The conflict in the Gulf has triggered a global energy crisis, forcing countries dependent on Gulf oil to ration consumption and rethink supply chains. The International Energy Agency (IEA) and the European Commission have called on governments, businesses, and households to reduce driving and flying, and to work from home wherever possible — measures that echo pandemic-era mobility restrictions.
Across Asia, which bears the heaviest exposure, nations including Japan, South Korea, Thailand, the Philippines, and Bangladesh are expanding coal-fired power generation. Several South and Southeast Asian countries have already moved to four-day work weeks and remote work and learning arrangements to manage prolonged energy shortfalls.
Even If Peace Comes Tomorrow, the Energy Crisis Will Not Resolve Quickly
The conflict involving the United States and Israel against Iran has effectively led to the closure of the Strait of Hormuz — a critical chokepoint through which approximately 20% of global oil and liquefied natural gas (LNG) transits — with shipping through the strait nearly halted. Countries reliant on Middle Eastern energy now face a severe supply crisis.
EU energy chief Dan Jørgensen said on March 31 that Europe is facing an "very serious situation" with no clear endpoint in sight. "Even if ... peace is here tomorrow, still we will not go back to normal in the foreseeable future," Jørgensen said, according to Politico.
Jørgensen confirmed to Politico that the EU wants Europeans to reduce mobility and is urging conservation of oil — particularly diesel and aviation fuel. He added that EU member states are being asked to follow IEA guidance, including working from home, reducing highway speeds, and cutting back on air travel.
IEA's 10 Energy-Saving Rules: Less Driving, Less Flying
According to anIEA announcement published on March 20, the Strait of Hormuz remains closed. IEA member states agreed on March 11 to release 400 million barrels of oil from emergency reserves — the largest stock draw in the Agency's history. The IEA has 32 member countries, including the United States, the United Kingdom, Australia, Canada, Japan, and 24 European nations.
The IEA has stated that supply-side measures alone cannot bridge the energy gap, and that demand-side action is also necessary. It hasproposed ten measures that governments, businesses, and households can implement quickly:
1. Work from home where possible
Displaces oil use from commuting, particularly where jobs are suitable for remote work.2. Reduce highway speed limits by at least 10 km/h
Lower speeds reduce fuel use for passenger cars, vans and trucks.3. Encourage public transport
A shift from private cars to buses and trains can quickly reduce oil demand.4. Alternate private car access to roads in large cities on different days
Number-plate rotation schemes can reduce congestion and fuel-intensive driving.5. Increase car sharing and adopt efficient driving practices
Higher car occupancy and eco-driving can lower fuel consumption quickly.6. Efficient driving for road commercial vehicles and delivery of goods
Better driving practices, vehicle maintenance and load optimisation can cut diesel use.7. Divert LPG use from transport
Shifting bi-fuel and converted vehicles from LPG to gasoline can preserve LPG for cooking and other essential needs.8. Avoid air travel where alternative options exist
Reducing business flights can quickly ease pressure on jet fuel markets.9. Where possible, switch to other modern cooking solutions
Encouraging electric cooking and other modern options can reduce reliance on LPG.10. Leverage flexibility with petrochemical feedstocks and implement short-term efficiency and maintenance measures
Industry can help free up LPG for essential uses while reducing oil consumption through quick operational improvements.
IEA Executive Director Fatih Birol told theBBC that the world has not yet fully grasped the severity of the energy security challenge it faces. "It is much bigger than what we had in the 1970s... It is also bigger than the natural gas price shock we experienced after the Russia's invasion of Ukraine," Birol said.
Indo-Pacific Hit Hardest: When Fuel Runs Out, Money Won't Help
Indo-Pacific nations are among the hardest hit by the energy crisis stemming from the Middle East conflict. Henning Gloystein,managing director of energy and resources at Eurasia Group, told The Guardian that global supply chains have lost nearly 30 billion cubic meters of LNG, with more than 80% of that shortfall concentrated in the Indo-Pacific region.
Gloystein noted that the final cargo ships to transit the strait before the conflict will reach their destinations within the coming week. "The global market has flipped within four weeks from quite a healthy supply surplus … into a very severe deficit – and that's going to not just lead to price spikes, but real fuel shortages," he said.
Gloystein's assessment aligns with the EU's position. He stressed that restoring LNG supply would take years, not weeks. "This isn't a short-term thing – people hope that next week there will be some form of a climb down or ceasefire and then we'll go back to normal. This is going to stay with us for a while because the damage that has been done, it's going to take years to repair," Gloystein said.
Asia Expands Coal Power; South Asia Moves to Remote Work and Four-Day Weeks
Across Asia, governments have responded by ramping up coal-fired power generation. South Korea has announced delays to coal plant closures and has lifted coal usage caps. Thailand has increased output at its largest coal-fired power station. The Philippines has declared a "national energy emergency" and is similarly expanding coal plant operations.
In South Asia, India — which relies on coal for approximately 75% of its electricity supply — has instructed coal-fired power plants to operate at maximum capacity. Bangladesh increased coal-fired generation and coal power imports in March.
Gloystein noted that countries with coal reserves will turn to coal as the fastest and cheapest substitute for LNG, though he added that nations such as India are also accelerating the build-out of renewable energy capacity.
Japan and Indonesia Deepen Energy Security Cooperation
Japanese Prime Minister Sanae Takaichi announced on March 31 that Japan and Indonesia have agreed to strengthen coordination on energy security. According toReuters, Indonesia is the world's largest exporter of thermal coal, accounting for roughly half of global coal exports. It is also a significant LNG exporter, with one-quarter of its LNG exports flowing to Japan.
Japan announced on March 27 that it would allow power companies to expand the use of coal-fired plants beginning in April. Japan has also drawn on strategic petroleum reserves, introduced gasoline subsidies, and is actively seeking energy supply sources outside the Middle East.
