SE Asia’s energy import bill could hit $245B, upending supply chains from Strait of Hormuz

For logistics and procurement leaders across Southeast Asia, the Iran war is not a distant geopolitical event — it is a direct blow to operational stability. Over 80% of the region’s imported oil traverses the Strait of Hormuz, and the conflict has turned that chokepoint from a theoretical risk into a daily cost driver. As countries like the Philippines declare energy emergencies and consumers scramble for rooftop solar, the industrial sector faces a triple threat of soaring fuel costs, unreliable supply, and the long lead times required to shift to alternative energy sources. The IEA’s projection that import bills could reach $245 billion by 2035 means that supply chain resilience must now include energy sourcing as a core pillar.

The International Energy Agency’s latest report, released on June 16, 2026, delivers an urgent wake-up call to Southeast Asia: the ongoing Iran war has exposed the region’s extreme vulnerability to energy supply disruptions, with potential costs that could cripple national budgets and fuel inflation for a decade. The core of the problem lies in the Strait of Hormuz, through which much of Southeast Asia’s imported oil and gas transits. The conflict has transformed a long-recognized chokepoint risk into a live, costly reality, forcing governments into emergency measures and consumers into a scramble for alternatives.

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If current trends persist without major diversification, that figure could balloon to $245 billion by 2035 – a 206% increase that would siphon capital away from infrastructure, healthcare, and education.

The numbers frame the urgency. In 2024, the region’s energy import bill stood at $80 billion. If current trends persist without major diversification, that figure could balloon to $245 billion by 2035 – a 206% increase that would siphon capital away from infrastructure, healthcare, and education. The IEA describes the situation as ‘energy triage,’ with higher bills and rising inflation already biting. In the Philippines, the government declared a national energy emergency, and households turned to rooftop solar at record rates to shield themselves from soaring utility costs. Ivan Cano of EcoSolutions called the demand shock ‘the first time I’ve seen [one] of this magnitude.’

While the crisis is forcing a deeper reassessment of energy strategies, the short-term response has been mixed for the green transition. The IEA notes encouraging signs: electric vehicle sales are climbing, interest in nuclear power is reviving in Indonesia, Vietnam, and the Philippines, and distributed solar is booming. However, the same report warns that the conflict has ‘reinforced the need to rely on coal during times of energy crisis’ – a setback for decarbonization that could lock in high-emitting capacity for years. The Philippines, which has abundant coal plants, illustrates the tension: emergency measures may extend the life of assets the region needs to retire to meet climate goals.