GOVERNMENTS STEP IN
Concerns over a supply crunch have prompted governments across the region to roll out measures to ease pressure.
Thailand and the Philippines are encouraging work-from-home arrangements to conserve energy. Bangkok also plans to increase biofuel usage to reduce crude demand, Lin noted.
Neighbouring Vietnam has proposed curbing crude exports to prioritise domestic refining, while South Korea intends to implement a price cap on petrol and diesel.
Lin said governments are prioritising households over businesses as they respond to potential shortages.
However, she noted that shielding consumers comes at a cost, with industries bearing the brunt of the strain, which could ultimately weigh on economic growth.
She added that if the Strait of Hormuz reopens within weeks, the impact may remain largely a price shock.
“But if the situation continues, then it will quickly shift to a physical fuel shortage for a lot of countries in the region,” she warned.
She noted that some countries may be able to cushion the disruption by drawing on their stockpiles and implementing measures to curb energy demand in the short term.
“But if it lasts longer than a month, then all (those) measures won’t be that effective anymore, and a few countries will face immediate fuel shortages.”
BROADER ECONOMIC RISKS
Beyond the immediate supply concerns, some economists say prolonged disruptions could pose broader risks to growth and inflation.
Speaking to CNA’s Asia First, Priyanka Kishore, founder and principal economist at macro consultancy Asia Decoded, said the outlook is “quite worrying”.
If elevated prices persist for several months, that would have “significant growth implications” for the region, she added.
Higher energy costs typically feed through to transport and production expenses, economists say, which can slow overall economic activity if sustained.
