in a refining powerhouse, one of the top 10 petrochemical exporters in the world according to Statista.

This means that while Singapore will very little influence on how much oil is coming out of the ground, its role in determining its final, usable form might be more crucial than ever, especially in the upcoming years.

Top image via Canva