BUSINESS

Hormuz Blockade Sparks Energy Shock Across Southeast Asia

Published: Mar. 19, 2026 12:18 a.m. GMT+8

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Drivers line up to refuel in Chiang Rai, Thailand, on March 17, 2026. Photo: VCG

Governments across Southeast Asia are rolling out cash handouts and expanding energy subsidies to shield consumers as global oil prices climb above $100 a barrel amid escalating conflict in the Middle East.

The measures underscore the vulnerability of import-dependent economies in Southeast Asia to supply shocks, intensified after Iran blockaded the Strait of Hormuz following U.S. and Israeli strikes on Feb. 28.

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Southeast Asian governments are expanding subsidies and cash handouts as oil prices surpass $100/barrel after Iran blocked the Strait of Hormuz.
The Philippines, Thailand, and Vietnam face fuel shortages and rising costs; measures include subsidy increases, excise suspensions, supply diversification, and reduced fuel use.
Malaysia, as a net energy exporter, maintains price controls and allocates $6.2 billion in subsidies, but can only guarantee capped gasoline prices for about two months.

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What Happened When

Feb. 28, 2026：: Iran blockaded the Strait of Hormuz following U.S. and Israeli strikes.

After Feb. 28, 2026：: The Strait of Hormuz became largely shut, severely disrupting energy markets.

March 9, 2026：: Philippines authorities started a four-day workweek for selected government agencies, mandated a 10% cut in fuel consumption for state institutions and public universities, and reduced ferry services.

March 11, 2026：: Vietnam tapped its fuel price stabilization fund, offering subsidies for 95-octane gasoline.

March 16, 2026：: Thailand raised its diesel subsidy cap to 18.31 baht a liter to keep retail prices below 30 baht. Thai Foreign Minister Sihasak Phuangketkeow said Thailand discussed crude oil purchases with Russia and accelerated talks with other non-Middle Eastern producers. Malaysia’s Prime Minister announced a government allocation of 24 billion ringgit to cushion households from rising costs.

March 17, 2026：: The Philippine government distributed a 5,000-peso subsidy to tricycle drivers. The Philippine senate passed a bill authorizing President Marcos Jr. to reduce or suspend fuel excise taxes.

AI generated, for reference only