How the US-Iran war has redrawn Asia's energy map

Higher oil imports from Russia, US have partially offset fall in total shipments

For decades, the Strait of Hormuz has been Asia's energy lifeline. In February, almost 85% of Asia's oil imports transited the narrow waterway, while for LNG it was about 28%. © Reuters

SHOTARO TANI

August 6, 2026 17:25 JST

TOKYO -- Just over five months since the start of the U.S. and Israel's war against Iran, Asia's sourcing of oil and liquefied natural gas has shifted substantially -- with Washington and Moscow so far emerging as main beneficiaries. As ceasefire talks and the future of free transit through the Strait of Hormuz continue to hang in the balance, the current supply chain picture speaks not only to how the region's economies have adapted, but to a potentially durable realignment and shift in demand.

The scramble for alternative oil and LNG has created winners in other parts of the world. In addition to the U.S. and Russia, oil suppliers from Africa and South America have gained market share.

At the same time, overall oil imports have declined across Asia, pointing not only to the war's economic toll but also to the impact of green technologies. LNG imports, meanwhile, increased by about 10%.

On Wednesday, Iran said it had reached an agreement with Oman on a shipping route through Hormuz, raising the prospect that the strait would reopen; however, the U.S. continued to block Iranian ports. U.S. President Donald Trump has prioritized a reopening but has been caught between securing the economic relief that would entail and the risk of political backlash over conceding too much to Tehran, which has sought to impose a toll on ships passing through the waterway.

Here is a look at how countries have fared amid the energy crisis, and how they have overhauled their supply sources. All oil and LNG flow data comes from Kpler, a commodities consultancy.

Japan: Oil imports down 11.4%; LNG imports down 11.17%.

Japan has been able to weather the Hormuz shock much better than other countries, despite being heavily dependent on Middle Eastern oil, thanks to having the world's third-largest strategic oil reserves. When the war started, Japan had 250 days' worth of reserves and, in mid-March, was among the first countries to release those reserves.

"Fortunately, Japan had sufficient strategic stockpiles and domestic refining capacity," said Ichiro Kutani, director at The Institute of Energy Economics Japan. "By utilizing those stockpiles and refining crude oil domestically, the country was able to buy some time."

Prewar, over 90% of Japan's crude supplies came through Hormuz; the level is now around 10%, with Middle East flows offset by a surge in imports from the U.S.

At the same time, Japan's gas sector proved far less exposed than its oil sector thanks to decades spent diversifying its LNG sources. Australia continued to play a major role in supplying Japan with the fuel, while U.S. volumes also surged, accounting for just over 15% of the country's overall imports in July, up from 1% in February.

China: Oil imports down 39.97%; LNG imports up 51.35%.

China's oil imports have collapsed since the war began, helping contain the jump in global oil prices.

The proliferation of electric vehicles on China's roads is partly responsible. The rise in fuel prices has dented demand for conventional cars and flights, while EV and high-speed rail use has increased. EV battery charging and swapping services used 14.8 billion kilowatt hours of electricity in June, up 57.1% year-on-year, according to an industry association.

Beijing helped cushion the shock by imposing controls on gasoline price hikes and curbing fuel exports. It also dipped into vast crude stockpiles, analysts say, although a lack of official data makes it difficult to pinpoint by how much. Crude oil processed by large refineries dropped 17.7% year-on-year in June.

"China's oil companies responded to the sudden withdrawal of Persian Gulf supply by slashing imports and refinery output," Wei He, an economist at Gavekal Dragonomics, wrote in a note on Monday.

India: Oil imports down 4.22%; LNG imports up 24.08%.

Beyond amping up inflationary pressure, the closure of the Strait of Hormuz has further complicated relations between India and the United States.

From June 2025 through February this year, India cut its imports of Russian crude oil by half under pressure from Washington, but since the start of the war it has reversed course, with these increasing by almost 156%. With a U.S. sanctions waiver on purchases of Russian oil ending in late June, India, alongside China, could once again be targeted with up to 100% tariffs by the U.S. if a bill outlining new penalties secures legislative approval.

"I will not expect Russian arrivals to fall immediately if the conflict ends durably," said Priya Walia, vice president of commodity markets oil at energy analytics company Rystad Energy. "The more likely outcome in the next few months is normalization, rather than full reversal: Gulf barrels recover part of their lost share, but Russian crude remains a major component of India's import mix."

Amid the war, India's state-owned fuel retailers, who control 90% of the market, hiked prices for the first time in four years.

The country also saw a dip in power generation from fossil fuels after the first month of the war, helped by an increase in solar power generation. Junior power minister Shripad Naik told parliament in March that India was accelerating commissioning clearances for wind and battery storage projects.

Indonesia: ASEAN 6 (Singapore, Thailand, Malaysia, Vietnam, Philippines and Indonesia) oil imports up 0.13%; LNG imports up 27.37%.

The Indonesian government has partly addressed disruptions to oil supplies by increasing imports from Russia, from which it imported 103,669 metric tons of crude worth $75.34 million in June. That followed an agreement reached during President Prabowo Subianto's visit to Russia in April.

The government is also accelerating the implementation of its B50 biodiesel mandate, which increases the palm oil content in the fuel to 50%. Officials estimate the policy could reduce fuel import costs by as much as $10 billion annually.

However, businesses with heavy diesel consumption, including plantation processing companies and logistics operators, have raised technical readiness concerns. Industry players say some commercial and passenger vehicles may not be immediately compatible with B50, citing potential engine performance and safety issues.

Rahma Gafmi, an economics professor at Airlangga University, said importing crude from Russia carries several risks, including potential exposure to international sanctions, higher maritime insurance costs and compatibility challenges at Indonesia's refineries.

"This makes Indonesia's energy security increasingly vulnerable to geopolitical shocks while creating difficult trade-offs in domestic energy policy," Gafmi said.

Philippines

Middle East petroleum accounted for nearly all of the Philippines' imported crude oil before the war, while fossil fuels comprise roughly 70% of the national energy mix. In response to the supply disruptions and price volatility, Manila has adopted a strategy of short-term price mitigation, accelerated renewables development and broader domestic energy security initiatives.

After the conflict pushed domestic diesel prices past 130 pesos ($2.30) per liter in some regions, the resulting crunch forced gas stations to close across the nation and sparked protests by public transport operators. In response, the Department of Energy has issued regular conservation directives, and the government in March implemented a shortened workweek for civil servants to curb energy demand.

That same month, President Ferdinand Marcos Jr. declared a state of national energy emergency, deploying a 600 billion-peso relief package alongside emergency legislation to suspend petroleum excise taxes. To maintain grid stability, the energy department also temporarily boosted output from coal-fired power plants.

While aiming to increase the share of renewables, Marcos has also raised the prospect of introducing nuclear power generation for long-term energy security.

South Korea

Oil imports up 34.3%; LNG imports down 18.32%.

South Korea, a major manufacturer that imports nearly all of its energy, drastically increased its shipments of oil from Saudi Arabia and the U.S. from February through July, with shipments from those countries rising 36% and 41%, respectively. Saudi Arabia has been able to make shipments through the alternative Red Sea route, and for a time through a temporarily reopened Hormuz. The Iran-linked Houthis in Yemen, though, have begun attacking ships sailing the Red Sea.

In the early stages of the Hormuz crisis, Presidential Chief of Staff Kang Hoon-sik reached a deal with Saudi Arabia to purchase 250 million barrels of crude oil, along with 18 million barrels from Kazakhstan and 5 million barrels from Oman.

Since then, government officials have fanned out across the globe seeking alternatives to Middle Eastern supplies. While in Argentina on Saturday, President Lee Jae Myung said his country had agreed to make its first crude oil purchases from the South American nation next year. Lee's office said the initial amount would be 880,000 barrels of crude, which would be a step toward larger shipments.

Taiwan

Oil imports down 3.76%; LNG imports up 38.82%.

Worries over Taiwan's reliance on Qatar for one-third of its LNG imports forced the government to implement emergency measures.

The government-owned energy company CPC "swiftly secured alternative short-term supply by tapping the spot market and accelerating contract deliveries from non-Gulf partners, most notably Australia and the U.S.," observed Tsaiying Lu, an energy expert at technology-focused think tank DSET.

Public utility Taiwan Power also activated short-term temporary dispatches of emergency coal-fired units, Lu said. According to DSET, this contingency framework can slash daily LNG consumption by up to 20%.

Beyond meeting immediate needs, the Hormuz situation triggered a wider conversation about energy resilience under the threat of a potential Chinese blockade.

"Energy supply security is integral to Taiwan's chip industry, which in turn underpins Taiwan's strategic value to the global economy," said a recent report by the Center for Strategic and International Studies, which put the island economy's energy self-sufficiency at 4.2%.

The issue has also rekindled debate over nuclear power, a major rallying point of the opposition coalition that controls parliament.

Still, restarting nuclear power plants would take years, meaning reactors are not an immediate answer.

Additional reporting by Wataru Suzuki in Shanghai, Soumyajit Saha in Mumbai, Ananta Agarwal in Bengaluru, Ismi Damayanti in Jakarta, Ramon Royandoyan in Manila, Steven Borowiec in Seoul and Thompson Chau in Taipei.