Asian governments are confronting another significant disruption to their energy supplies following a blockade imposed by Yemeni Houthis in the Bab al-Mandab strait at the Red Sea’s southern entrance. Nations including Japan, the Philippines, Thailand, and South Korea, which source up to 90% of their oil imports from the Middle East, are working to secure alternative supplies amid the latest maritime chokepoint closure.
This crisis compounds difficulties that emerged earlier in the year when Iran’s effective closure of the strait of Hormuz forced regional competition for dwindling crude oil reserves. Saudi Arabia had responded to that disruption by redirecting exports through its Red Sea port of Yanbu, which now processes more than 70% of the kingdom’s crude exports. This alternative route has become crucial for major Asian importers including China, India, Japan, and South Korea.
Refiners in Japan and South Korea are exploring alternative shipping routes through the Suez Canal, around Africa, and across the Mediterranean, though such detours entail significant costs and logistical complications. The largest oil tankers cannot traverse the Suez Canal fully loaded, necessitating cargo transfers and pipeline transport through Egypt, while circumnavigating Africa would more than double voyage times. War risk insurance premiums for tankers have reportedly doubled in the preceding week, potentially adding hundreds of thousands of dollars to individual voyages.
The shipping disruptions have prompted policy responses across the region. Multiple governments are maintaining fuel subsidies, while Japan and South Korea have extended tax cuts on fuel to moderate price increases. The Philippines, India, and South Korea are bolstering strategic oil and gas reserves, and several nations have renewed focus on renewable energy transitions. Additionally, Asian importers are reportedly increasing purchases from Russia, with Chinese refiners recently escalating acquisitions of sanctioned Russian crude oil.
Experts characterize the situation as exposing a long-standing vulnerability in Asian energy systems. Analysts suggest that without immediate solutions for supply security, businesses may face closures, consumption constraints during peak demand periods, and in extreme cases, heightened default risks. Observers note that global reserve capacity remains minimal, with little flexibility available to Asian governments navigating the compounded disruptions.
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