Energy security moved to the forefront of regional policy discussions as ministers and industry leaders gathered in Tokyo for the inaugural two-day Indo-Pacific Energy Security Ministerial and Business Forum, where governments warned that rising geopolitical tensions are exposing Asia’s vulnerability to global fuel disruptions.

The forum, co-hosted by Japan and the United States, comes at a time when energy markets are being shaken by the widening conflict in the Middle East and heightened tensions around the Strait of Hormuz, one of the world’s most critical oil transit routes.

Tan See Leng, Singapore’s minister-in-charge of energy and science and technology, said the conflict has already begun affecting energy prices, trade and investment flows across Asia, a region that imports the bulk of its fuel. “Asia is particularly exposed as we have to import almost all of our energy,” Tan said during remarks at the forum.

According to CGS International Singapore-based analyst Billy Toh Kian Hin, the widening Iran conflict and disruption around the Strait of Hormuz have quickly become the dominant macro driver for global markets.

Risk-off reaction

In a March 16 note ( “Trading Lens” ), Toh says the oil price surge has triggered a classic risk-off reaction across asset classes as investors reassess inflation risks.

Toh warns that sustained disruption to Gulf oil flows could reinforce inflation and delay potential interest-rate cuts by the US Federal Reserve. Over time, however, prolonged high oil prices could also weaken global growth by eroding consumer spending and corporate margins.

For now, he notes, markets remain relatively resilient because investors largely expect the supply disruption to prove temporary.

Analysts at Wood Mackenzie, meanwhile, warn that the escalating tensions could pose a significant threat to Asia’s energy supply chains, particularly for liquefied natural gas ( LNG ).

The consultancy notes that much of the LNG moving through the Strait of Hormuz originates from Qatar, one of the world’s largest exporters, with Asian buyers accounting for the majority of the demand.

Resilient energy systems

Any prolonged disruption to shipping routes could sharply tighten LNG availability across South and Southeast Asia, where countries such as India, Pakistan and Bangladesh are particularly exposed given their reliance on imported LNG for power generation and industrial demand.

Supply interruptions could drive significant volatility in global gas prices as buyers scramble to secure alternative cargoes, the firm adds.

Spot markets would likely tighten first, potentially pushing Asian LNG benchmark prices higher.

While energy markets have so far absorbed the initial geopolitical shock, Wood Mackenzie cautions that sustained disruption in the Gulf could amplify price volatility and reinforce concerns about energy security across Asia’s import-dependent economies.

Cooperation framework

On the sidelines of the Tokyo forum, Singapore and Japan signed an Energy, Sustainability and Climate Change Cooperation Framework, aimed at expanding collaboration in areas including LNG supply chains, cross-border electricity trading, hydrogen and ammonia fuels, carbon capture technologies, and civil nuclear energy.

Officials say the partnership will encourage policy coordination, investment, and financial cooperation between industry players and financial institutions as both countries pursue net-zero goals while strengthening the reliability of regional energy supply.

For Asia’s import-dependent economies, the current crisis underscores a growing strategic imperative, namely securing more diversified and resilient energy systems in an increasingly uncertain geopolitical environment.