Southeast Asia confronts energy crisis as LNG prices surge amid Iran conflict

Southeast Asia weighs energy transition amid LNG supply crunch

Energy ministers and industry executives convened in Bangkok to confront a prolonged liquefied natural gas price surge triggered by conflict in Iran, as Southeast Asia's twin imperatives of economic expansion and climate commitments collide with soaring energy costs driven partly by the shift to artificial intelligence.

Pragmatism over climate targets at Gastech 2026

On the opening day of Gastech 2026, one of the world's largest energy conferences, policymakers called for pragmatism over net-zero targets and urged closer cooperation to secure affordable LNG supplies, particularly among Southeast Asian neighbours whose industrial plans remain dependent on gas generation. The conference underscored the region's vulnerability as governments balance growth ambitions against decarbonisation pledges.

Iran conflict exposes supply vulnerability

Southeast Asia's energy security has been brutally exposed since the US and Israel attacked Iran in late February, resulting in the virtual closure of the Strait of Hormuz. Tengku Mohammad Taufik, CEO of Malaysian state energy giant Petronas, described the situation as a "debacle" that has "curtailed, disrupted or disturbed" a fifth of the world's gas supplies. The disruption has reverberated across a region heavily reliant on imported LNG.

Singapore's economy is virtually fully powered by natural gas, most of it imported from Malaysia and Indonesia, Southeast Asia's largest producing nations. The city-state's near-total dependence highlights the strategic importance of intra-regional supply chains and the urgency of the affordability crisis now confronting governments across Southeast Asia.

Source: South China Morning Post