ERIA Issue Paper Calls for Stronger Regional Action on Energy Security Following Strait of Hormuz Disruption

Jakarta, 21 April 2026: ERIA has released a new Issue Paper titled From Shock to Strategy: Strengthening ASEAN Energy Security and Economic Resilience after the Strait of Hormuz Disruption, highlighting the far-reaching implications of the February 2026 closure of the Strait of Hormuz for ASEAN economies.

The paper argues that the disruption represents more than a temporary price spike. Instead, it constitutes a structural rupture in global energy trade flows and a systemic stress test for ASEAN's energy systems, supply chains, and macroeconomic stability.

The closure of the Strait led to a dramatic collapse in vessel traffic, a surge in oil prices above US$100 per barrel, and a sharp decline in liquefied natural gas (LNG) supply. With roughly one-fifth of global oil flows affected and limited rerouting capacity, the disruption has created significant physical supply constraints rather than a purely market-driven shock.

System-Wide Impacts Across ASEAN Economies

According to the ERIA analysis, ASEAN is particularly vulnerable due to its high dependence on imported energy and increasing reliance on external supply routes. The disruption has triggered cascading effects across multiple sectors.

In energy and petrochemicals, constrained crude supply and shortages of key inputs such as naphtha and LPG have driven up production costs and reduced output. These effects have spread into manufacturing industries, including automotive, electronics, and semiconductors, where rising input costs and supply disruptions are affecting competitiveness and investment.

The agri-food sector has also been significantly impacted. Fertiliser prices have surged due to higher energy costs and supply disruptions, raising agricultural production costs and increasing risks to food security and inflation stability.

Logistics disruptions have further amplified these pressures. Shipping delays, rising freight rates, and congestion at key ports have increased transport costs and reduced supply chain reliability, reinforcing inflationary pressures across the region.

Macroeconomic and Development Risks

The Issue Paper highlights the broader macroeconomic implications of the crisis. Higher energy and food prices are weakening domestic demand, while rising import bills are putting pressure on external balances. Currency volatility and tighter financial conditions add to the risk of slower growth.

The disruption may also have social and development impacts, particularly through its effects on migrant workers in the Middle East and the potential disruption of remittance flows to ASEAN economies.

Limits of Fragmented National Responses

A key finding of the paper is that unilateral national responses are insufficient to address the scale and interconnected nature of the crisis. ASEAN economies are deeply integrated through trade, supply chains, and financial systems, meaning that isolated policy measures risk shifting pressures rather than resolving them.

The paper underscores that while ASEAN's economic integration has advanced significantly, its resilience mechanisms remain fragmented. Strengthening regional coordination is therefore critical.

Strategic Directions for ASEAN

To address these challenges, the Issue Paper outlines a set of strategic policy directions centred on two pillars: transforming ASEAN's energy architecture and strengthening resilience across supply chains and the broader economy.

On energy security, the paper calls for operationalising the ASEAN Petroleum Security Agreement (APSA) with coordinated stockpiling, information sharing, and emergency response mechanisms. It also emphasises the importance of accelerating the ASEAN Power Grid (APG) and the Trans-ASEAN Gas Pipeline (TAGP) to enhance cross-border energy connectivity and flexibility.

The paper further highlights the need to diversify energy systems by expanding renewable energy, strengthening storage and grid infrastructure, and promoting regional energy trade.

Beyond energy, the paper stresses the importance of securing critical commodities such as fuels, fertilisers, and industrial inputs through coordinated procurement and stockpiling. It also calls for strengthening agricultural resilience, improving logistics coordination through digitalisation, and enhancing macroeconomic policy coordination across ASEAN.

From Crisis Response to Long-Term Resilience

ERIA emphasises that the Hormuz disruption should serve as a catalyst for deeper regional co-operation and structural reform. As ASEAN plays a central role in regional and global production networks, disruptions to energy and industrial inputs have implications beyond the region.

The paper argues that energy security must be treated as a core foundation of economic resilience. Addressing current challenges requires integrated approaches that link energy systems with supply chain stability, logistics coordination, and macroeconomic management.

Stronger co-operation within ASEAN, as well as with Dialogue Partners, will be essential to mobilise investment, access technology, and strengthen system-wide resilience.

As the Issue Paper concludes, the current crisis is not only a shock to be managed but also an opportunity for ASEAN to transition from reactive responses towards a more coordinated and resilient regional framework.

[Read the full Issue Paper: From Shock to Strategy: Strengthening ASEAN Energy Security and Economic Resilience after the Strait of Hormuz Disruption]