Asian nations facing severe energy shortages due to disruptions in the Strait of Hormuz are increasingly looking toward Russian crude oil imports. The conflict involving the U.S. and Israel against Iran has significantly choked off approximately one-fifth of the world’s oil supply, much of which was destined for Asia.

Shifting Energy Alliances Under Geopolitical Strain

Southeast Asia Scrambles for Alternatives

The disruption has sent energy-hungry nations in Southeast Asia into a flurry to secure alternative supplies. Countries like the Philippines, Indonesia, Thailand, and Vietnam have signaled renewed interest in purchasing Russian crude oil this month.

Manila, a long-standing U.S. ally, imported Russian crude for the first time in five years shortly after declaring an energy emergency. Kairos Dela Cruz of the Institute for Climate and Sustainable Cities noted that the scale of this energy emergency declaration is unprecedented.

Before the recent conflict, the Philippines sourced nearly 97% of its seaborne oil imports from the Middle East, according to Kpler data. To mitigate immediate shortfalls, the nation imported crude oil, a first since 2021, while airlines consider fuel rationing.

Indonesia and Vietnam Explore Options

Vietnam has been exploring agreements regarding oil and gas cooperation, alongside nuclear energy, as rising diesel prices impact its manufacturing sector. In Indonesia, officials have stated that “all countries are possible” partners for shoring up reserves, explicitly naming Russia and Brunei.

Putra Adhiguna of the Jakarta-based Energy Shift Institute commented, “When you don’t have any other options, all options are on the table.” Thailand, while observing the situation, appears less desperate than the Philippines, according to Jitsai Santaputra of The Lantau Group, suggesting they may wait if the impact remains limited.

In Thailand, fuel prices rose sharply on March 26 after subsidies were lifted, with diesel increasing by roughly 18%, impacting industry and transportation costs.

The Limits of Russian Supply

Moscow Cannot Fully Offset the Deficit

Experts caution that there is a ceiling on how much crude oil Moscow can increase its exports to meet this new demand. Muyu Xu, a senior crude oil analyst at Kpler, suggested that the opportunity for Asian buyers is both short-lived and shrinking.

Russia is already exporting near its previous peak levels. In March, Russian flows reached about 3.8 million barrels per day, up from February’s 3.2 million, but still below the mid-2023 peak of 3.9 million.

Xu emphasized that geopolitical shifts driven by a few decision-makers make long-term planning difficult, stating that the current priority is simply to “ensure your supply and all the other considerations are secondary.”

Competition for Existing Shipments

Southeast Asian nations are now competing with established buyers, China and India, for approximately 126 million barrels of crude currently at sea, as noted by Kpler. Safer, alternative sources like the U.S., South America, or West Africa are too distant, meaning shipments would take months to arrive.

China, which sourced about 13% of its seaborne crude from Iran and roughly 20% from Russia, holds an advantage with ample reserves. Analysts suggest some Russian shipments intended for China might be diverted to more desperate nations.

India’s Position and Stockpiles

India benefited from a temporary U.S. sanctions waiver on Russian crude before other nations. Xu noted that India “snapped up quite many cargoes” early on, meaning by the time others could buy, most available shipments were already ordered by China and India.

Despite this advantage, India’s Russian imports (jumping to 1.9 million barrels per day in March from 1 million previously) may not fully cover the loss of Middle Eastern supplies (around 2.6 million barrels per day before the war). Duttatreya Das of Ember noted that short-term buys only cover a few days, and peak summer demand is approaching.

China’s large onshore crude inventories, estimated by Kpler at nearly four months of its seaborne imports, provide a significant buffer against short-term war impacts.

Russia Benefits from Global Instability

Sam Reynolds of the Institute for Energy Economics and Financial Analysis stated that Russia emerges as a major winner from the conflict. The combination of energy crisis, speed of delivery, and temporarily lower prices gives Asia a much stronger incentive to import Russian oil.

Reynolds concluded that while moral arguments exist, the current situation reflects nations prioritizing their essential energy security above all else.