Global EconomySupply ChainMiningCommoditiesEnergy

How the Middle East War Is Reshaping Asia’s Upstream Strategy, with Prateek Pandey

Rystad Energy
Rystad Energy•Apr 8, 2026

Why It Matters

The war accelerates Asia’s shift toward regional energy sources, reshaping investment flows and raising consumer costs, making energy security a top priority for policymakers and businesses alike.

Key Takeaways

  • •Asia depends on 55‑60% of global oil imports, now vulnerable.
  • •Pakistan and Philippines face >95% reliance on Middle Eastern fuel supplies.
  • •NOCs aim to boost output by 3‑5% via existing PSC interventions.
  • •IOCs redirect investment to Asian gas projects, especially Indonesia and Malaysia.
  • •Pipeline and regas infrastructure gaps could limit domestic resource utilization.

Summary

The podcast examines how the Israel‑Iran‑U.S. conflict is forcing Asian energy planners to rethink upstream strategies. With roughly 55‑60% of the region’s oil and 70% of its LNG imports coming from the Gulf, any disruption to the Strait of Hormuz creates immediate supply shocks, prompting governments to declare emergencies, tap strategic reserves, and explore demand‑reduction measures.

Analysts note that countries such as Pakistan and the Philippines are most exposed—over 95% of their oil and nearly all LNG imports originate in the Middle East—while India and China each source 50‑60% of crude from the region. National oil companies are scrambling to lift production by 3‑5% through well interventions and to negotiate new gas‑sale agreements, while international majors are shifting focus toward Asian gas basins, especially Indonesia, Malaysia, and the Andaman deep‑water prospects.

Prateek Pandey highlights that the crisis underscores the strategic value of domestic resources. Recent discoveries in the Andaman Basin and large gas finds in Indonesia have reignited interest from IOCs and independents, who see faster‑to‑market projects with existing infrastructure as a hedge against geopolitical risk. However, pipeline bottlenecks and limited regasification capacity—particularly in Indonesia—remain critical constraints that could blunt the benefits of new upstream supply.

The broader implication is a pivot toward regional self‑sufficiency, even if it comes at higher cost. Investors are likely to see increased capital flows into Asian upstream and midstream assets, while consumers may face pricier energy as the market adjusts to a less reliable global supply chain.

Original Description

This episode was recorded on Tuesday, 31 March.
Let’s Talk Energy and try to understand how the war in the Middle East is changing how companies and countries think about producing energy in Asia. Nowhere – outside of the Middle East itself - has been impacted more by the ongoing conflict between the US and Israel and Iran and the de facto closure of the Strait of Hormuz than Asia, which receives the lion’s share of the region’s oil and LNG exports. The loss of that crucial supply has led countries to declare energy emergencies, tapping reserves, rationing supplies and trying to find ways to reduce demand such as shortening in-office work weeks. For private companies and national champions alike, the war has reinforced the imperative to find diverse sources of supply that don’t have to travel through increasingly fragile chokepoints in global trade.
+ How might companies adjust their future strategies in response to the immediate supply shock created by the war?
+ What is the potential of the region to meet its own growing demand for oil and natural gas?
+ Will more secure, regional supplies come at a higher cost for consumers?
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Further Analysis :
- Strait of Hormuz crisis: How far is the world from a fuel shortage? (clients only): https://portal.rystadenergy.com/article-detail/695097?qid=90c04e6a3ccfa3db523c087323a9fbf8&oid=doc_695097
- Special report 3 - Middle East conflict implications (accessible to non-clients): https://www.rystadenergy.com/insights/special-report-3-middle-east-conflict-implications
- China’s resilient power system limits fallout from Middle East war (clients only): https://portal.rystadenergy.com/article-detail/695111?qid=90c04e6a3ccfa3db523c087323a9fbf8&oid=doc_695111
- Chief Economist Desk: Strait of Hormuz, energy supply disruptions and long-term scenarios (accessible to non-clients): https://www.rystadenergy.com/insights/chief-economist-desk-strait-of-hormuz-energy-supply-disruptions-and-long-term-sce
- Indonesia exploration round points to a strategic blend of oil and LNG plays (clients only): https://portal.rystadenergy.com/article-detail/694133?qid=10efd2bb1d19d21a0ce0541c48aa07ad&oid=doc_694133
- The oil market did not underreact. It just had buffers (accessible to non-clients): https://www.rystadenergy.com/insights/oil-market-did-not-underreact-it-just-had-buffers
- Asian refiners face a rare crossroads of high margins, tight supply (clients only): https://portal.rystadenergy.com/article-detail/695089?qid=90c04e6a3ccfa3db523c087323a9fbf8&oid=doc_695089
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Related Episodes
- Middle East escalation and the scramble for LNG, with Sindre Knutsson: https://www.rystadenergy.com/podcasts/middle-east-escalation-and-scramble-of-lng
- How will Middle East conflict impact energy and the economy? With Claudio Galimberti: https://www.rystadenergy.com/podcasts/how-will-middle-east-conflict-impact-energy-and-the-economy
- Is China’s falling LNG demand a warning sign for global markets? With Wei Xiong: https://www.rystadenergy.com/podcasts/china-domestic-gas-supply-on-the-rise
- Could Middle East conflict break energy supply chains? With Matthew Fitzsimmons: https://www.rystadenergy.com/podcasts/could-middle-east-conflict-break-energy-supply-chains
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🎙️Let’s Talk Energy is a Rystad Energy Production.
Produced by: Laura Rodriguez Skaug & Både Og.
Executive producers: Noah Brenner, Elliot Busby, Evodie Fleury-Greaker & Erik Means.
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