A solar power plant in Indonesia. Asia’s current turn towards coal is not a long-term energy security solution. Instead, countries across the region should accelerate investment in renewables, grid resilience, storage, and diversified energy systems to reduce exposure to future fossil fuel shocks. (Shutterstock/Novrizal Herdananto)

Coal is Not the Future of Asia’s Energy Security

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Most Asian countries’ dependence on fossil fuel imports is unsustainable, and the government will be forced to pay a steep price for energy to preserve energy security.

The Iran War has temporarily halted oil and gas supplies through the Strait of Hormuz, inevitably creating a price crisis for energy fuels tied to key economic sectors. Key Asian economies are dependent on Middle Eastern gas supply for their power generation mix. Following the crisis, the price of gas spiked to almost double in the weeks following the start of the war. For other countries that are not dependent on Middle East gas supply, there is potential exposure to fluctuations in energy prices in the international fossil fuel market, which will affect the domestic cost of energy use in the electricity, transportation, and petrochemical sectors. 

For many Asian economies, this vulnerability is structural. Oil, gas, petrochemicals, fertilizer feedstocks, and shipping routes linked to the Middle East remain deeply embedded in the region’s economic system. When flows through the Strait of Hormuz are severely disrupted or restricted, the impact does not stop at the energy sector. It spills over into electricity tariffs, transport fuels, Liquefied Petroleum Gas (LPG) for cooking, aviation fuel, fertilizers, food prices, logistics costs, and industrial competitiveness.

This is particularly challenging for developing economies. Countries with limited fiscal space cannot absorb higher fuel prices indefinitely through subsidies, import-duty relief, or emergency procurement. Such measures may protect consumers in the short term, but they quickly become fiscal liabilities. Governments are then forced into difficult trade-offs: protecting households, maintaining industrial output, preserving macroeconomic stability, and keeping the energy transition on track.

This is why the current crisis should not be treated as a temporary disruption to be addressed only after it ends. It should trigger an immediate and long-term redesign of Asia’s energy-security architecture.

The Iran War began as a price shock, but quickly evolved into a systemic supply-chain........

© The National Interest