Can Asian Governments Weather the Fuel Shock?

Why It Matters

Asia’s heavy reliance on oil and gas leaves its economies vulnerable to geopolitical shocks, risking fiscal strain, social unrest and supply instability; without bolder diversification and regional cooperation, the economic and political fallout could deepen.

Summary

Rising global oil prices and disruptions to supplies via the Strait of Hormuz have triggered a wave of fuel-price protests across Asia and are straining governments’ finances and energy systems. Several countries face sharply higher diesel and petrol costs, power outages, and only weeks of fuel buffers; some—like Laos—have seen diesel more than double. Governments are responding with consumption curbs, subsidies, price controls and diversification—boosting oil imports from alternative suppliers, expanding biofuel blends and importing solar panels—but large-scale interventions risk becoming fiscally unsustainable. Regional cooperation proposals such as shared strategic stocks and interconnected power grids are being discussed but have seen limited progress to date.

Original Description

Protests have erupted across Asia over the rising cost of fuel. Negotiations to end the war are ongoing but if the Strait of Hormuz doesn't open soon, Asian governments could be in trouble.