Asia-Pacific: Middle East-Linked Fuel Shortages Disrupt Transport, Industry, and Energy Security

• Fuel shortages across APAC will likely persist through mid-2026, driven by continued disruptions to Middle Eastern crude and refined petroleum and related supply chains.

• Import-dependent countries with limited storage or domestic refining capacity face the highest risk of recurring shortages, price volatility, and fuel rationing.  

• Aviation, logistics, and transport-dependent industries are likely to experience intermittent operational constraints, particularly in urban centers and industrial corridors.

• Government intervention, including rationing, demand restrictions, and emergency measures, will increase in the weeks and months ahead.

• Domestic industrial sectors relying on fuel-intensive operations such as fertilizer, ceramics, plastics, and power generation are also likely to face input shortages. 

The Asia-Pacific fuel shortages are indicative of an emerging regional pattern of interconnected supply chain risks related to recent Middle East tensions and are likely to persist over the medium term. The impact of these supply disruptions varies across the region, reflecting differences in import dependence, domestic refining capacity, and storage buffers. 

High Import Dependence and Limited Storage Buffers

Countries with near-total reliance on imported refined fuel and limited storage capacity face the most immediate risk of sustained shortages, rationing, and operational disruption:  

• Bangladesh: Imports nearly 100 percent of its refined fuel and over 70 percent of its crude and product supply from Gulf states; rationing has forced fertilizer plant closures and increased security concerns during tanker transportation.  
• Japan: Imports nearly all of its fossil fuel; authorities have released strategic petroleum reserves and introduced energy-saving measures to stabilize supply.
• Myanmar: Imports over 90 percent of refined fuel (most indirectly related to Middle Eastern supply chains), and refineries operate at reduced efficiency. This, together with rationing measures, has resulted in suspension of most domestic flights.  
• Pakistan: Relies on crude and LNG shipments, with roughly 70-80 percent of oil imports and a majority of LNG supplies coming from Gulf countries via the Strait of Hormuz;  possesses limited domestic buffers, which makes power generation and essential services likely to experience disruption.
• Philippines: Imports over 90 percent of its oil and has limited strategic reserves; the government has declared a national energy emergency, raising the risks of fuel rationing, transport disruption, and broader impacts to power generation and industrial activity.  
• South Korea: Imports over 90 percent of its crude oil and most of its LNG, most related to the Middle Eastern supply routes: the government has implemented conservation measures and drawn on strategic reserves. 

Partial Mitigation Through Domestic Refining Capacity 

Countries with domestic refining capacity are better positioned to absorb short-term supply shocks but remain exposed. In India, where approximately 60-65 percent of crude oil imports originate from the Middle East, diverting LPG from industrial to domestic use is slowing production in key sectors. In Indonesia, domestic refining capacity offsets some supply pressures. However, ongoing reliance on imports covering around 35-40 percent of fuel demand, with a large share related to Middle Eastern crude and LPG, leaves the country exposed to price fluctuations. 

Structural Exposure in Southeast Asian Import Markets 

Southeast Asian markets face compounded vulnerability due to limited domestic refining capacity, reliance on intermediary supply hubs, and exposure to Middle Eastern pricing benchmarks. Thailand, Vietnam, Laos, and Cambodia all depend on imports for 60-100 percent of refined fuel, with a substantial portion sourced from or priced against Middle Eastern benchmarks. These countries are facing limited fuel availability that has prompted rationing, industrial conservation measures, and consumption advisories. 

High Consumption with Import Reliance

Even countries with relatively developed infrastructure face localized disruption. In Australia, dependence on imported refined fuel accounts for roughly 80–90 percent of total fuel consumption, with a significant share sourced from Asian refineries processing Middle Eastern crude. Disruptions in the downstream supply have created local shortages.

The pattern across the region indicates that even countries with domestic refining or reserves may face operational stress as Middle East-related supply disruptions continue. China offers some stability in this context, given its large refining system, diverse import mix, and state-controlled fuel management. Short-term supply inside the country is likely to remain steady. However, tighter global supply is already pushing up input costs, and there are early signs that exports of refined fuel may be managed more carefully to protect domestic needs.

Fuel shortages are beginning to disrupt transport networks across Asia, with effects likely to intensify in the near term. Urban mobility and aviation are already showing signs of strain. These constraints are beginning to cascade through business operations in the Asia-Pacific:

Operational Disruptions Across Fuel-Dependent Industries

Industries that rely on fuel-intensive logistics, including cold-chain distribution, chemicals, and heavy manufacturing, are already adapting their production schedules or reducing operating hours.

• India: Significant production declines reported, with roughly half of factories operating at reduced capacity or shutting down entirely.  
• Japan: Large chemical producers including have begun trimming output of key petrochemical products such as ethylene in response to delayed naphtha feedstock shipments.
• Singapore: Major refineries and petrochemical plants have reduced runs and supply deliveries as feedstock bottlenecks constrain operations.
• South Korea: Chemical producers have declared force majeure and reduced output levels after disruptions to feedstock imports.  

Across Southeast Asia, manufacturing hubs have slashed refinery runs and related fuel-dependent operations as crude imports related to the conflict have fallen sharply, reducing operating rates in fuel-intensive industrial segments and pressuring production schedules.

Corporate Risk Mitigation and Supply Prioritization 

The uncertainty in supply is prompting companies operating in the Asia-Pacific to review inventory buffers, modify fuel procurement plans, and prioritize essential transport over non-essential operations.

• India: Logistics firms are rerouting shipments and holding extra inventory closer to end markets to manage higher fuel costs and disrupted tanker routes.  
• Japan: Industrial buyers are postponing non-critical deliveries and securing fixed-price LPG and naphtha contracts to stabilize operations supply volatility.  
• Philippines: Transport and logistics companies are stockpiling fuel and prioritizing essential goods after the national energy emergency declaration due to conflict-related supply disruptions.  
• Singapore: Refinery and chemical operators are delaying non-urgent shipments and adjusting feedstock procurement to maintain continuity of core production amid feedstock bottlenecks.  
• Vietnam: Airlines and logistics companies are reducing non-essential routes and reallocating jet fuel to maintain essential services. 

Government Intervention and Localization Friction Points

Governments in the region are likely to continue issuing advisories and rationing directives, which could create localized congestion at fuel stations and distribution hubs.

• India: Several states have implemented fuel rationing and staggered petrol station operations, creating congestion at fuel stations.
• Philippines: The government has imposed fuel allocation limits and prioritized essential services, leading to crowded distribution hubs in urban centers.  
• Thailand: Authorities have issued conservation advisories and limited fuel sales for non-essential vehicles, producing localized delays at gas stations.
• Vietnam: Hanoi and Ho Chi Minh City are experiencing temporary rationing at petrol stations as government directives prioritize fuel for transport and logistics companies.

Second-Order Industrial and Food Security Impacts

Domestic industrial sectors relying on fuel-intensive operations such as fertilizer, ceramics, plastics, and power generation are likely to face input shortages that could delay production schedules and increase costs. Reduced fertilizer availability may suppress agricultural yields, increase the risk of regional food supply disruptions, and drive greater reliance on imported food.  

Fuel supply conditions are likely to remain volatile over the medium term. These pressures are expected to manifest unevenly across the region:

Countries such as Cambodia, Laos, and Sri Lanka, with limited refining capacity and low storage buffers, are particularly vulnerable to recurring shortages that could disrupt basic services. Energy-intensive sectors, including power generation, manufacturing, and construction in India, Indonesia, and Thailand, are likely to experience intermittent delays due to constrained fuel availability, slowing project timelines, and industrial output. Governments may expand fuel rationing for industry, redirect supply toward domestic use, or introduce temporary export limits to maintain essential services, increasing policy uncertainty for businesses operating across borders. Collectively, these measures are likely to slow construction timelines, reduce industrial output, and raise operating costs, particularly for businesses reliant on imported energy inputs. 

International Businesses

In the weeks ahead, international businesses should plan for sustained disruption across fuel-dependent operations in the region, with uneven impacts across APAC markets. Firms with exposure to manufacturing, logistics, or retail distribution should reassess where fuel access is a constraint within their supply chains.

Companies may need to pre-position inventory closer to their end markets, even at a higher holding cost, to reduce reliance on long-distance transport. Procurement teams should consider diversifying fuel suppliers and transport modes, including shifting portions of freight from road to rail or coastal shipping.

Businesses operating in multiple APAC markets should prepare for uneven conditions between countries, requiring flexible allocation of production and distribution. Firms may also need to review contractual terms with suppliers and clients to account for delays tied to fuel availability, as well as reassess insurance coverage where disruptions affect delivery timelines. In urban areas, reduced public transport and fuel rationing may affect workforce availability, requiring adjustments to shift patterns, remote work policies, or company-sponsored transport solutions.

International Travelers

International travelers should prepare for practical disruptions that extend beyond flight availability. Meanwhile, reduced fuel access is likely to affect ground transport reliability, with longer wait times and limited coverage in some areas. Travelers may need to allow additional time for airport transfers, confirm transport arrangements in advance, and identify backup options.

In-country travel plans, especially those involving domestic flights or long-distance road travel, may face short-notice changes or cancellations. Access to services, such as hotel transfers and delivery-based amenities, may also be affected where operators depend on constrained fuel supplies.

In some locations, rationing systems or conservation measures may alter business hours, limit service availability, or reduce operating days for public institutions and private businesses. Travelers should monitor local advisories, maintain flexible itineraries, and ensure access to real-time updates. 

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