Source: Council on Foreign Relations (CFR)
Date: March 26, 2026
URL: https://www.cfr.org/articles/the-iran-war-is-reshaping-asias-energy-security-strategies
Key Findings
Scale of Disruption
- The Iran war has generated the largest-ever disruption in oil supplies according to the International Energy Agency (IEA)
- Oil price has skyrocketed as Tehran has essentially closed the Strait of Hormuz
- Persian Gulf oil and LNG producers have shuttered or cut back operations
- Every major stock market has fallen since the war started
IMF Projections
- A 10% increase in energy prices lasting one year would increase global inflation by 40 basis points and slow global economic growth
- The war has already plunged the world into its largest-ever disruption in oil supplies (IEA)
Asia's Exposure
- Many Asian economies depend heavily on imported fossil fuels from the Middle East
- Most Southeast Asian countries have reserves of oil and LNG lasting only 20 to 50 days (per Economic Research Institute for ASEAN and East Asia studies)
- AI data center expansion is compounding energy demand growth across Asia
Japan's Response
- Japan has the third-largest strategic petroleum reserve in the world
- Japan is rethinking its energy future and leading the region's embrace of nuclear energy
- Prime Minister Takaichi Sanae has vowed to achieve 100% energy self-sufficiency, largely through nuclear
- Timeline for nuclear expansion is being accelerated in response to the crisis
China's Nuclear Plans
- China had already planned to build 23 new nuclear reactors
- The war may accelerate nuclear expansion plans as part of energy security strategy
Structural Change
- The crisis is driving structural shifts in Asia's energy planning
- Countries are rethinking dependence on Middle East fossil fuels
- Nuclear energy is gaining acceptance as a strategic solution
Related Questions
- Q1: How Long And How Deep Will The Energy Supply Destruction Be?
- Q2: What Price Impact Will This Supply Reduction Have?
- Q3: What Does The Physical Supply Reduction Mean For Europe?
Related Articles
Bibliography
- Council on Foreign Relations, "The Iran War Is Reshaping Asia's Energy Security Strategies," March 26, 2026. https://www.cfr.org/articles/the-iran-war-is-reshaping-asias-energy-security-strategies