Strait of Hormuz closure triggers energy crisis

On February 28, 2026, the Strait of Hormuz, a critical maritime passage for global oil trade, closed after American-Israeli strikes against Iran. This event disrupted the flow of 84% of the crude oil passing through the strait, which was destined for Asia. The International Atomic Energy Agency (IAEA) labeled it the largest supply shock in history, with global oil supply dropping by 10.1 million barrels per day in March.

Energy prices surge across Asia

The closure led to a sharp increase in energy prices. Brent crude rose more than 90% compared to the beginning of the year, diesel by more than 75%, and kerosene by over 170%. In the Philippines, which imports 98% of its oil from the Middle East, the price of liquefied natural gas (LNG) tripled. The national energy emergency, lasting from late March to late June, could push between 1.3 and 3.1 million Filipinos below the poverty line, according to a public development research institute.

Asia's energy security measures

In response to the crisis, Asian countries implemented various measures to ensure energy security. In Manila, gas stations displayed "no fuel available" signs. In Bangkok, the government capped diesel prices, asked civil servants to work from home, and encouraged citizens to come to the office in shirtsleeves to save on air conditioning. In Seoul, buyers of crude oil sought barrels that did not pass through Hormuz, while Japan temporarily lifted restrictions on coal-fired power plants.

Nuclear energy emerges as a new focus

The crisis also prompted a renewed interest in nuclear energy across Asia. In Taiwan, President Lai Ching-te announced the restart of two nuclear units that had been shut down since 2025. Japan accelerated the restart of reactors closed after the Fukushima disaster in 2011. South Korea, which has never fully abandoned nuclear power, is making it a central part of its post-Ormuz strategy. Southeast Asia, which previously had no functioning nuclear reactors, is now seriously considering the option for the first time.

China's resilience and dual energy strategy

China, which remained largely unaffected by the crisis, showcased its energy resilience. Its power system relies on coal, nuclear, and renewables, not on oil and LNG. By mid-2026, non-fossil installed capacity had exceeded fossil capacity for the first time, reaching about 52% of the total. However, despite the growth in renewable energy, emissions rose by 2% in the first quarter of 2026 due to inefficiencies in the grid and the commissioning of new thermal capacity.

India's renewable capacity vs. coal dependency

India achieved a significant milestone in May 2026, when its installed renewable capacity (excluding large hydropower) exceeded that of coal. However, coal still provides nearly 70% of Indian electricity. The gap between installed capacity and actual production remains due to the lower operational efficiency of solar parks compared to coal plants. Until India deploys sufficient storage and grid infrastructure, the installed gigawatts will not significantly reduce emissions.

China's dominance in green technology

China's role in the global energy transition is growing. It produces about 80 to 85% of the world's solar panels and 80% of the cells and battery systems. Its exports of low-carbon technologies increased by 51% in July 2026, and exports of electric vehicles rose by 90%. However, China's use of rare earths as a foreign policy tool has raised concerns, with the IAEA estimating that full implementation of these controls could expose $6.5 trillion of downstream production outside China.

Asia's green economy as a geopolitical shift

Asia's green economy is not just an energy issue but also a geopolitical one. Countries like Japan, South Korea, and India are now incorporating industrial strategies into their "green" plans, aiming to reduce dependence on both strategic maritime passages and China's industrial dominance. This shift highlights a complex interplay between energy security, economic strategy, and environmental goals in the region.