This month’s regional report (p. 8) takes a deep dive into the impact of current tensions in the Middle East on Asia and Australasia. As Contributing Editor Ng Weng Hoong explains, the response in the region has been mixed. While large swathes of the continent – particularly the Asia Pacific region – have been hit hard and quick, Asia’s major economies (China, India, Japan, and South Korea) have largely weathered the storm so far, thanks to their substantial stockpiles of crude oil.
Indeed, Japan recently pledged to provide US$10 billion to help its Asian neighbours secure energy. The co-operation framework aims to assist Asian countries in their efforts to procure crude oil and petroleum products, as well as expand their stockpiles.
The pledge also reflects Japan’s underlying supply chain exposure. Announcing the agreement, Prime Minister Sanae Takaichi emphasised Japan’s dependence on neighbouring economies for petroleum-derived products, noting that the country is “closely interconnected with each Asian country through supply chains and mutually dependent with them.” This reliance is particularly acute in relation to naphtha, with concerns over potential shortages carrying knock-on implications for sectors such as healthcare.
It is easy to see how the interconnectedness of the global economy means that no country is immune to the impact of current tensions in the Middle East. A fascinating recent article in the New York Times explores the multiplying problems that are being generated by the war – with transportation, manufacturing, and upward mobility all being hit hard in Asia – and how the forces of scarcity may soon spread across the world.1 Citing the International Monetary Fund (IMF), the article notes that the world economy is slowing nearly everywhere because approximately one-fifth of the world’s oil and LNG, along with vital byproducts, have been held back from the global market since the start of the war. It warns of the “dark forces” that resource scarcity tends to unleash in human psychology and capitalism.
The New York Times article also explains how recent interviews with farmers, labourers, drivers and executives, suggest that public concern is more readily apparent than is portrayed in the controlled public messaging of politicians, who are seeking to project calm. This is well illustrated in Australia, where the public has been panic buying fuel despite reassurances from those in government. The country has fallen short of the International Energy Agency’s 90-day fuel stockholding obligation for over a decade; a fact that has been brought into the spotlight since the start of the war. Recent polling suggests that Australians are overwhelmingly concerned about fuel security and rising energy costs, with 92% of survey respondents in support of increasing emergency fuel reserves, 78% in favour of producing more oil domestically, and 76% keen to build more refineries.2
Ultimately, the current tensions in the Middle East are not contained within regional energy markets, but are exposing the depth of global interdependence. While governments continue to emphasise preparedness and cooperation, public concern is increasingly shaped by the lived reality of price volatility and underlying uncertainty. As recent events in Asia show, energy security is no longer a national issue in isolation, but a shared and rapidly evolving global challenge.
- CAVE, D., ‘The Forces of Scarcity Hitting Asia May Soon Spread Across the World’, New York Times, (20 April 2026), https://www.nytimes.com/2026/04/20/world/asia/asia-pacific-iran-war-oil.html
- ‘Australians back accelerated energy development to strengthen fuel security’, Australian Energy Producers, (9 April 2026), https://new.energyproducers.au/news/australians-back-accelerated-energy-development-to-strengthen-fuel-security
