On March 18, 2026, the Philippines declared a national energy emergency. Four days later, Australia followed. On March 22, Japan released strategic petroleum reserves for the first time since 2022. Within two weeks of the Iran war escalating, three major Asia-Pacific nations had declared official energy crises.
Combined, these three countries have a population of over 250 million people and economies totalling nearly $10 trillion. Here is why the Iran war hit Asia so fast — and what it means for the region.
Why Asia Is the Most Exposed Region
Europe diversified its energy supply after Ukraine. The US is a net oil exporter. But Asia-Pacific — particularly East and Southeast Asia — never had that luxury. Japan has virtually zero domestic energy production. The Philippines imports nearly all its oil. Australia exports oil and gas but its domestic refining capacity is limited.
When Hormuz comes under threat, the shipping lanes that feed Asia are directly at risk. Gulf oil to Asia travels through the Arabian Sea, past India, through the Malacca Strait, and into the Pacific. Every barrel of Saudi, Iraqi, or Kuwaiti oil headed to Tokyo, Manila, or Sydney passes near the conflict zone.
Japan's Response
Japan moved fastest and most aggressively. The government released 15 million barrels from its strategic petroleum reserve — equivalent to about 6 days of consumption — to signal market stability. It also fast-tracked LNG import agreements with the US, Australia, and Qatar to reduce Gulf dependence. Emergency energy-saving measures were imposed on industrial users.
The Philippines' Crisis
For the Philippines, the crisis hit harder. Unlike Japan, which has $1.2 trillion in reserves and can absorb expensive oil for months, the Philippines runs on a tight fiscal budget. Petrol prices increased 22% within two weeks of the war starting. Power outages became more frequent as oil-fired power plants faced supply uncertainty. The peso weakened sharply against the dollar.
What to Watch
The Asia-Pacific regional score on the WTM currently sits at 70 — High Tension. If Hormuz is actually disrupted, that score moves to 85+ immediately. Watch Japan's weekly SPR release announcements and the Philippines peso exchange rate as leading indicators of whether the region is absorbing the shock or being overwhelmed by it.