Hanoi, Vietnam (AP) — Asia's reliance on Middle East oil and gas, coupled with a sluggish transition to clean energy, exposes the region to potential upheavals in the Strait of Hormuz, especially amid the conflict between Israel and Iran.
The strait, strategically positioned by Iran, manages around 20% of the globe's oil and liquefied natural gas shipments. Notably, China, India, Japan, and South Korea are responsible for a substantial 75% of these imports.
According to analysis by Zero Carbon Analytics, Japan and South Korea face the highest risks, with India and China following closely. All four nations have been sluggish in expanding their renewable energy capacities.
Renewable sources constituted just 9% of South Korea’s power output in 2023, which pales compared to the 33% OECD average. Additionally, that same year, Japan leaned more on fossil fuels than any G7 country.
The Israel-Iran conflict has reached a temporary ceasefire, curtailing potential immediate disruptions. Experts, however, warn that only by reducing reliance on imported fossil fuels and expediting the shift to domestic clean energy can Asia mitigate future uncertainties.
“Countries must remain vigilant to these very real risks, considering them crucial to their energy and economic security,” remarked Murray Worthy from Zero Carbon Analytics.
While China and India are the largest importers of oil and LNG from the Strait of Hormuz, Japan and South Korea remain the most vulnerable.
Statistics from the global energy think tank Ember highlight that Japan imports 87% of its energy needs, and South Korea imports 81%. This contrasts starkly with China’s 20% and India’s 35%.
“Japan's vulnerability becomes starkly evident when considering its heavy reliance on energy passing through the strait,” Worthy pointed out.
Sam Reynolds of the Institute for Energy Economics and Financial Analysis noted the strategic focus by Japan and South Korea on diversifying fossil fuel sources over transitioning to clean energy.
Japan anticipates sourcing 30-40% of its energy from fossil fuels by 2040, involving new LNG infrastructure projects. Meanwhile, South Korea plans substantial reductions in its LNG electricity mix by 2038.
To achieve their net-zero carbon emissions objectives by 2050, both countries will need massive efforts to boost solar and wind power, requiring about 9 gigawatts of solar power annually through 2030, says Agora Energiewende. Japan will also need an additional 5 gigawatts of wind capacity per year, and South Korea about 6 gigawatts.
Japan’s inconsistent energy policies pose challenges: it still subsidizes fossil fuels, seeks increased LNG imports, and supports global oil and gas initiatives, but regulatory hurdles impede offshore wind projects.
Tim Daiss from APAC Energy Consultancy criticizes Japan for inadequate climate actions, citing its increased emphasis on hydrogen fuel derived from natural gas.
In South Korea, low electricity rates deter solar and wind project investments, limiting renewable transitions, explained Kwanghee Yeom of Agora Energiewende. Adjustments in pricing and policy reforms could accelerate clean energy adoption.
In contrast, China and India have taken strides to insulate themselves from global energy market fluctuations.
China led global statistics in wind and solar growth in 2024, with substantial capacity increases, whilst elevating domestic gas production despite reduced reserves.
Although China's LNG imports have decreased thanks to domestic production, it remains the largest oil importer globally, heavily sourcing from the Middle East, Russia, and Malaysia.
India, heavily reliant on coal, plans a 42% surge in coal output by 2030. However, its renewables sector is rapidly expanding, with 30 additional gigawatts activated last year, meeting energy needs for nearly 18 million homes.
While diversifying suppliers, including imports from the US, Russia, and Middle Eastern countries, reduces India’s risks, the nation requires a substantial renewable push for true energy security, noted Vibhuti Garg of the Institute for Energy Economics and Financial Analysis.
A blockade of the Strait of Hormuz could have wide-ranging impacts on other Asian nations. Boosting renewable power generation is essential to safeguarding against the volatility of oil and gas imports, advised Reynolds of the Institute.
Southeast Asia, now a net oil importer due to growing demands in Malaysia and Indonesia, faces future challenges as dwindling supplies could turn it into a net LNG importer by 2032, forecasts consultant Wood Mackenzie.
Renewable expansion lags behind increasing demand, and aging oil and gas fields struggle to keep up, posing potential risks.
The International Energy Agency warns that without enhanced clean energy policies, ASEAN’s oil import expenses could soar from USD 130 billion in 2024 to over USD 200 billion by 2050.
“Clean energy is not just crucial for combating climate change — it’s imperative for national energy security,” concluded Reynolds. (AP) RD RD
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