The US-Israel War on Iran, while viewed as a regional crisis, it is not just confined to the Middle East. The web of interconnection between the Middle East and the rest of the world has created a spiral of implications beyond geographical boundaries. Although a two-week ceasefire (8-22 April, 2026) has been put in place, there was no promising resolution resulting from the Islamabad talks on 11 April 2026. While a second peace talk has been scheduled between Iran and the US, the event did not take place due to a last-minute cancellation by the US delegation. Prospects of success for the scheduled second round of negotiations in Islamabad were low from the beginning as Tehran feels Washington’s demands are excessive and unrealistic. The collapse of the second talk is due to the refusal of Tehran to accept a ‘zero enrichment’ nuclear programme and Washington’s refusal to end the naval blockade of Iranian ports.
Since the beginning of the war, the Strait of Hormuz has been effectively closed (by Iran) to most commercial traffic, severely compromising the freedom of navigation for both merchant and military vessels. Having asserted control over the waterway, Iran has implemented a selective transit regime, imposing conditions and hefty tolls on specific vessels to pass.
The Strait of Hormuz contributes around a quarter of global seaborne oil trade affecting 20% of world oil and 19% of liquefied natural gas supplies. The Strait is also a channel to supply a considerable amount of other critical energy sources like refined oil products, chemicals, containers and fertilizers.
The blockade of the Strait has immediately forced the world economy into a sudden shock. Within days, oil prices have spiked tremendously and in countries where the oil stockpile is low, governments have declared an energy emergency. Considering the fact that GCC countries import 70% of their food, the Hormuz closure has increased food prices with some goods spiking up to 120%. The shock would not only impact those in the region but further exacerbates issues for countries who are already struggling with food security. The World Bank forecasts that more than 67 million people are facing hunger in East and Southern Africa, and 52.9 million will be severely affected by food security in the West and Central Africa.
The International Energy Agency (IEA) attributes the ‘largest disruption to the global oil market in history’ to the War and Hormuz blockade.
Recognising that long term implications will arise as a result of the Hormuz blockade, ASEAN is reviewing its regional protection mechanism. During the Second Special ASEAN Foreign Ministers’ Meeting on the Situation in the Middle East, ASEAN has agreed to mobilise and to strengthen the ASEAN Framework Agreement on Petroleum Security (APSA), the ASEAN Power Grid (APG) and the Trans ASEAN Gas Pipeline (TAGP) (para. 9).
The APSA is designed to enhance energy security through coordinated responses, but its enforcement is weak and heavily dependent on voluntary cooperation rather than binding legal mechanisms (p. 78). It was first drafted in 1986, revised in 2009 and renewed in 2025 during the 43rd ASEAN Ministers of Energy Meeting (AMEM) in Kuala Lumpur. Throughout these decades, coordination has largely focused on emergency response measures which include collecting data and analysis in order to form a basis for activation.
The agreement remains a guiding framework which has not been fully implemented. The agreement works on an “endeavour” basis, where member states are encouraged to meet the targets, rather than been legally expected to do so. As a result, since its inception in 1986 till current day, oil stockpiling remains low and insufficient for Southeast Asian nations. In his intervention during the Asia Zero Emission Community (AZEC) Plus Online Summit in Manila, President Marcos Jr of the Philippines (as the Chair of ASEAN) made a remark that whatever measures ASEAN is currently taking, these are ‘not sufficient on their own.’ For instance, Thailand and the Philippines are said to have reserves for at least 60 days, while Indonesia and Vietnam would have 20 and 15 days’ reserves accordingly. Consecutively, industries cannot function as per normal which will potentially cause factories to shut down, collapse of supply chain and rocketing inflation.
In the case that APSA is implemented correctly, it will be able to enhance both member states and collective petroleum security in ASEAN.
The ASEAN Power Grid (APG) is a regional initiative aiming to connect all SEA nations via an electricity power grid. The initiative is the result of realising that oil and natural gas supply is likely to become more volatile in the years to come. It is suggested that by 2045, ASEAN’s import dependency on natural gas could reach 93% and would cause annual bills of USD200 billion as a consumption price. This would make SEA vulnerable in the matter of purchasing and consuming natural gas. Seeing how Russian-Ukraine war led the world into its global energy crisis has taught ASEAN the need to future-proof as such energy volatility is not a one-off circumstance.
The solution is not from outside. Instead, ASEAN could leverage its position by integrating its energy generating resources. Vietnam could utilise offshore winds while Indonesia could utilise its geothermal to generate resources which can be distributed to other southeast Asian countries.
The Trans-ASEAN Gas Pipeline (TAGP) on the other hand, is a plan to build a regional network, connecting regional natural gas suppliers such as Indonesia, Malaysia, Myanmar and the Philippines. As early as 2000, the TAGP Masterplan was developed to construct 4,500 kilometres of pipelines, mainly undersea to connect the supplier states with the rest of ASEAN member countries. As of 2025, the region is already becoming a major consumer of natural gas, and transitioning into becoming a net natural gas importer by 2027. By then, the region will become impacted by global price fluctuations, as its supplying states (Indonesia, Malaysia, Myanmar and the Philippines) will be unable to accommodate the rising demands of the region. By having TAGP, it will enable gas to be distributed across the region, to cushion the impact of a member state when it reaches energy crisis.
In 2022, as a result of the Russian-Ukraine war, ASEAN nations were also affected by the global energy crisis. During that time, gas prices had increased by nearly 60%, resulting in higher consumption charges by the businesses and households based in the region.
In the long run, the TAGP will support demand by integrating sources within the region with most of the SEA nations. The regional gas market will be diversified, ensuring that other SEA nations have access to regional gas, reducing dependency from the global market. This solution/initiative will come hand in hand with ASEAN in the future in which consumption will increase in tandem with its population increase.
Strategically, the Hormuz crisis will have to be viewed as a window of opportunity for ASEAN member countries to accelerate the implementation of APSA, APG and TAGP. Particularly in APSA, member states will have to commit legally to maintaining a minimum oil reserve to cushion future shocks. Although the implementation remains a stumbling block, the 43rd AMEM meeting “welcomed the completion of the signing of APSA and underscored the importance of its early entry into force and operational readiness, including through the expeditious completion of domestic ratification processes, and enhanced preparatory coordination for its effective implementation” (para 9).
Historically, some ASEAN crises manoeuvring lessons can be applied in navigating the current situation. Notably, the response to the 1997 Asian Financial Crisis. The crisis had exposed structural flaws in the Southeast Asia regional architecture – in finance, along with a great reliance on the International Monetary Fund (IMF). The crisis taught the region that IMF’s ‘one-size-fits-all’ austerity measures put member countries into a difficult situation in managing the crisis. The crisis led ASEAN to catalyse the ASEAN Plus Three (APT) initiative, bringing together 3 big economies in Northeast Asia in an informal summit attended by all ASEAN members and leaders from China, Japan and South Korea. One of the most significant outcomes from APT is the Chiang Mai Initiative (CMI), established in 2000 to allow members to swap their local currencies for US Dollars during liquidity crunches.
The APT and CMI built a ground framework for ASEAN to weather regional crisis. Later in 2008, when the region was hit with another crisis i.e. the Global Financial Crisis, there was already a coordinated and effective response as ASEAN was more prepared when APT serves as a self-help mechanism. While the 1997 crisis was an internal collapse of regional financial architecture, the following 2008 crisis was an external shock among others contributed by the US housing market bubble and the collapse of US major financial institutions like the Lehman Brothers.
The creation of APT and CMI demonstrates ASEAN’s regional construct in navigating crises and geopolitical challenges. It goes in parallel with the creation of APSA, APG and TAGP which focuses on building regional integration when reducing dependency from external assistance. Southeast Asian nations can collectively weather challenges when regional partnerships are formed with cohesion, inclusivity and geographic proximity at the core.
In conclusion, the US-Israel War on Iran and the Hormuz blockade demands serious corrective actions from ASEAN. History has shown that ASEAN is at its most innovative when pushed to the brink, such as in 1997 with the creation of ASEAN Plus Three. The current crisis, serving as an energy shock, will be able to provide political momentum for the bloc to transition from “voluntary cooperation” to “institutional operation.”
To truly secure its future, ASEAN must move beyond the “endeavour” basis of APSA and establish legally binding mandates for national oil reserves. By accelerating the integration of the APG and TAGP, the region can disengage itself from huge external dependencies. This crisis is not merely a threat to be managed, but a strategic window for ASEAN to reinforce its centrality and to transform the bloc into a self-sustaining, resilient energy block capable of weathering any external shock.
