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Muyi Yang

Dinita Setyawati

The escalating crisis around Iran is doing more than just shaking global energy markets. It is constricting the arteries of Asian growth.
A massive share of the oil and liquefied natural gas (LNG) that powers Asian economies passes through the Strait of Hormuz. When tensions rise around this narrow waterway, economic shock waves travel quickly across the region, exposing a development model whose foundations remain dangerously outside Asia’s strategic control.
Japan and South Korea, both heavily reliant on crude shipments passing through the strait, have already seen financial markets react sharply as investors weigh the risks of higher energy costs for manufacturing and export industries. While somewhat buffered by its large strategic oil reserves and LNG inventories, China has moved to halt refined fuel exports to safeguard domestic supply.
In Southeast Asia, import-dependent economies such as Singapore, Thailand, the Philippines and Vietnam face rising inflationary pressure as higher fuel prices ripple through energy bills, transport costs and industrial supply chains.
Meanwhile, the crisis has triggered renewed calls to accelerate renewable energy deployment. The logic is straightforward: home-grown wind and solar reduce dependence on imported fuels and strengthen energy security. However, the transition is far more complex than simply replacing one energy source with another.


In Asia’s manufacturing hubs, crude oil is not just a fuel – it is the hidden ingredient of modern life. It is processed into the plastics and insulators inside smartphones and laptops, the synthetic polyester in our clothing and the lightweight resins used to build TVs and household appliances.
Natural gas plays a similar role. It is an essential raw material for the fertilisers that allow Asian farmers to feed billions, and it also provides the chemical base for everything from paints and adhesives to medicines such as aspirin.
In several Asian economies, gas-fired power plants also play a strategic role in electricity systems by providing the flexibility needed to balance grids and accommodate growing shares of variable renewable energy.
In the transport sector, we often hear about the “electric vehicle revolution”, but the reality is that most of the passenger cars in Asia still run on fossil fuels. Moving these millions of vehicles away from oil will require a massive roll-out of charging infrastructure that extends far beyond major cities, alongside more affordable and durable batteries capable of supporting diverse climates and long-distance travel.




In other words, oil and gas are structurally embedded in the power, industrial and transport systems that underpin Asia’s economic growth. Breaking this dependence requires far more than installing wind turbines and solar panels. It requires rebasing modern industrial economies on clean foundations.
Such a transformation demands a fundamental redesign of industrial technologies, production processes and engineering standards that have historically evolved to operate on fossil fuel inputs. Transport infrastructure built during the past century around internal combustion engines must also be reconfigured. This means, for example, replacing traditional fuelling networks with dense charging infrastructure and adapting ports for new fuels such as green ammonia.
None of this will be easy, but the real question Asia must confront is deeper. Can the region sustain long-term prosperity on a resource system that is imported, volatile and geopolitically exposed?
For decades, fossil fuel imports appeared cheap and reliable enough to underpin Asia’s expansion. Globalised energy markets created the impression that supply risks could be managed through strategic reserves, long-term contracts and supply diversification.


Repeated crises during the past decades tell a different story. Financial shocks, a pandemic, wars and geopolitical conflicts have repeatedly shaken global energy markets. Each episode reveals the same structural weakness: economies that depend heavily on imported fossil fuels remain vulnerable to risks beyond their control.
The Hormuz crisis therefore represents more than a temporary supply disruption; it is a stress test of Asia’s fossil fuel-intensive growth pathway. The choice facing the region is becoming clearer: pay the immense, one-time cost of making an economic transition or continue paying the recurring and unpredictable price of vulnerability.
Building a modern industrial economy on a clean foundation will be complex and demanding, but the alternative is a future permanently tethered to volatile fossil markets and fragile maritime chokepoints. The Hormuz crisis is only the latest reminder.


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Opinion

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Business

Commodities

The choice facing Asia is clear: pay the large, one-time cost of transition or keep paying the unpredictable price of vulnerability


The choice facing Asia is clear: pay the large, one-time cost of transition or keep paying the unpredictable price of vulnerability.


US-Israel war on Iran

Renewable energy

Japan

South Korea

Vietnam

Iran

Singapore

The Philippines

Thailand

China

Oman

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


Why Asia’s future depends on breaking the shackles of fossil fuels

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The choice facing Asia is clear: pay the large, one-time cost of transition or keep paying the unpredictable price of vulnerability

The choice facing Asia is clear: pay the large, one-time cost of transition or keep paying the unpredictable price of vulnerability