Thousands of miles from the Middle East, the Iran war has triggered a crisis in Asia with energy shortages hitting almost every country on the continent, all dependent on the Persian Gulf for supply.
Three weeks into the expanding war in the Middle East, shipping through the Strait of Hormuz is only possible with Iranian permission. The waterway is critical to the shipment of the world’s oil supply, and that is exactly causing growing pain across the globe.
Anna Coren in Taipei, Taiwan: As drones and missiles rain havoc on oil and gas facilities across the Middle East, thousands of miles away the war has triggered a crisis in Asia, with energy shortages hitting almost every country on the continent, all dependent on the Persian Gulf for supply. Japan and South Korea are tapping into strategic reserves, while developing countries like Vietnam, Cambodia, Thailand and the Philippines are rationing fuel and closing gas stations.
In India, protests have erupted over surging prices and acute shortages. China has reserves and pipelines but has already banned exports of jet fuel, diesel and fertilizer, which is having a knock-on effect.
In self-governed Taiwan, which produces the world’s high-end semiconductors, there are serious concerns about what a protracted conflict will mean for the island democracy that imports 97% of its energy.
“We are going to feel the same impact as other countries—the rising LNG price, rising oil price—and they’re going to hurt the economy, our economy,” Taiwan’s deputy foreign minister Chen Ming-chi said, adding the government is racing to find alternative supplies.
“What happened in the Middle East tells us that it’s very important for us to diversify our energy supply.”
When asked if Taiwan will be buying more LNG from the United States, Chen said, “Definitely. I think that we have to diversify.”
If the crisis in the Middle East drags on, it could prove to be a windfall for American energy companies, in particular natural gas producers, as governments across Asia, including Taiwan, try to secure long-term supply.